The privately owned Harps Food Stores Inc., headquartered in Springdale, will probably announce its online strategy within a year. That’s the word from Harps CEO Kim Eskew in an interview with Arkansas Business.Eskew told Arkansas Business he knows his company will eventually have to dip its toe into the e-commerce waters, but he isnt necessarily excited about it.
Eskew says the challenge for Harps is figuring out what kind of e-commerce strategy can be profitable.
Eskew says the reason Harps is slow to get into stuff is it is really hard for him to be excited about doing something that costs money, and he cant figure out how the food stores can make money doing this.
Eskew said he understands the importance of being online, but Harps has survived since 1930 by avoiding mistakes. It isnt going to rush into anything.
One strategy that Harps is considering is called Click and Collect: A customer places an online order, a store employee fills it, and the customer drives to the store to pick it up. Eskew said the model might be growing in popularity but it eats into profit: Harps would collect more money if a customer comes to the store to shop than if it an employee fills the order. Thats because Eskew would have to pay someone to do what shoppers now do for themselves.
Eskew says he’s paying his person to do fill the order for the customer. Currently, no one is charging to do that, but it costs something to do it. He says he’s not charging anything but lets say it costs him $8 to select that order. Then he’s going to make $8 less on that order. What does that begin to look like? It looks like profits are beginning to go down. The more of a business that transitions to that, the less the company is making on each one of those orders.
Harps has not just survived since Harvard and Floy Harp opened a grocery store in downtown Springdale in 1930.
Survival, while no small task in the ferocious world of retail, would imply Harps has limped along. Instead, it has grown and stabilized as a regional grocery force with 88 stores in Arkansas, Oklahoma and Missouri, and one lone location in Kansas.
In fiscal year 2017, which ended in August, Harps reported revenue of $730 million, a 6.25 percent increase from 2016. This year, Harps has opened six stores, four of them newly built and two acquired in Oklahoma and rebranded as Harps.
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