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NUMERO UNO MARKET SHOPPER'S SHUTTLE SERVICE
CASE STUDY
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NIJMERO UNO MARKET SHOPPERS' SHUTTLE SERVICE
Numero Uno Market is a small and growing chain of supermarkets,
principally located in the inner city areas of T=os Angeles. It is a privately owned
operation that has bolstered its business and profits through innovative marketing
of its products and services. A key part of that marketing is its Shopperst Van
Shuttle Service. According to its General Manager, by capitalizing on the
availability of public transportation services and the high concentration of transit
dependency in the inner city, Numero Uno has implemented a unique
transportation service for its customers. The service is so successful for the
customers and the Market, it is being replicated by supermarket competitors.
The most successful operation of this service originates at the Peterson
Blvd./San Pedro Street location which is in the South Central area of the City of Los
Angeles. The nine vans that operate from this location are providing
complementary transportation services to the Los Angeles County Metropolitan
Transportation Authority, boosting Numero Uno sales and profits, employing
scores of people that might otherwise be unemployed and all at no expense to
public taxpayers.
ORIGIN OF THE PROGRAM
The owner of Numero Uno Market some years ago recognized the difficulty
for a majority of his transit dependent customers to buy and then carry their
groceries home without their own automobile, very often with one or more children
and at a cost and ease that could not be met by the public transit system. It made
sense to him to provide a service that would facilitate customers shopping at his
market often and preferably over other competitors. Thus the van shuttle service
from the store to home was initiated.
Over the past seven years the service has been increased as the demanc! and
need for shoppers to be taken home has increased. Initially, the market owner
attempted to use full size school buses to transport his customers home. This proved
to be unsuccessful due to the size and lack of maneuverability of the buses,
maintenance and operation costs, and having too great capacity for the average
runs being made. Numero Uno began to better provide the service by purchasing
and remodeling used vans from hotels, and car rental agencies. Numero Uno's fleet
has increased from four vans six years ago to eleven vans currently operating
within the system.
The only criterion for being able to ride the vans was for the customer to have
purchased at least $30 in groceries. There was no cost to the customer for the
service.
1
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CURRENT PUBLIC TRANSIT SERVICE AND AREA DEMOGRAPHICS
Since the service has been initiated based on the availability of public transit
and lack of access by the majority of residents to their own automobiles, it is
important to know what the current services and demographics are in Numero
Uno's immediate market area. Using a radius of approximately 2-miles from the
Jefferson Numero Uno market and analyzing ~ zip codes within that radius,
evidence is provided to support the thesis for Numero Uno providing this service.
There are 77,212 households in the area, of which 46,698 (60.5%) are
Hispanic. The total population is 294,231 of which 10S,425 work and 65,052 have
access to their own car or carpool. That means that 78% of the population is
dependent on some other means of transportation than their own vehicles. In
addition, the median income of all households is $15,001, with 58603 (75.9%) of
households bringing in less than $30,000 annually. (1)
Numero Uno Market is located at an intersection where two Los Angeles
Metropolitan Transportation Authority (MTA) bus lines also intersect and provide
services East/West and North/South, and one other East/West line is 1/2 half mile
north. These lines (51 and 102, and 14) average 10 minute headways and provide
multiple transfer points with other major MTA routes. The 51 and 14 lines
according to the MTA planning department
bus routes of the MTA. (2,3)
CURRENT OPERATIONS
1'
are in the top fifteen percent of the 200
The current operations of the van service are fully integrated into the
market's operational plans and budget. The van service operates as follows:
A shopper arrives at the market by walking, being brought or dropped off
by automobile or public transportation.
When a customer purchases $30 or more in groceries, he/she can then
take one of the vans from the store directly to his/her front door, still at
no cost.
· Van operators decide the routing for each trip as they load their
customers, bags and other customer family members. A typical van may
carry 14 seated passengers along with approximately thirty-two grocery
bags.
The vans are in communication with a dispatcher via walkie-talkies.
Peak periods of use are usually 4-9 p.m. Monday through Friday.
Saturday and Sunday afternoons are also very heavy.
Average distance for trips is 3-S miles. However, vans have delivered
customers as far as twenty miles from the market.
