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Debra's Natural Gourmet proves that even in the face of big-box competition, a
tiny player can become both a beloved local business and a profitable growth
company.
Five Best Hometown Businesses
Business: Debra's Natural Gourmet
Place: Concord, Mass., population 16,000
CEO: Debra Stark, 53
Keys to success: Open-book management, profit sharing, employee education, and
a fanatical devotion to community outreach
Maybe it's the homemade granola that draws them in. Or maybe it's the lure of a
free total-body rejuvenation. Then again, it might just be that the staff
treats its customers like friends. Whatever its appeal, Debra's Natural Gourmet
proves that even in the face of big-box competition, a tiny player can become
both a beloved local business and a profitable growth company. Motivated by a
lifelong passion for all things all-natural, founder Debra Stark used $250,000
in capital to open the 2,200-square-foot healthful-food-and-lifestyle shop in
1989. She has since built it into a $2.5-million business.
When she started, Stark's only professional experience was as an office manager
and a legal secretary. She was divorced, raising a teenager, and clueless about
the natural-foods business. "People took bets that I wouldn't survive," she
says.
Twelve years later Stark has clearly beaten the odds. Debra's Natural Gourmet
now generates annual revenues exceeding $1,000 per square foot. That's more
than four times the national industry average, says Thomas May, food editor of
the trade journal Natural Foods Merchandiser. In 1998 another trade magazine,
Health Foods Business, rated Debra's among the country's top 100 natural-foods
stores.
Stark has achieved that stature even though such major players as Whole Foods
Market Inc. have moved in nearby. She might have reacted defensively to the
chains' arrival, mimicking their buying and pricing patterns. Instead, Stark
stayed true to her vision, selling only minimally processed all-natural
products and promoting her business as a community resource. That tack paid off
as the advent of big natural-foods chains turned out to benefit -- not harm --
even tiny players in the $48-billion nutrition industry. The chains' aggressive
marketing promoted a lifestyle to consumers who now search out independent
shops like Stark's. "Everybody is looking for more connection and the personal
touch that someone like Debra can really pull off," says May.
Several times a month, for example, Stark shoves aside the bread shelves to
make space for workshop attendees. She exchanges advice and referrals with 35
health practitioners. She distributes to almost 8,000 customers a monthly
newsletter full of notes on everything from anti-aging nutrients to milk
thistle. And she tacks onto every paycheck updates on natural-foods and
supplements research, which she urges staffers to share with shoppers.
It's a management strategy as simple as her recipe for Luscious Organic
Chocolate Mousse: slather attention on every customer. Stark tells employees
(she calls them "coworkers") to accommodate every customer's special requests.
To ensure that sought-after remedies won't interfere with her customers' other
medicinal regimes, Stark employs a registered nurse. And she's always on the
lookout for bogus product claims.
"Her genuine concern for the well-being of her clientele really comes through,"
says John Hill, a cancer survivor who says he's shopped at Debra's Natural
Gourmet since the day it opened. Her people, he says, "not only know you, they
really care about you."
No question, Stark owes much of her loyal customer following -- and her 11
consecutive years of double-digit revenue growth -- to her 26 employees. And no
wonder, for Stark has assigned every employee a management role. Staffers
benchmark sales against regional and national averages. Others closely monitor
product turnover. For her part, Stark prominently posts daily and monthly sales
reports, highlighting the figures to show big advances or troublesome declines.
And in a radical departure from most retailers, each quarter she distributes
20% of her after-tax profits among everyone -- "divided," she says, "according
to each person's number of hours, salary, and how I see they're interacting
with customers, each other, and me."
Having recently remarried, Stark has begun to hand over many of the day-to-day
responsibilities. Still, she says she's confident that her "coworkers" will
continue to grow the business. Her will, she notes, calls for Debra's to go to
her only child, who is now 26 and studying to become a naturopathic physician.
"If he doesn't want it," she adds, "it will be offered to the staff."