Through the Lens of Lettuce

Hammer & Wikan received top ratings for customer service and community involvement. “J.B. Gottstein was the one that recommended us,” says general manager Jim Floyd.

He further credits the wholesaler with enabling Hammer & Wikan to offer big-store variety in a small-town footprint. “We don’t just have one brand of coffee, one brand of paper towels, whatever,” Floyd says. “We pride ourselves on a great selection.”

Norwegian immigrants John Hammer and Andrew Wikan opened the dry goods and dairy store in 1921. Their descendants still own the company, which expanded in 1996 from the downtown hardware store with a separate grocery store up the hill. “Everybody in Petersburg has a PO box, so everybody has to go,” says Floyd of the out-of-the-way location. “The company nearly went bankrupt because people didn’t want to go the 1 mile up the road to the grocery store, and what saved it is when the post office moved up there.”

Trading Post

“Out of the way” describes every one of AC’s locations. “We’ve decided our mission is to be remote retailers,” says AC President Kyle Hill.

AC is the Alaska branch of The North West Company, a Winnipeg-based conglomerate which also operates stores in northern Canada, the Caribbean, and the South Pacific. AC originated as the mercantile assets of the Russian-American Company sold to a trio of California Forty-Niners in 1867 (when the Russian Empire sold its North American territory to the United States). Yet The North West Company surpasses AC’s antiquity, tracing its ancestry to the Hudson’s Bay Company established in 1670.

Canadian ownership of AC arrived in 1992, when the Community Enterprise Development Corporation sold the struggling chain. “One of the conditions of the purchase was that The North West Company would make significant investment into the business,” Hill explains.

The new owner expanded from sixteen locations to thirty-seven. The company’s Pacific Alaska Wholesale branch distributes to 100 other retailers, and it is growing ecommerce via its Span Elite service.

Ownership aside, Hill regards AC as an independent Anchorage-based company. “All of the retail decision making is done here,” he says. “We don’t have a whole lot of direction coming from the Canadian office.”

Local direction lets AC tailor its inventory, from fishing lures to whale bombs. Hill points out that the Bethel and Nome AC stores rank among the country’s busiest Honda ATV dealerships.

In nine communities AC is the only game in town, and it’s managed to avoid direct competition with Three Bears Alaska, the other statewide rural retailer. “We have (not by any kind of agreement or anything like that) chosen our paths, where AC is the off-road retailer and Three Bears is the on-road retailer,” Hill says.

Hill’s eye is on much larger competitors. “We do compete indirectly with Amazon, Walmart, and Target. Those are the three big retailers that ship out to rural Alaska from hubs in Anchorage or distribution centers in the Lower 48,” he says.

Hyped Up

Target has a food department, but without fresh produce or meats it doesn’t qualify as a “hypermarket,” which refers to a store that sells groceries and general merchandise (read: anything else but groceries). Walmart sold only general merchandise when its first Alaska locations opened simultaneously on March 29, 1994, in Wasilla, Midtown Anchorage, and South Anchorage. Later they were remodeled into Supercenters with grocery sections, and Walmart now has seven Supercenters in Alaska.

Fred Meyer went through a similar transformation. The Oregon-based grocery chain arrived in Alaska in 1975 by acquiring the Valu-Mart department store in Midtown. Adding groceries in the ‘90s delivered on the promise of founder Friedrich Grubmeyer. “He really built the first one-stop shopping experience in America,” says Todd Kammeyer, president of Fred Meyer.

Kammeyer says he visits Alaska several times a year to check on the company’s eleven Fred Meyer locations. “We have some fantastic partnerships with Alaska companies and carry many items produced in that market. For example, we pull a tremendous amount of produce from Alaska-grown areas: CityFarms herbs or Bell’s [Nursery] tomatoes or Pam’s carrots,” he says.

Sourcing locally, in addition to leveraging Alaskan pride, avoids the difficulty of interstate shipping. “Getting products to Alaska and operating in that market is complex. It’s probably the most complex area that Fred Meyer operates in,” says Kammeyer. He adds that he’s especially proud of the associates who make it happen.

Fred Meyer is just a small portion of the Cincinnati-based Kroger organization, with 132 stores out of more than 2,700 nationwide, yet its footprint in Alaska is oversized. In Idaho, Oregon, and Washington, each store serves about 47,000 households, on average; the ratio in Alaska is one store for every 24,000.

