Debra's Natural Gourmet proves that even in the face of big-box competition, a tiny player can become both a beloved local business and a profitable growth company.
Five Best Hometown Businesses
Business:Debra's Natural Gourmet Place: Concord, Mass., population 16,000 CEO: Debra Stark, 53 Keys to success: Open-book management, profit sharing, employee education, and a fanatical devotion to community outreach
Maybe it's the homemade granola that draws them in. Or maybe it's the lure of a free total-body rejuvenation. Then again, it might just be that the staff treats its customers like friends. Whatever its appeal, Debra's Natural Gourmet proves that even in the face of big-box competition, a tiny player can become both a beloved local business and a profitable growth company. Motivated by a lifelong passion for all things all-natural, founder Debra Stark used $250,000 in capital to open the 2,200-square-foot healthful-food-and-lifestyle shop in 1989. She has since built it into a $2.5-million business.
When she started, Stark's only professional experience was as an office manager and a legal secretary. She was divorced, raising a teenager, and clueless about the natural-foods business. "People took bets that I wouldn't survive," she says.
Twelve years later Stark has clearly beaten the odds. Debra's Natural Gourmet now generates annual revenues exceeding $1,000 per square foot. That's more than four times the national industry average, says Thomas May, food editor of the trade journal Natural Foods Merchandiser. In 1998 another trade magazine, Health Foods Business, rated Debra's among the country's top 100 natural-foods stores.
Stark has achieved that stature even though such major players as Whole Foods Market Inc. have moved in nearby. She might have reacted defensively to the chains' arrival, mimicking their buying and pricing patterns. Instead, Stark stayed true to her vision, selling only minimally processed all-natural products and promoting her business as a community resource. That tack paid off as the advent of big natural-foods chains turned out to benefit -- not harm -- even tiny players in the $48-billion nutrition industry. The chains' aggressive marketing promoted a lifestyle to consumers who now search out independent shops like Stark's. "Everybody is looking for more connection and the personal touch that someone like Debra can really pull off," says May.
Several times a month, for example, Stark shoves aside the bread shelves to make space for workshop attendees. She exchanges advice and referrals with 35 health practitioners. She distributes to almost 8,000 customers a monthly newsletter full of notes on everything from anti-aging nutrients to milk thistle. And she tacks onto every paycheck updates on natural-foods and supplements research, which she urges staffers to share with shoppers.
It's a management strategy as simple as her recipe for Luscious Organic Chocolate Mousse: slather attention on every customer. Stark tells employees (she calls them "coworkers") to accommodate every customer's special requests. To ensure that sought-after remedies won't interfere with her customers' other medicinal regimes, Stark employs a registered nurse. And she's always on the lookout for bogus product claims.
"Her genuine concern for the well-being of her clientele really comes through," says John Hill, a cancer survivor who says he's shopped at Debra's Natural Gourmet since the day it opened. Her people, he says, "not only know you, they really care about you."
No question, Stark owes much of her loyal customer following -- and her 11 consecutive years of double-digit revenue growth -- to her 26 employees. And no wonder, for Stark has assigned every employee a management role. Staffers benchmark sales against regional and national averages. Others closely monitor product turnover. For her part, Stark prominently posts daily and monthly sales reports, highlighting the figures to show big advances or troublesome declines. And in a radical departure from most retailers, each quarter she distributes 20% of her after-tax profits among everyone -- "divided," she says, "according to each person's number of hours, salary, and how I see they're interacting with customers, each other, and me."
Having recently remarried, Stark has begun to hand over many of the day-to-day responsibilities. Still, she says she's confident that her "coworkers" will continue to grow the business. Her will, she notes, calls for Debra's to go to her only child, who is now 26 and studying to become a naturopathic physician. "If he doesn't want it," she adds, "it will be offered to the staff."