Independent grocer Carlie C's expands as grocery titans duel

adunn@newsobserver.comOctober 12, 2013 

  • Carlie C’s at a glance

    Headquarters: Dunn

    President: Mack McLamb, son of founders Carlie C. McLamb and Joyce McLamb

    Stores: 16

    Employees: 1,100

    Revenue: In excess of $100 million annually

    Famous for: Collard greens, nine-layer chocolate cake and butcher department

If ever there was a David among the Goliaths battling it out in the Triangle’s supermarket chain wars, it is Carlie C’s.

For decades, the independent grocer has been a mainstay in mostly rural areas of the state. But earlier this year, the Dunn-based chain opened a store in Raleigh in a location where industry giant Kroger was unable to turn a profit.

In a hypercompetitive business with the tightest of profit margins, Carlie C’s is in expansion mode.

Mack McLamb, only son of founder Carlie C. McLamb, explains the philosophy behind Carlie C’s in terms not typically used in corporate boardrooms.

“We share a belief that if we’re doing what we’re supposed to be doing and do it well, then God will take care of us,” said McLamb, who is president of the privately held company.

McLamb refers to the grocery business as his calling. He likes to reference the old-fashioned values instilled by his father and mother, who got their start in the grocery business in 1961 when they opened up a country store in Johnston County, so tiny it didn’t have a name.

From those humble beginnings, the company has grown to 16 stores and a processing facility doing in excess of $100 million in revenue a year. Future stores are certain, he said, but only when the right location surfaces.

The Wal-Mart, Publix effect

Carlie C’s push into the Triangle grocery scene comes at a tumultuous time brought about primarily by the looming entrance of Publix, a Florida-based chain planning a major expansion into North Carolina.

The fallout has been swift among the bigger chains, which already have been battered by Wal-Mart, the Triangle’s No. 1 grocer by market share.

In July, Harris Teeter agreed to a buyout by industry giant Kroger, citing competitive pressure from rivals. Combining Kroger’s and Harris Teeter’s market share, the company will be competitive with Wal-Mart in the region.

In August, Lowes Foods, which ranks a distant fifth in the Raleigh market and even lower in the Durham-Chapel Hill area, closed two stores in the Triangle, one each in Raleigh and Cary.

And Food Lion, the area’s No. 2 grocer by market share, has been hammered by a relentless advertising campaign by Wal-Mart.

By comparison, Carlie C’s barely registers in market share reports tallied by Chain Store Guide, capturing less than a 1 percent share in Triangle counties.

‘The right timing’?

Roger Beahm, a marketing professor at Wake Forest University’s School of Business and executive director of the Center for Retail Innovation, called Carlie C’s expansion “an interesting move.”

“I wonder, in the face of such intense competition among the larger players, if it’s the right timing,” Beahm said. “There is a risk of getting lost in the noise of the bigger chains.”

However, Beahm said, the odds against Carlie C’s aren’t insurmountable as long as the chain continues to distinguish itself as the hometown independent grocer. Price is not the only factor in consumers’ choice of store, he said.

“Carlie C’s has not lost its small-town persona,” Beahm said. “It can certainly be successful – even in a land of giants.”

The buy-local movement is another factor paving the way for Carlie C’s success in a more urban market, Beahm said. Carlie C’s is at a clear advantage in offering North Carolina products, reinforcing that “the chain itself is local,” he said.

Family ties

Family runs deep at Carlie C’s.

Carlie C. McLamb changed tires, and Joyce McLamb worked at a mill before catching the entrepreneurial spirit and opening their first grocery store. It was such a small operation – “selling drinks and nabs to farmers” – that Mack McLamb said the place didn’t even have a name.

The couple moved to a slightly larger location that same year and continued to operate as a husband-and-wife team. “My dad ran the meat department, and my mom ran the front,” he said.

Over the decades, the business continued to grow, eventually adding stores in Coats, Erwin, Fayetteville, Lillington, Benson, Goldsboro, Hope Mills and Angier. In the 1980s, the chain became a member of the Independent Grocers Affiliate and began selling IGA products.

In 2011, Carlie C’s opened its first Durham store in a vacant Food Lion spot. In 2012, Carlie C’s opened its first Wake County store in Garner in a store once occupied by a Winn-Dixie. The Raleigh store at 4111 New Bern Ave. followed in February of this year.

At 48, Mack McLamb is the youngest of the McLambs’ three children. Some of his earliest memories are of the grocery store.

“I was straightening bottles at about 4 years old,” he said. “I’ve always worked in the business.” At one point, he recalls making 60 cents an hour. “I remember I made a penny a minute,” he said.

As a kid, he said he didn’t think he would follow in his father’s footsteps. But after studying accounting at N.C. State University, he returned to Dunn and Carlie C’s.

Throughout the years, many of Mack McLamb’s co-workers have been family. His sister served as comptroller of the company until recently when she retired. Several cousins work in the business. His mother managed a store until her early 70s.

Green gold

While Mack McLamb’s father, the original Carlie C., is no longer involved in day-to-day operations, the influence of the elder McLamb, now 76, is still strong.

Mack McLamb tells the story of his father purchasing 10 acres of land when he was a small boy. After all the papers were signed, the farmer returned saying he didn’t realize he would lose his tobacco allotment in the deal.

Though the farmer had no legal recourse, McLamb said, “my daddy gave back half” of the allotment.

“I thought at the time it was weakness. It was only as I got older that I appreciated what he’d done,” he said. “He was trying to do the right thing.”

