The first place people go after a natural disaster is the grocery store. Having well-built and functioning stores in areas prone to such disasters is not only necessary for business but also a public service. So when Jim Harte, Topco Associates’ construction category manager, realized he could help prominent grocery-chain members in Houston after last year’s Hurricane Harvey flooded the area, he sprang into action.
“I reached out to our vendors and said, ‘I’ve got a lot of supermarket chains impacted; is there anything you can do to assist them?’” Harte recalls. He received immediate responses from many of Topco’s construction vendors, including flooring vendor Armstrong. “They actually reduced the cost of their product to the members by a pretty good amount to assist them in redeveloping their stores and getting them open at a quick pace and at minimal cost,” Harte says. This was not Harte’s first experience with a natural disaster in Houston; he had worked as an insurance adjuster at the beginning of his career after another hurricane in the 1980s.
It is this kind of service that Topco Associates provides for the grocery retailers, wholesalers, and other food-service businesses that make up the member-owned company. Harte provides sourcing assistance and construction services to members, who receive the savings and income the company generates annually.
Harte uses the power of aggregated buying to consolidate the materials needed by many members for maintenance and construction into large purchases that can be negotiated at lower prices than if the members were to buy the materials themselves. His deals include such materials as flooring, roofing, bar joists, decking, lighting, doors, paints, coatings, tiling, and even restrooms in a box.
When Harte joined Topco two and a half years ago, the company’s construction spending was $24 million. A little more than a year later, that spending exceeded $36 million—so his work has already had a sizable positive impact.
Harte was able to accomplish this by bringing credibility and expertise to the construction category within Topco’s Indirect Spend program. This not only increased the dollar amount of the construction programs Topco offers but also raised the number of members participating.
Topco’s program managers arrange for Harte to meet with members about their construction needs. “I can talk the same lingo that they do,” he explains. “I suffered many of the same pains that they suffer in my other positions as far as getting a store open or missing a deadline and knowing why that happens.”
He compares getting a member and vendor together to matchmaking. “Once they meet, they save money, and everything is good,” he says.
A recent project for Ace Hardware’s distribution center in Wilton, New York, involved procuring steel to expand the center’s mezzanine. Harte was able to provide projected savings averaging 6.5 percent of $1 million by arranging for the structure to be produced and installed by one of Topco’s approximately 70 vendors.
“We try to find areas where we can be most helpful,” Harte says, adding that usually regional products such as concrete cannot be sourced cost-effectively using aggregated methods. But, other construction materials can be obtained by Topco at savings of up to 40 percent in some cases, Harte estimates.
Topco envisioned these kinds of results when it decided to hire an expert for the construction category of its Indirect Spend program four years ago. “They were looking for a person who had experience and could speak with members’ construction teams and designers to understand their needs and problems,” Harte explains.
Before joining Topco, Harte had spent 21 years at Stride Rite, working his way up to director of construction. Before that, he had spent three years managing the construction of Burger Kings, and just before that, he had worked as an insurance property adjuster.
“I’ve been in retail construction for just about as long as I can remember, but Topco was a total change for me because while I’ve done my own bidding, I had never done it on a large scale and for multiple companies,” Harte says. “So I brought some of the practices that I used in the past and put them together with the members to help them out.”
The innovative solutions that Topco Associates formulates are what its grocery-industry members need, with new competitors entering markets and food prices dropping. This requires constant learning to find new solutions to shifting conditions. “Our members are passionate about what they do in terms of developing their supermarkets or retail distribution centers, and their passion has carried over and really pushed me to try and help them more than I thought was possible,” Harte observes.
“It’s been a good experience, in that Topco really works to bring value to its members and help them learn things every day,” Harte adds. “I learn things every day in terms of how to be a better sourcing person. I used to think I was really good at it, but I’m better at it two and a half years later at Topco than I was when I got here. As long as I’ve been in the business, if you stop learning, then it’s not fun anymore.”
