Finding Success in Aisle 5

A mix of on-trend products, smart investment strategies, and stellar customer service has helped the three cousins behind DeCicco & Sons markets build a burgeoning grocery empire



(left to right) Cousins Chris DeCicco, Joe DeCicco, and John DeCicco Jr. operate six stores with more than $100 million in gross revenue.

Photographs by Stefan Radtke

It’s fair to say that the grocery business is in Joe DeCicco’s blood. When he and two cousins opened the first DeCicco & Sons market in Ardsley in 2006, their family already had a long history of running successful markets in the area. Joe’s father and two uncles had started the first DeCicco market in a storefront in the Bronx in 1973, and Uncle Frank  and his children currently run DeCicco Family Markets, with six locations in Westchester and the Hudson Valley. At 31, says Joe, “I’ve been in the business 15 years or more.”

That insider’s knowledge has paid off. DeCicco & Sons—whose owners also include Joe’s cousins John DeCicco Jr. and Chris DeCicco—has opened five stores with more than $100 million in combined revenue in the past 10 years, with most of the growth taking place in the past four. A store in Brewster opened in 2011, followed by outposts in Harrison (2012), Armonk (2013), and Larchmont (2015). Each store has cost roughly $5 to $7 million to open, says John Jr. (DeCicco & Sons also operate a store in Pelham that the family opened in 1984.)

There’s an element of risk to launching new locations, and, according to Joe, they don’t pay off equally. He says there is a 40 percent spread between the highest-volume store (Armonk) and the lowest-volume one (Larchmont), adding: “What we’ve noticed as the contributing success factors are proximity to downtown, quality and density of competitors, and, lastly, the age of the store.” 

As far as expenses go, payroll is the company’s biggest line item, Joe says. The company invests heavily in its team, to make sure it delivers quality customer service. “We depend on hard-working employees—and lots of them,” says Joe. “Our payroll expenses, as a percentage of store sales, are definitely higher than what would be considered industry average, but no complaints; it’s one of our biggest competitive advantages.” 

The secret to DeCicco & Sons’ staying power in Westchester’s highly competitive grocery market, says Joe, is that they had a clear business strategy from the start and stayed true to it. “What’s worked over time is to stick with our model,” he says. “We’re about longevity.”

While the stores offer upscale fare—selling humanely raised skirt steak, homemade gazpacho, and fresh cheeses—they also stock everyday staples, such as Jif peanut butter and Hellman’s Mayonnaise, so customers don’t have to make a second run to the supermarket. “We have a good mix of what an average customer would be eating,” says Joe. “Most customers aren’t eating 100 percent organic but want organic milk and eggs.” 

Careful selection of the sites for the stores has been another piece of the puzzle. “For our type of store, we’re looking for a higher-income area,” says Joe. “We’re not going to go up against a club store or ShopRite.” 

To grow the chain quickly, the owners have funded some of the growth out of cash flow. Another key strategy has been to take out state-government-backed loans. For both the Armonk and Brewster stores, the company received a combination of $1 million each in bank funding and financing from the Empire State Certified Development Corp. For the Brewster store, notes John Jr., they also took advantage of real estate tax incentives from the Putnam County Economic Development Corp., for creating jobs, and received a $500,000 Community Renewal Grant from the Department of Housing and Urban Development. 

Over time, DeCicco & Sons has also turned to financing from a large supplier, Krasdale Foods, headquartered in White Plains. The funding allowed the grocery chain to pay off its orders in installments. “We still do it a little with the Ardsley store,” says Joe. 

The Armonk location is DeCicco & Sons' highest volume-store.

Trendy—to a Degree

Staying up on trends, without going overboard, has helped to pull local foodies into the stores and make money flow into the business. “With social media, food trends change quickly,” says Joe. “People read about [trends] on Facebook or online and ask for them,” which can pose challenges. “In a grocery store, there’s not a lot of room to play with,” he says. “We’re not super-progressive, unless I feel strongly about something.”  

A trend Joe does feel strongly about is gluten-free foods, which he continues to add to the mix at his stores. 

The products that tend to sell best at DeCicco & Sons locations, Joe says, are organic, natural, and specialty items. “What we are known for are the quality-driven departments: produce, meat, seafood, deli, and bakery,” he says. Perishable departments work on higher margins than conventional groceries, he explains, because stores have to compensate for the spoilage factor. And prepared foods and those in the hot-food bars also have higher margins, because they are cooked fresh in the stores every day. 

To gather ideas on what to put on his shelves, Joe often meets with owners and chefs at popular local restaurants, such as The Cookery in Dobbs Ferry, X2O Xaviars on the Hudson in Yonkers, and Captain Lawrence Brewing Co. in Elmsford. “They’re constantly talking with each other, sitting down for a drink with each other and talking about food,” says John Jr. 

One popular addition to the stores has been the beer-and-wine bars in Brewster and Armonk. DeCicco & Sons collaborates with brewers such as Captain Lawrence, Six Point, Peekskill Brewery, Yonkers Brewing Co., Newburgh Brewing Company, Rushing Duck, and Evil Twin to come up with unique brews. It’s not necessarily a top seller, but it makes sense to the owners. “As a stand-alone department, it is not a huge revenue stream,” says Joe. “We make it work because, first and foremost, we are huge beer enthusiasts.” Staffed by beer managers, the bars complement the sales of bottled beers and vice versa, he says. 

While Joe keeps the stores up-to-date on food trends, Chris handles marketing, and John Jr. focuses on innovation.

To remain attractive to customers, DeCicco & Sons renovates the stores every three to five years. “We’re doing little things constantly,” John Jr. adds. “There’s a big expense to that.” Usually, he says, renovations will cost $1 million to 2 million, but he sees keeping the stores current as mandatory. “We feel that in the [geographic locations] we’re in, it’s necessary that we keep our stores well maintained and up-to-date, if not on the cutting edge,” he says. 

One area where DeCicco & Sons has stayed a step ahead is in eco-friendliness. In May, the Larchmont store won the Environmental Protection Agency’s Platinum GreenChill certification, its highest sustainability award for food retailers, because it is equipped with refrigeration systems that use natural refrigerants.  

But, as John Jr. points out, such improvements can be costly. Although DeCicco & Sons has seen rapid growth, the cousins are well aware of the hazards of the grocery business and keep a close eye on the stores’ finances. Joe points to the 2015 bankruptcy of A&P. 

“That’s the ending of a chain that maybe didn’t know what the market was and wasn’t adapting,” says Joe.  

He’s also leery of the route taken by Fairway, which recently filed for bankruptcy protection after being purchased by a private equity firm and going public on Nasdaq. The supermarket had taken on a heavy burden of debt. “When you do that, you’re not doing it with the hope of longevity,” says Joe. “You’re going for the stock market.” 

By continuing to improve the shopping experience at DeCicco & Sons, he and his cousins hope to avoid a similar fate, so they may continue to grow in a healthy way. “We’re young guys,” he says. “We’ll keep doing it until it’s not fun.” •

 

 

 

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