Regional supermarket chain Best Market grew out of a fruit and vegetable stand, but in the next few months it will increase its store count by 50 percent.
Bethpage-based Best Yet Market Inc., a family-owned company operating stores under the banner Best Market, bought nine Waldbaum’s and Pathmark locations on Long Island from the bankrupt Great Atlantic & Pacific Tea Co. for $13 million, along with a tenth location in Manhattan.
“We are expanding mostly on Long Island because it is our home market,” said Best Market co-owner Aviv Raitses, 55, of Huntington. Once all 10 stores open, Best Market’s store count will jump to 30 in New York, Connecticut and New Jersey, with 25 locations on Long Island.
Such rapid expansion can offer companies big opportunities but also comes with big challenges, experts said.
“The benefits to acquisitions like that are they obviously increase their customers, revenues and earnings,” said mergers and acquisitions expert Bruce Newman, president of Protegrity Advisors in Ronkonkama. In Best Market’s case, “it is going to increase their footprint in their market, which makes them more competitive,” he said.
One of the pitfalls companies have to look out for is “any kind of financial strain,” Newman said.
Raitses and his brother, co-owner Eran Raitses, are paying for the expansion through a combination of bank financing and personal reinvestment, company officials said.
The brothers were inspired to start their own grocery store by their father, Ben, who had opened fruit and vegetable stands in Brooklyn. The two opened their first supermarket under the name Produce Warehouse in Ronkonkoma in 1994. They transitioned to the store name Best Yet Market in 2001, when they switched to a supplier that carried the Best Yet line of products.
“When we had the Best Yet name out in front of the store, it modeled the private label,” said Rebecca Philbert, president and chief executive of Best Market. “When our supplier changed the look of the label, the connection wasn’t there anymore. We decided to do a branding study and develop our own brand. And that’s how Best Market came to be about four years ago.”
The transition from Best Yet Market to Best Market required that the stores get new signage and paint. The Coram store has yet to get a new sign. Most locations were also renovated. The company used circulars, in-store signage and employees to inform customers of its new identity.
“It is a good idea to have a micro-campaign to introduce the name of a new company,” said Martin Lewison, an assistant professor of business management at Farmingdale State College.
Even though it is not uncommon for companies to rebrand, it’s best to minimize the frequency of changes, Lewison said.
“A brand-name overhaul takes huge marketing efforts,” he said. “People are confused at first, and then consumers adopt.”
Best Market is set to hold a “soft opening” at 10 a.m. Wednesday at the former Waldbaum’s supermarket at 211 Middle Country Rd. in Selden. A grand opening will take place Friday at noon.
“We are so excited with the opportunity with these new stores, because now we are in areas that we always wanted to get into,” said Best Market vice president Or Raitses, 30, of Roslyn, the son of Aviv.
Aside from the Selden location, Best Market bought the leases of the former Waldbaum’s in Great Neck, Commack, Merrick and Westhampton Beach. It also bought the leases to the Pathmarks in Shirley, Islip, West Babylon and East Rockaway.
Best Market opened the Shirley store on Jan. 15, the Commack store on Jan. 27 and the Great Neck store on Feb. 12. The other stores will have staggered openings that may extend into the summer.
“We have a supervisory group that we call coaches that go around as a group to open stores,” Philbert said. “We don’t want to open up a new store with all new people.”
Best Market stores offer a full selection of grocery items, as well as craft beers and ready-to-go dinners such as sushi, wood-smoked barbecue and fried chicken.
“This place is a small miracle compared to what was here,” Coleman Paul, 79, of Great Neck, told the cashier as he paid for his groceries during the grand opening of the Great Neck store.
Best Market has more than 2,000 employees, and that number will likely increase to more than 2,500 as it hires for its new stores, Philbert said. The nonunion outfit, which has hired some former A&P workers, has been rated on the Great Place to Work list by the same research firm that produces the annual Fortune 100 Best Companies to Work For list. It offers employees health benefits, a match for 401(k)s, and discounted lunch and groceries.
“We take pride in what we do,” said Eran Raitses, 49, of Harlem. “For us, the most important thing is how our team members feel. The number of stores are not as important.”
AT A GLANCE
Company: Best Yet Market Inc., Bethpage
CEO: Rebecca Philbert
Co-Owners: Aviv and Eran Raitses
Employees: More than 2,000