New Math

The mid-‘80s saw another retail model enter the Alaska market: the warehouse club. Costco opened in South Anchorage in October 1984, followed three weeks later by Price Savers in East Anchorage. That store became a Kmart-owned PACE Membership Warehouse in 1991 and a Walmart-owned Sam’s Club in 1994. Sam’s Club relocated to Tikahtnu Commons before exiting the state in 2018.

Traditional supermarkets don’t charge membership fees, but loyalty cards have become a fact of life since the late ‘80s. Kammeyer says the focus at Fred Meyer is simplifying the experience. “We look at the full value proposition to offer customers great prices but also an opportunity to save on fuel,” he says. “Also a lot of personalization: customers that have our rewards card will receive (in the mail or digitally) a tremendous amount of personalized coupons.”

An unusual holdout, AC has never adopted a loyalty program. “We talk about it, we debate it, and we decide every time (at least, up to now) that we don’t think it would be a good use of time or money for us,” says Hill. The communities AC serves are thin on partners, like gas stations, that could offer rewards. Even airline miles don’t pencil out.

Hill has observed that, more than ever, shoppers demand convenience and variety. “Our customers expect us to have bananas in the store every day even though it’s a remote community, and it’s difficult to get them there,” he says.

Another change is greater reliance on inventory analytics. “In most grocery stores including our own, what is stocked—and where it sits on the shelf (at eye level, high or low), what discounts are offered, and so on—is much more data driven,” says Hill. “Look at pricing at Walmart or Amazon: they don’t even end in 9s anymore. An algorithm is telling you how to get every cent right there.” The underlying math attracted Hill, trained as a physicist, to the retail sector.

Kammeyer’s career, by contrast, has been supermarkets all the way, starting as a store clerk in South Ogden, Utah. “Bagging groceries, bringing in carts, and cleaning the restrooms,” Kammeyer recalls. “I loved the people aspect, the affiliation I had with both associates and customers.” Kammeyer studied business administration in college, and he’s been president of Fred Meyer since 2022.

Supermarkets are very conscious that ecommerce already put many general merchandise retailers out of business, and food sales are not invulnerable. “Online shopping is creeping into the grocery sector,” says Hill. “So we launched our own online shopping platform, both in stores and here in Anchorage. That’s been a major change.”

But neighborhood grocers will not go away, in Kammeyer’s view. “With online and ecommerce, food is an area where people still want to come to brick-and-mortar [stores] and have that experience, to be able to pick from a variety of items,” he says.

Sites for Growth

Hammer & Wikan embarked on its second century in business by rebranding in 2021 with décor inspired by the Norwegian heritage of the store’s founders (and Petersburg generally). The store also invested in electronic shelf labels, which Floyd says spares the cost of new price tags and the labor of rewriting them. And they’re more accurate: “Whatever the label says is always what rings through the register because it comes from the [point of sale] system,” he says.

No other supermarket in Alaska has electronic shelf labels, Floyd says, and Hammer & Wikan is pioneering another technology: produce recognition cameras at self-checkout stands. “The one thing that slows down self checkout is produce,” Floyd says, so the cameras assist by distinguishing, say, Gala from Fuji apples.

Not to be left behind, AC stores are deploying computer-assisted ordering. “Next year at AC, we’re rolling out this new technology: auto replenishment,” says Hill.

The venerable AC is investing in online shopping, too, but brick-and-mortar locations are not forgotten. “We expect to open more stores this year, next year, and really be the retailer of choice in rural Alaska,” says Hill.

Fred Meyer hasn’t finished staking out territory either. “We’re looking at new sites for growth,” Kammeyer teases, but naturally he cannot disclose where those sites might be. “We know there are areas where there are a lot of new rooftops and new customers that need to have a great store, and we want to be there.”

Probably not Petersburg though. Floyd is satisfied that Little Norway is safe from major competitors horning in on Hammer & Wikan’s home turf. Too much muskeg and nowhere to build. “Even Alaska Commercial has looked to get a foothold here,” says Floyd, “but no one wants to go head-to-head with us.”

All well and good; Hill says other communities tell him they want an AC in town. “We’re not just running grocery stores,” he says. “We’re providing community hubs for people to shop and supply themselves with what they need to live their lives.”