In what Operations Manager Bob Starr terms as an effort to "refocus," Gregg and Nikki Peters have decided to close Jones' Food Center in Vermillion.
In its place will be a much larger Jones' Ace Hardware.
"It is a refocusing," Starr said. "The first three years competing against a Wal-Mart, we did very well. In a town the size of Vermillion, to be able to sustain and grow the first three years against a formidable player such as Wal-Mart, and having another big store with Hy-Vee in town is certainly admirable, but the last three years, once the economy turned (downward), it became increasingly difficult."
For a good portion of the time Jones' Food Center was open in Vermillion, its only competitor in town was Hy-Vee. The addition of Wal-Mart to the city in 2006 with its food store gave local people a third option for grocery shopping.
For most of its 17 years in Vermillion, Starr said, Jones' Food Center was able to fill a unique niche, but it was difficult for the grocery store to compete with the larger chain grocery stores in Vermillion during the recession.
"Ultimately, when the economy really turned here about three years ago … we started to lose some of those customers (to Hy-Vee and WalMart)," he said, "even though we believe we have the finest meat in South Dakota, we have a great selection of natural and organic foods – things they don't carry. We would put up our quality against anybody's on any given day.
"But the fact of the matter is, those guys are in business and they are very good at what they do," Starr said, "and it has just become tougher and tougher for a family business to compete against the likes of the Wal-Marts and the Hy-Vees in the world."
Starr said the decision to close the food store did not come easily to Gregg and Nikki.
"When Ace Hardware came to us and approached us with this idea, it was something we looked long and hard at," he said. "It's been over a year now that we've really contemplated it, and it's an offer that we can't refuse and it brings something to Vermillion that is sorely lacking right now. It really is a win-win deal for everybody, as difficult as it is to lose the grocery side of the business."
An inventory reduction sale begins at Jones' Food Center on Wednesday, June 20, and is expected to last three weeks.
"Our goal is to be done, with the doors closed for business on the grocery side by July 10 at the latest," Starr said.
The lot that houses Jones' Food Center has been a place of growth for most of the time that the Peterses' store has occupied the main building in the past 17 years. That building houses a branch of Wells Fargo Bank on its south side. On its north side is Mister Smith's Bakery, Café and Catering, which has grown in popularity over the years thanks, in part, to the bread-baking skills of Larry Smith.
The Peterses added a new wing to the building in 2000 that currently houses Jones' Ace Hardware and Vermillion's municipal liquor store, which the couple manages.
Wells Fargo will remain at its current location, and Mister Smith's also is not going away – it will, in fact, be renovated, and the dining area may be even be expanded.
"One thing that the Targets and the Ikeas of the world has taught us is that you can operate a good, high quality eatery in the middle of a general merchandise store," Starr said. "If you do it right, it can be very successful. We've done a very good job with it, and we can do better job with it."
The space currently occupied by Jones' Ace Hardware will be vacated once the larger hardware store is located in the building space now housing Jones' Foods.
"Mr. Smith's Bakery, Café and Catering will stay open throughout the construction phase; Wells Fargo will be open also," Starr said. "Ace Hardware obviously will be open."
Once the grocery business closes next month, the portion of the building where it is currently housed will be partitioned off from the other existing businesses in that structure.
"That will be so that we can come in and start tearing down walls, ripping up the floors – we are essentially going to gut this building," Starr said. "When you step into this thing once it reopens, you will not have any idea that a grocery store once occupied the space."
It is hoped that the new, improved and larger Jones' Ace Hardware will be open by mid-September or early October.
"It is a very aggressive schedule," Starr said. "Whether or not we are able to hit that – we'll have to see what contractors are available."
Jones' Ace Hardware currently operates a small engine repair shop in a building across the alley from the main store. That shop will become part of the new hardware store.
Jones' had also operated a small greenhouse on the south side of the main building for most of the last 17 years. It has not been in use for the last 18 months.
"We're talking about putting a roof on that and using it year-round," he said. "Then the hardware store will simply slide over here to the grocery store (location), and the spot that currently houses the hardware store will be leased out."
Store management is currently discussing that lease, Starr said, with a couple of interested individuals.
"Nothing is imminent. We cannot make any kind of an announcement at this time, but they are a couple of players that do not currently have a presence in Clay County," he said. "So it works well for the city of Vermillion, also."
Jones' Ace Hardware, once housed in what was the food store, will have more than double the floor space that it has currently.
Starr said management is trying its best to look out for its employees who will be affected by this major change.
"We are making every attempt to place as many of our full-time people as possible," he said. "I can't honestly say that we will be able to find something for everybody, but are certainly going to be making the effort to make sure these people are taken care of. It's a tough deal – you can't make any promises, but these people have been so good to us, and they've come to know the community and we've gotten to know them.
"We know their strengths and we want to find something for them, preferably within our company if at all possible," Starr said, "so we are working to do that as we speak."
Ace Hardware has store locations throughout the United States.
"They have a very large presence in the Midwest," Starr said. "They are based out of Chicago, our warehouse is located in La Crosse, WI, we've been with these folks for 12 years now and they are a fantastic company to work with."
The current Jones' Hardware store in Vermillion has consistently had its limitations.
"I can't tell you how often we have to deal with a customer who walks into the store and is looking for something special … looking for some fitting, some coupling or some other item, and we can't satisfy the customer's need," Starr said. "We don't have the room, we don't have the inventory, and this happens almost daily.
"If we can't satisfy their needs, more than likely nobody else in Vermillion can, either, which forces them to go to Yankton, or Sioux City or Sioux Falls," he said. "Hopefully, that is not going to happen once the new Jones' Ace Hardware opens up."
Starr will continue to oversee the operations of the several retail businesses operated by the Peterses in several southeast South Dakota communities. After the remodeling is complete in Vermillion, Gregg and Nicki will operate hardware stores in Vermillion and Madison, and grocery stores in Elk Point, Parker and Viborg.
"The things that have made us special are the things that the big boys won't do, don't care to do, don't want to do," he said. "We always did them, but unfortunately it has become tougher and tougher to operate in a big box world. We did the best we could, and we're very proud of what we've accomplished, and we're excited for the changes that are ahead."
Someday, there may be a Jones' Food Center in Vermillion once again.
"If the right opportunity were to present itself within a year or so, absolutely. Nikki Peters has already made that comment that if the right opportunity presented itself, they would get another Jones' Food Center open tomorrow," Starr said.