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To expedite the shopping trip for customers who use the van service,
operations within the market are systematized to minimize waiting time for the
customer:
To begin with, during peak periods twelve checkstands are open. Each
stand has a checker, a bagger and an additional banner to escort
customers to cars, MTA buses or the vans.
Secondly, shopping aisles are wider (~-feet vs. typical 6-7 feet in width).
This allows for easy and quick movement of customers with children to go
up and down aisles.
· Finally, shelves are stocked all day long so that food merchandise is
always readily available for the customers.
There are four Numero Uno supermarkets in the Los Angeles area with three
more planned for opening in 1998. Two will be in the City of I,os Angeles, (Pico &
Alvarado and Figueroa & gist Street). The third is in the city of Pomona (east end
~ . . . ~ _ ~ .. ..
Or loos Angetes county'. ot tnose currently open, one is ten blocks away from the 701
Jefferson site, another is near Dodger Stadium in Cypress Park and the newest
store is in the city of South E! Monte.
There are nine vans operating out of the 701 Jefferson location. Vans travel
anywhere the shopper needs to go. The General Manager stated the average
distance is 3-S miles. The new South El Monte store has two vans assigned to it at
the present time. It may not be as successful as the 701 location primarily due to
the lack of good public transportation in South E} Monte, according to the General
Manager.
COSTS AND USAGE
The usage of the service provided is estimated to be twenty-seven thousand
van trips per year, transporting over one hundred and fifteen thousand patrons to
their homes.
Table A reflects the most recent counts/estimates taken of patronage on the
van service. It also reflects cost calculations for each trip and passenger.
The Nonhero Uno market on Peterson is a very successful operation,
principally due to its location and interaction with public transportation and its
store to home van shuttle service. Key characteristics and facts on this store
include:
· It is one of the top five revenue supermarkets in all of Los Angeles, with a
volume of $26 million a year.
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TABLE A
NUMERO UNO SUPERMAR~h'T
VAN SERVICE PROFILE (4)
Day | Shift | Trips | Vans | Psgr. | Total | Week | Year | Y . Cost
Time per per per Psgr. Psgrl Psgr] PsgrJ
S h if t S h if t Tri p Day Tri ps Tri ps Tri p
MONDAY 1 8a-4pm 1 0.5 12.5 12.5 166 1 21 ~1 10812/
4-9pm 6.5 4.5 5.0 146 55.5 2831
TU ES. 8a-4pm 10.5 2.5 2.5 66 212/ 10812/
4-9pm 6.5 4.5 5.0 146 55.5 2831
WEDS. 1 8a-4pm 1 0.5 1 2.5 1 2.5 1 66 1 21 ~1 10812/
4-9pm 6.5 4.5 5.0 146 55.5 2831
THURS. 1 8a-4pm 1 0 5 r2 5 1 2.5 ~ 66 1 21 ~1 10812/
4-9pm 6.5 4.5 5.0 146 55.5 2831
FRIDAY 1 8a-4pm 1 05 1 2.5 1 2.5 1 66 T 21 ~1 10812/
4-9pm 6.5 4.5 5.0 146 55.5 2831
SATUR. ~ 8a-10a ~ >.5 ~ 4.5 ~ 3.0 ~ 34 ~619/ T 30950/
1 0-8pm 13 9.0 5.0 585 128 6400
SUNDAY r8a-10a 1 .5 1 4.5 1 3.0 1 34 1 619/ 1 30950/
1 0-8pm 13 9.0 5.0 585 128 6400
TOTALS 1 r 1 1 1 1 2298/ T 115960 1 $:I.16p
. 1 1 1 1 1 1 534 1 26955 1 $927t
Shift Time: Those periods in which van service provision and utilization averages vary.
Trips Per Shift: Derived from dividing the number of hours (in minutes) in a shift and then dividing by 45
minutes---the average time for a van round-trip.
Vans Per Shift: Based on past year's average number of vans in service during designated time shifts.
Passengers Per Trip: Conservative average of number of passengers per trip during peak and non peak
shifts.
Total Passengers Per Day: Trips X Vans X Passengers Per Trip.
Total Weekly Passengers: Combination of M-F (Fives times weekday total) and Saturday/Sunday (Two
times weekend day total).