Family influence goes beyond business philosophy to the very items stocked on store shelves.

The frozen collards sold at Carlie C’s were more than likely grown in fields farmed by Mack McLamb’s son, whose name is also Carlie C. McLamb, though he goes by Zack.

After harvest, the collards are dipped in water, cooked, packaged and frozen at the Dunn plant. They’ve proved to be popular with customers who want the country flavor of the dish without “all the work and fuss and odor,” McLamb said. Employees refer to the collards as “green gold.”

“A woman came all the way here from Greensboro the other night and bought four or five packages,” Raleigh store manager Trent Smith said. “They’re very popular.”

In the bakery, pecan pies, coconut cakes and Carlie C’s Signature Select nine-layer chocolate cakes are baked on site. The nine-layer cake is the recipe of McLamb’s mother, Joyce. “It’s a homemade cake that your grandmother might would make,” he said.

The cake, which weighs 3 pounds, costs $15.99 – worth every penny, according to shopper Dana Draper, 63, a longtime Raleigh resident with Johnston County roots. Similar cakes, she said, sell for three times that price at the farmers market.

“I was excited when I found out they were coming close by,” she said. “I love country food.”

‘Bundles of meat’

Besides the cakes and the collards, Carlie C’s plant makes its own country ham, dry sausage and chitlins, among other products.

Perhaps the biggest draw to Carlie C’s is the meat department. On a recent Wednesday morning at the Raleigh store, customers were lined up at the back waiting for their turn at the butcher counter.

Depending on the size of the store, anywhere from four to 12 butchers are employed per store. They will cut and grind meat to order.

Doneka Reed, 24, of Raleigh, said she shops at Carlie C’s every other week “for the deals, especially the bundles of meat.”

Reed, who shops for her family of four, is referring to the meat specials, which allow you to choose several packages for a set price, such as five big packages for $49.95.

“We can get what we want for a good price,” she said.

Reed said she was a Kroger shopper before the store changed hands but prefers Carlie C’s. “They’re very customer-friendly, and that’s what makes me want to come back.”

Middle-class grocery

McLamb doesn’t disclose sales figures or other financial data on the company, which employs 1,100 people, other than to say the business is profitable. Family members share ownership in a majority of the company. There are 10 minority shareholders – a remnant of a discontinued incentive program for store managers.

McLamb said Carlie C’s business model is different from most chain groceries. “Typically, we operate in a model that doesn’t require the volume that a new ground-up store does.”

“We’re an opportunistic retailer,” McLamb said, meaning he scouts for empty store space that can be reopened quickly and without spending a lot of money.

At the new Raleigh store, for example, Carlie C’s took control of the building on Jan. 17 and reopened under the Carlie C’s banner on Feb. 6. “We didn’t do a whole lot of renovating,” he said.

Beyond some new paint, the store looks much the same as it did as a Kroger. In the parking lot, there’s a mix of green carts stamped with Carlie C’s logo and blue carts, the Kroger name on the handle.

A sign on the cart corral reminding shoppers to use their own bags has a Carlie C’s sticker strategically placed to obscure a Kroger logo.

McLamb said he sees additional cost savings as an IGA member, which allows him to join with other independents to purchase IGA-brand products at a volume discount and join in the alliance’s “hometown proud” marketing campaign. Moreover, the IGA-brand, around since 1926, is familiar to shoppers.

Could we see a Carlie C’s in Cary where Lowes Foods recently shuttered a store?

McLamb wouldn’t rule it out but said the leasing costs may be prohibitive.

McLamb said he likes to keep his pricing consistent at all his stores, meaning the price of a bottle of ketchup or pound of ground beef is the same in Angier as it is in the Raleigh store. “We’re not going to charge more for groceries in Cary,” he said. The chain also doesn’t require a loyalty card to take advantage of weekly sale prices. Coupons are accepted at face value.

As a supermarket industry insider, McLamb has watched closely the news about Publix, Harris Teeter and Lowes Foods. But he doesn’t see it as a game changer for Carlie C’s.

“I don’t want to say we’re unconcerned,” McLamb said. But he said he doesn’t think there is much overlap in customer base. “A good percentage of our customers would not shop at a Harris Teeter,” he said.

“We consider Wal-Mart our No. 1 competitor and Food Lion our No. 2 competitor,” McLamb said. “That’s our customer base as well. We’re pretty much a middle-class grocery provider.”

Not for sale

Wake Forest’s Beahm doesn’t think Carlie C’s should underestimate the lure of high-end competitors, especially as Publix enters the market.

But he agreed that Carlie C’s has an appealing mix of competitive pricing, customer service and the image as the little guy.

Being independent, Beahm said, “is one of those wholesome characteristics.”

“People like to believe, ‘There’s someone who didn’t sell out.’”

McLamb seems comfortable with his company’s position as the small but growing hometown chain. But he knows he can’t be complacent. While embracing the chain’s old-fashioned roots, he knows he’s got to stay relevant to grow.

Carlie C’s began using Twitter in 2012 and joined Facebook in March. Weekly sales circulars are inserted in newspapers and are available on the company website,

McLamb, who would like to open a new store about every 15 to 18 months, is scouting a 17th location.

Would McLamb entertain offers from a corporate suitor? “I would never consider selling for any amount of money,” he said.

It’s too soon to say whether his son, the farmer, or his daughter, a hospitality management major at East Carolina University, will join him in the family business. But this summer, the family welcomed a fourth generation. Carlie C. McLamb IV was born.

Dunn: 919-829-4522; Twitter: @amygdunn

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