Akhavan's formula: offer fresh basics at low prices
To walk the aisles of Akhavan, a two-store, multi-ethnic supermarket in Montreal, is akin to visiting a foreign land.
The store’s co-owner, Ali Ajabi, an immigrant from Iran, runs the Middle Eastern–focused banner with his three brothers.
At first glance, Akhavan, located in Montreal’s Notre Dame de Grace borough and in the West Island suburb of Pierrefonds, appears to be a no-frills, no-glitz cornucopia of imported foods, with many items priced 10% to 20% lower than what a traditional grocer might charge.
But Akhavan offers its customers more than just exotic fare.
The secret to Akhavan’s success is a simple formula: keep prices low by ensuring sales volume is high. How so? By eschewing loss leaders, Ajabi says: “We have to make money on every item, even if it’s on sale.” He points to a tomato to prove his point: If a tomato costs him two dollars, he’ll sell it for $2.10.
But it’s not price alone that has helped Ajabi win customers since he first went into business, 25 years ago. It’s also the selection. Take the 17,000-square-foot West Island store, once home to a Metro. It features wide, bright aisles and a large selection of items
Shoppers can browse a wide array of imported goods, including Turkish rose jam and vine leaves, grape molasses, Egyptian molasses and lentils and bulgur from Montreal-based Amira Enterprises, an importer of nuts and dried fruit. At the deli, all the meat is halal.
Akhavan also has a warehouse and factory where the store’s two house labels, Jahan and Akhavan, get packed and shipped off to other retailers across the country.
Akhavan’s success isn’t just about what it carries, but also what it doesn’t. A key part of its food strategy is to avoid stocking anything expensive or processed–items Ajabi says his customers neither need nor want.
“I sell good cheese, I sell rice and I sell meat and vegetables. I don’t sell strawberry yogurt,” he says. “I sell yogurt, I sell strawberries. You put strawberries or raspberries or whatever you want in your yogurt yourself.”
Even though profits have been squeezed by the shrinking value of the loonie, Ajabi still sticks to his intuition-based strategy.
“We never program, we never market, we never plan,” he says. Instead, the store stays focused on what people need.
Before the store stocks a product, Ajabi asks himself two questions: Can his customers afford it? And do they want it? Indeed, listening to his customers has resulted in Akhavan earning more than $25 million in annual revenue, with revenue growth between 10% and 20% per year.
Ajabi and his brothers learned about the art of food retailing from their father, who worked in an Iranian bazaar and taught his sons that there’s more to selling food than making a sale.
“I want people to take home good food–rice, lentils, meat, vegetables–and cook it and eat with their family and be happy,” says Ajabi. “When I die, I want people to say, ‘God bless him,’ not, ‘God damn him.’ ”
Akhavan’s been the go-to grocer for recent and not-so-recent immigrants. And not only those from Iran, but also shoppers from Greece, China, Iraq, Lebanon and Syria, as well as those born in Canada who are keen to experiment with foods from other lands.
As Concordia University marketing professor Jordan LeBel explains, grocers such as Akhavan speak to the rise of “eating differently” in Canada, with more consumers looking for an authentic shopping experience. “You get the one-on-one interaction. The person behind the nut counter helps you discover something you hadn’t planned on buying,” says LeBel.
Ajabi envisions opening three or four more stores somewhere in Montreal in the future. But just like his food strategy, he doesn’t have a timetable in mind for store openings. And he doesn’t know yet where those new stores will be located. “When I see the place,” Ajabi surmises, “that’s the plan.”