Romeo IGA opens new Mirvac South Eveleigh supermarket to compete with Coles, Woolies
The owner of a local rival to grocery giants Coles and Woolworths has revealed how he feels he can thrive alongside the couple.
Joseph Romeo, co-owner of Romeo’s Retail Group, which is quietly opening stores in some of the most successful places of large grocers, also asked why supermarket giants are removing popular features like deli counters.
Mr Romeo spoke on news.com.au at the opening of the new IGA Romeo’s Food Hall in the $ 1 billion South Eveleigh district, south of Sydney’s CBD, being built by the developer Mirvac.
Romeo’s – long a major competitor to the Big Two in Adelaide – now has 12 stores in Sydney alongside its 27 in South Australia. In Sydney’s CBD, Romeo’s IGA now has more supermarkets closer to the city center than Coles, including a branch in a space that until recently was a Coles store.
Mr Romeo said his family’s business was on an unexpected opening spree in Sydney.
“It should have been one store a year in Sydney, but it was all delayed by COVID, so now we have three openings in just three months,” he said.
The company was founded by the father and mother of Mr. Romeo, Elisabeth and Tony, in 1987.
He started stacking shelves after school when he was just 12 in the first store in the southern suburbs of Adelaide. With brothers Paul and Anthony, he now runs the business.
The chic store, surrounded by shiny new restaurants and office buildings for people like the Commonwealth Bank and CSIRO, is a world away from the sometimes soulless supermarket box. Sitting in a former heritage-listed railway workshop, parts of old industrial machines and cast iron, the columns worn by time compete for space with fruits and vegetables.
To get from the parking lot to the store, shoppers climb into a tunnel with wraparound digital screens showcasing the building’s railway heritage.
Fruits and vegetables are displayed on stalls, there is a huge display of fresh flowers, salamis hang from the ceiling of the delicatessen near a pizza oven and a walk-in cheese shop. Mr Romeo said the idea was for it to look more like a market than a supermarket.
How Romeo plans to tackle Coles and Woolies
Romeo’s thrives in some of Sydney’s most exclusive locations. Paddington and Darlinghurst both have a store. The Summer Hill branch in western Sydney caused a brief frenzy on social media site TikTok when a customer called it “incredible next-level” in part because of her cheese factory.
Romeo’s newest store in George St’s CBD – under the ‘Locali’ brand – has its own restaurant run by chef Orazio D’Elia. Another Locali store will open in Wynyard Station, a short walk from Coles and Woolworths, within a few weeks.
But Mr Romeo said it wasn’t all about classy antics, but not assuming every suburb wanted the same store.
“Our competitors are big and employ a lot of Australians – good for them – but they have a cookie cutter approach,” he said.
“With Romeo’s you won’t get a cookie cutter deal, you get something that works for the community and I believe we can meet our local demographics much closer than our competition.
“Here, we are an affluent neighborhood supermarket,” he says, pointing to a wall of kombucha which he stores more than Coke.
“But then we have a store in Doonside (a western suburb of Sydney) which is all about the price. Now it might be cheap and nasty, but we didn’t, we made great food at an affordable price.
The Doonside store carries the SuperValu IGA branding and is painted bright yellow. Indeed, a number of its stores in Adelaide are more on the value end of the shopping spectrum.
To be fair, Woolworths and Coles have expanded their store formats far beyond the simple one-size-fits-all supermarket of yesteryear. Woolworths has a line of small Metro branded stores focused on take out food. Coles has a number of smaller “Coles Local” stores and has divided its existing supermarkets into three formats, with the fancier stores getting “wedges” for cheese and do-it-yourself pizzas.
But this diversification has had its limits. Woolworths opened around 12 Thomas Dux-branded gourmet stores, but they all disappeared as Coles abandoned its Bi-Lo value chain.
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Put on cold cuts, while the big grocers take them out
Another difference is the deli counters. Woolworths has cut delicatessens from some small downtown supermarkets; Coles does the same in a number of stores with lower profit margins.
Woolies said it had pulled grocery stores from some of its Metro stores after “limited demand from customers,” Coles said it had cut counters at some smaller, less-frequented stores. The delis will remain in most of the pair’s stores.
On the other hand, all the new Romeo stores offer delicatessens.
“I love the charcuterie; it is a point of difference and that is why we are putting it in place.
Mr. Romeo admits that stylish supermarkets don’t come cheap. Although he does not reveal the budget for the new South Eveleigh branch, he admits – a little sheepishly – that it cost “a lot; millions ”of his family’s money.
A long lease, he said, would hopefully mean that they recoup the cost of the development at one point or another.
Mr Romeo said his stores, whether gourmet or value, questioned the view that IGAs are often a bit cramped and on the heel.
“It changes and evolves. IGA has 1,400 stores across the country and you’re going to have a hard time having 1,400 at the same level, ”he said.
“But I think the best IGA retailers are the best retailers in the world and that is proven by the many awards they’ve won.”
Why the developer chose IGA
Mirvac is no stranger to Coles and Woolworths – it has malls that offer both. He approached the majors for the South Eveleigh project. But national portfolio manager Joanna Corrick told news.com.au the developer wanted something different for the neighborhood that will eventually house 18,000 workers, including 10,000 with the Commonwealth Bank alone.
He wanted a grocer to sit next to food-focused street restaurants in converted shipping containers; a new restaurant by celebrity chef Kylie Kwong and a bar overseen by famous bartender Matt Whiley where everything from canapes to cocktail glasses is made from recycled materials.
“It was about providing something unique. Why would the ABC want to move here if they just wanted to get what they could already get in CBD? Ms. Corrick said.
“We had to think about heritage and location, so we wanted to find suitable retailers for that.
“We didn’t just want to sell a product, but to celebrate the way things are made and Romeo’s is a family business and they are really passionate about food.
Ms Corrick said South Eveleigh was a ‘hybrid development’ that was as much about the local community – 30,000 people live within walking distance – as it was about office tenants.
Mr Romeo admits moving his family to the NSW market is not without risk. But he is convinced that they will prosper.
“As a family we have coexisted with Coles and Woolworths in South Australia for 35 years, we are increasing our market share and we will continue to grow,” he said.
Being on opening day, the store is frantic. However, he rushes in: “I have to pick up mom and dad at the airport.”
Tony and Elisabeth aren’t just celebrating the store opening, they can’t wait to see how their family business grows away from their home state of South Australia.