The key to the supermarkets was their location - they were in areas relatively poorly served by the larger supermarkets. The brief, according to Wigley, was relatively straightforward. Sargo, who admits he is a hoarder, says he remembered a feature on branding published in BRW in July 1998, retrieved it from a file and found the name Principals, a Sydney-based consultancy that specialises in branding.Ĭharles Wigley, 34, the Principals planning executive who developed the Fresco name, says Sargo came in off the street and said he was about to start a new supermarket chain. I had all the expertise available to me, so it was quite easy to pick people." All the people, that is, except those who would name the new group. "I identified the first stores, signed the heads of agreement and thought, 'OK, now I've got to create a name, make sure I get premises for the offices, and investigate and set in motion computerisation of the group'. Sargo signed a heads of agreement with Davids late in October 1998, and the search for a brand name for his stores began.
(Sargo's forecast means that each store will turn over $12.5 million a year, or $240,000 a week - a modest figure compared with other supermarkets.) He predicts that by June 2000, when Fresco will have 20 stores, the company's annual sales will be $250 million. Sargo, Duchen and Pascoes each own 33.3% of Fresco Supermarkets Holdings.Īccording to Sargo, the seven stores have annual sales of $111.8 million. Working with his two silent partners in the business - Duchen Holdings and Pascoes Chemicals, both of which are owned by expatriate South Africans - Sargo raised $4.2 million to acquire seven Jewel outlets from Davids, with an option to take over another 13. That's when I started negotiating with Davids." I saw this as probably the last opportunity, certainly in my generation, to create a chain relatively easily. The stores were there and I knew they were profitable, so all I had to do was to set up the infrastructure, and obviously have the capital base and the management structure to run it. "Basically, I saw this as an opportunity to set up a supermarket chain relatively cheaply. "Working at Davids, I knew the Jewel chain and that they had some fairly good sites, as well as an excellent name as a discounter in the marketplace, certainly in the early and mid-1990s," Sargo says. Sargo says that when he heard Davids was selling its retail stores, he had to made a "now or never" decision: did he want to remain an employee, or set up another grocery retail chain? In 1998, Davids, under pressure from its bankers, decided to sell most of the grocery stores it owned, including the Jewel chain, to focus on wholesaling. He was working for the company in 1995 when it bought the Jewel Food Stores discount supermarket chain from Jim Fleming. Soon after his arrival, Sargo joined the grocery wholesaler Davids Limited. Sargo emigrated to Australia five years ago, after he had built Score Supermarkets into a chain of 100 discount grocery stories. For Sargo, 50, their debut marks a new phase in a grocery retailing and wholesaling career that began when he was a teenager working in a corner shop in South Africa. The first Fresco stores will open officially on September 18 in the Sydney suburbs of Taren Point, Hurstville, North Ryde, Summer Hill and Riverstone.
Sargo hopes it will persuade grocery shoppers to change their negative perceptions of the small, local supermarket. It would be hard to find anybody more enthusiastic about the launching of a new name. Not that he was unhappy with the second choice. Presented with several options by consultants charged with finding a name to communicate the core values of the stores, Sargo preferred The Corner Store.īut that name had already been registered, deflating Sargo's vision of owning supermarkets emblazoned with the words The Corner Store on every corner. When Joe Sargo selected the brand name Fresco for his new chain of supermarkets in Sydney, it was not his first choice. A new entrant hopes a catchy name will help secure customer loyalty for his chain of refreshed Jewel stores.
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