Recognizable from his grocery chain’s television ads and known for his aw-shucks manner, Overwaitea Food Group (OFG) president Darrell Jones is more than just an affable guy with small-town charm.
An hour-long chat with the head of B.C.’s largest grocery store chain about his company’s challenges and opportunities reveals that he is quick with numbers and has a sharp mind for strategy.
Jones, 57, also has an exhaustive knowledge of the company from bottom to top, gleaned from 40 years of working for OFG – an involvement that started when he was hired to bag groceries in Cranbrook while in Grade 11.
Jones’ task today is overseeing the largest expansion in his 16,000-employee company’s 101-year history. Jones aims to raise OFG’s store count to 200 stores by the year 2020, from 151 today, with the lion’s share of the outlets being branded Save-On-Foods.
At the same time, Jones is overseeing the phasing out of the Overwaitea name, which all of the OFG stores carried in 1968, when B.C. billionaire and current owner Jim Pattison bought the chain. Pattison created the Save-On-Foods brand in 1982 and made that grocery store banner a subsidiary of OFG.
Trust for the Save-On-Foods brand increased through the decades and, last year, an Ipsos Reid poll found that Save-On-Foods was the most trusted brand in B.C.
“That’s a pretty good reason to stick with that brand,” Jones said.
The company has been consolidating that brand lately. OFG eliminated its Coopers Foods brand and converted those stores to Save-On-Foods stores.
Next year, Jones plans to rebrand OFG’s 10 remaining Overwaitea stores as Save-On-Foods.
The winnowing of brands comes as he opens the company’s first stores in Saskatchewan and Manitoba, where the first three Winnipeg OFG stores are set to open in November.
“Save-On-Foods is now the vast majority of our business with probably 85% of sales if it was a pie chart,” he told Business in Vancouver.
OFG’s four-store Urban Fare brand might also expand slightly as could the company’s relatively new two-store PriceSmart foods banner, which is aimed largely at Asian shoppers.
The only other banner that Jones oversees – the single-store, Smithers-based Bulkley Valley Wholesale – is likely to continue operating as is.
Sales have grown by more than 10% in each of the past four years with same-store sales up an impressive “5.5% to 6%,” according to Jones.
That success, however, does not mean that the company has not faced struggles.
Most stores are in B.C. but about a quarter of its business is in Alberta, where the economy has been hard hit. New low-cost rivals are heavily discounting products, squeezing margins.
But if the company is worried about the competition, it isn’t showing any fear in its expansion plans.
“We built a brand-new warehouse last year in Edmonton that is half a million square feet and that was a key step for us to grow the business,” Jones said.
“Now we have the capacity to do Saskatchewan and Manitoba. The next step would be to open a warehouse further east, in the future, but for now we have the warehousing in place to get to the 200 stores.”
(Image: Darrell Jones has worked at 20 different stores throughout his career | Chung Chow)
Jones remains optimistic because he believes his company has strengths beyond just pricing. To him, value includes store ambiance and freshness as well as offerings such as online ordering and community participation. Increasing the number of stores with wine sections is another way of adding value, said.
“He is somebody who really cares about the community,” said Teri Nicholas, president of the BC Children’s Hospital Foundation, which is a charity that OFG supports and whose board of directors Jones recently joined.
“He always says, ‘We just want to do this for the kids.’ People can do [charitable work] for business recognition but I think, first and foremost, Darrell does it because it’s the right thing to do.”
Jones worked at about 20 different stores as a clerk, senior clerk, grocery manager, assistant store manager or store manager. In each of those stores, he strove to support local causes.
Others who know him see other strengths.
“He’s strategic and looks at long-term goals versus short-term solutions,” said Denis Gendron, president of United Grocers Inc. (UGI), for which Jones serves as a director.
“He has this view of what’s next,” Gendron said.
“We’re living in a very competitive environment where gross margins for retailers are thin. You have to make sure that you’re not just taking actions without evaluating risk. Darrell understands the risks and is quick to look at the upsides of situations.”
That positive attitude has served him well as a company man. When superiors asked him to take a job in Quesnel in 1990, he uprooted his young family, which included his wife, who took a leave of absence as a teacher, and two children aged three and four.
That stint lasted little more than a year before he moved back to Metro Vancouver, bringing with him a better understanding of how stores operate in smaller communities.
He already had knowledge of Cranbrook, where he grew up and graduated in 1978 from high school before moving to Metro Vancouver.
His original plan was to go to the University of British Columbia and become a teacher but he did the math and realized that working at a unionized Overwaitea store in Port Coquitlam paid him a bigger salary than he would earn as a teacher after he graduated.
“I wouldn’t have stayed with it if I didn’t really like it,” Jones said. “There’s something that gets in your blood when you get in the grocery business that’s hard to describe.”
That passion for retail is manifest in his membership on many corporate boards, such as the grocery and manufacturer collaborative board at the Retail Council of Canada and the board of directors at the Food Manufacturers Institute.
Outside work, Jones enjoys going to Vancouver Canucks and BC Lions games, golfing and walking with his wife on White Rock beach, which is near his south Surrey home.
“I’m having a great time,” he said. “I’m not interested in retiring any time soon.” •