Total Weekly Trips: Combination of weekday and weekend daily trips.
Yearly Passengers: Combination of weekday weekly totals X 51 weeks, and weekend weekly totals X 50
weeks.
Yearly Trips: Combination of weekday weekly trips total X 51 weeks, and weekend weekly totals X 50
weeks.
Yearly Cost Per Passenger: One percent of Annual Sales Volume divided by Total Annual Passengers.
(.001 X $25,000,000= $250,000/1 15,960)
Yearly Cost Per Trip: One percent of Annual Sales Volume divided by Total Annual Van Trips. (.001 X
$25,000,000= $250,000/26,955)
4
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The store is has 32,000 square feet with only 16,000 square feet of sales
floor.
N,~n~ero Uno employs 175 people at this location. This is compared to an
average of 76 employees in supermarket chains which are two to three
times larger in retail space.
The store does have 165 parking spaces in its parking lot.
Less than 1% of the gross volume pays for all van operators and the
maintenance and operational costs of the van service.
There are no public funds used for this operation.
Benefits
It is very clear that several entities have and are benefiting from this
service, and will benefit even more in the future.
1. Numero Uno Market benefits through its ability to retain and expand on
its customer base and increase its profits.
2. Residents in the area around Nonhero Uno stores benefit from
employment opportunities.
3. Transit-dependent customers benefit from being able to accomplish a
basic need, with minimal difficulty and cost.
4. The MTA in Los Angeles benefits from being a part of facilitating a
specific need of these transit-dependent shoppers (in unison with Numero
Uno's service) and thus having a more favorable image and credibility
with at least this segment of the community. MTA may also be
benefitting in a small amount at the fare box, by those who use public
transit vehicles as the means to get to the Numero Uno market. These
trips may not otherwise be taken on the MTA. (3)
5. Other residents of inner city areas of Los Angeles are beginning to benefit
as other supermarket chains are replicating the service of Numero Uno.
6.
7.
The MTA is looking at incorporating more of its bus operations and
intermodal transit centers at shopping centers throughout its service
area. In inner city areas, these centers are usually anchored by
supermarkets. (3)
Taxpayers are benefitting as more people are employed and transit-
dependent needs are being met, even in small increments, tax dollars can
be utilized in other areas of public need.
5
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HEY ELEMENTS OF SUCCESS
The General Manager of Numero Uno made it very clear that the "key" to
their operation is good. accessible. reliable public transportation for the
shoppers to get to their respective stores. The MTA, though bombarded with
charges of providing less than enough bus transportation services for residents in
Los Angeles, does have a basic transportation system in inner city areas
that benefits transit-dependent consumers and employees, and private
sector businesses and corporations.
This basic transportation system of buses has been interwoven into the business
plan of one private entrepreneur to create a successful operation that is benefitting
the greater community being served by that business. That business plan
incorporates:
1) Recognition of needs of the consumer and potential consumers of Numero
Uno Market.
2) Identification of resources (MTA) available to help address those
recognized needs (better transportation services).
.
3) Creation of niche marketing within the business being operated to attract
consumers.
4) Capital investment necessary to facilitate meeting the consumer
transportation needs and the entrepreneur's desires.
5) Investment in the community through employment, fair pricing,
philanthropy, good service and being involved in other community
projects, programs and needs.
Numero Uno is continuing to expand its supermarket chain. The experiences
and successes of its current business operations are directing its expansion
program. Numero Uno intends to repeat its formula for success by identif ding areas
for expansion that meet the niche market segments criteria desired, and most
importantly have access to good, reliable public transportation. The I os
Angeles County Metropolitan Transportation Authority is clearly a part of this
business expansion for Nonhero Uno and those other chains who are now replicating
the store to home shuttle services.
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REFERENCES
1990 US CENSUS DATA, Database C90STF3B; Summary Level: ZIP
CODE.
2.
Los Angeles County Metropolitan Transportation Authority (MTA) Customer
Relations Department bus schedules, system maps.
Interviews with MTA staff from Planning, System Analysis, Customer
Relations and Area Teams.
Data and information based on in person interview and discussions of
operations with General Manager.
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Representative terms from entire chapter:
uno market
