Tough times for C&K Market

By Scott Graves, Pilot staff writer July 27, 2013 01:08 am

The continuing economic downturn and increased competition — mostly in the form of Walmart Supercenters —  has forced C&K Market Inc. in recent months to close several stores and lay off employees at the corporate office.

Still, the Brookings-based company’s situation is not as bad as some people think, said Greg Sandeno, president and CEO.

The company has opened 10 stores in the last few years. In 2012 it purchased three independent stores — in Talent, Drain and Philomath — and rebranded them as Ray’s Food Place or Shop Smart.

“We’re not in a tailspin by any means,” Sandeno said, referring to the recent closure of California grocery stores in Crescent City and Smith River. See related story on Page 2A.

In May, the company laid off 25 corporate employees at its Brookings office and a satellite office in Medford.

“We are doing what I call right-sizing,” Sandeno said. “We are looking at whether the amount of staffing and resources we employ matches our business revenue.”

The family-owned C&K Market was formed in 1967 and today operates 61 grocery stores in Oregon and California. It also operates 15 pharmacies, including 12 Pharmacy Express stores, two Tiffany’s Pharmacy & Gift stores, and Chetco Pharmacy & Gifts in Brookings.

In the first half of this year, the company experienced a dramatic loss of revenue in stores in cities where Walmart has established Supercenters, which sell groceries, Sandeno said.

The Walmart in Crescent City became a Supercenter in November, 2012.

This year’s losses have forced C&K Market to close stores in Roseburg, Medford, Crescent City and Yreka, Calif.

“We have stores that were already struggling and then you throw in a Walmart Supercenter. ...” he said.

C&K Market also faces stiff competition in some areas from stores such as WinCo Foods, Fred Meyer and Safeway, the latter often doing advertising blitzes that C&K Markets can’t financially match, Sandeno said.

With less stores, the company doesn’t need as many corporate employees and, in May, laid off a number of employees, mostly in clerical positions, Sandeno said. 

 The store closures and corporate restructuring allows C&K Market to focus on the stores that are doing well, and to open stores in areas where competition is light, he said.  

“The goal is to keep the company healthy,” Sandeno said.

For example, he said, the Ray’s Food Place in Smith River will be closed for two reasons: The store was an “under-performer” and it couldn’t compete with other stores in Crescent City and Brookings.

“Smith River never made money, but we wanted to take care of the communities here along the coast,” he said. “But with Fred Meyer at one end and a Walmart Supercenter, well, it just couldn’t compete.”

During a meeting with Smith River residents Wednesday, Rocky Campbell, vice president of operations for C&K Market, said the Smith River store had been losing money since 2008, and sales had decreased another 25 percent once the Walmart Supercenter in Crescent City opened. 

Campbell said the store had tried various things to stay open, from wage reductions to trying to reduce shrinkage. However, the store ultimately could not compete against other stores. 

C&K Market owns the property in Smith River and said it would be amenable to either leasing or selling the building to another grocer or to a co-op if the Smith River community could attract another grocery store.