By Alexia Elejalde-Ruiz// Chicago Tribune
Stephanie Dremonas was about a year out of college when her dad, Pete’s Fresh Market co-founder James “Jimmy” Dremonas, called with a proposition.
“He said, ‘Are you done pushing paper?’” said Dremonas, who at the time was working at Mid-America Real Estate Group after graduating from Marquette University with a degree in real estate and finance. “He said, ‘I have real estate, come run my real estate.’”
Stephanie Dremonas, the third of five siblings, hadn’t paid much attention to her family’s grocery business growing up. So she was struck when her dad gave her a peek behind the scenes of the Chicago chain, which had just opened its ninth store.
She called her eldest sister, Vanessa Dremonas, who at the time worked in health care consulting after getting her master’s in education from Harvard University. This, she told her, was something special.
“I think seeing that this could be something a lot bigger, and we can double or triple this in size with the right team and foundation … I really thought that this is like Apple stock at $15, this is something that will take off,” Stephanie Dremonas, now 29, said.
The Dremonas sisters are at the controls of Pete’s Fresh Market as it pursues an ambitious expansion that is taking it well beyond its urban roots.
It recently opened its 14th store, in a former Whole Foods Market in Wheaton, and has new stores coming to Glen Ellyn and Lemont this fall. Four additional stores — in Matteson, New Lenox, Oak Park and Oak Lawn — are slated to open over the next two to three years.
That pace is aggressive for an independent grocer competing with deep-pocketed chains like Albertsons-owned Jewel-Osco, Kroger-owned Mariano’s, Amazon-owned Whole Foods Market and fast-growing discounter Aldi. A private company, Pete’s does not disclose sales information.
And the suburban focus is a hard pivot for a company that started as a South Side produce stand in the 1970s and became known for operating high-quality stores in mostly black and Latino Chicago neighborhoods where other grocery stores are scarce.
But Stephanie Dremonas said she saw the potential to appeal to all sorts of customers when she joined her father’s company just a few months after it opened its ninth store, in Oakbrook Terrace, in 2012, which was its first store to cater to a mostly white and international community.
“After Oakbrook opened, I felt invincible,” Dremonas said. “We had earned the Latino trade and the black trade, now we know how to do the Arabic and Greek and Polish trade — what can’t we do? We became very hungry to start going into neighborhoods that need you and want you.”
Pete’s, which focuses on produce and other fresh food but still offers a full lineup of groceries, has the wind at its back in part because consumer tastes are favoring fresh fare. That also makes it less vulnerable as grocery delivery becomes increasingly popular, though Pete’s also offers delivery.
“There is a desire by people to pick up their own apples and bananas and adjust the thickness of the meat at the counter,” said Neil Stern, a retail and grocer consultant with Chicago-based McMillan Doolittle.
But Pete’s also is proving to be among the best in the business, industry watchers say, standing apart from its rivals with a lively assortment, attractive stores, good value and keen focus on what its customers want.
Its stores in all locations are “always, always in great condition,” said Don Fitzgerald, a food industry consultant and former marketing and merchandising executive at Mariano’s. Its employees are friendly, its products are interesting and the experience makes grocery shopping not feel like a chore.
“That’s an outing, that’s a field trip,” Fitzgerald said of shopping at Pete’s. “That’s fun.”
Some other grocers that provide an immersive experience have “lost their specialness” under corporate ownership, Stern said. For example, Mariano’s under Kroger has replaced some of its Vero coffee shops with Starbucks, brought in Kroger’s private-label products and turned some departments that used to be staffed into self-service stations, he said.
“That’s an opportunity for people like Pete’s to come in and offer that (specialness),” Stern said. “It’s taking a little of the space that Mariano’s had when they first came into the market.”
To the Dremonas sisters, the success of the grocery chain rests squarely with their father, whom they call “Jimmy” or “J.D.” while at work (he is “Baba” at home). His work ethic, attention to detail and eye for aesthetics form the foundation of the company and set the standard for its 2,000 employees.
“It’s a classic business model: Sell good stuff at a good price and make the environment nice to shop in. There’s no secret to it,” Stephanie Dremonas said. “The execution is where the secret is.”
Jimmy Dremonas, who at 63 is still involved in the business daily, was 13 when he immigrated to Chicago from Pyrgos, Greece, with his parents and two brothers. He immediately went to work at a gas station and never finished the eighth grade, according to his daughters.
In the 1970s he and his brothers started a produce stand and soon had saved enough money to rent a 5,000-square-foot storefront at 87th Street and Stony Island Avenue in the Calumet Heights neighborhood. Eventually the family bought it, selling meat and canned goods as well as produce. They called the business Pete’s after their father and the eldest brother.
Dremonas in 1994 ventured out on his own and established a separate company he called Pete’s Market.
As the business grew, a priority emerged — the look of the stores.
“Even in more run-down areas, Jimmy will put the beautiful landscaping and the terrazzo flooring and the custom millwork and the marble walls,” said Vanessa Dremonas, 33. “Even areas where people are like, ‘You are crazy to put this investment in this area,’ he says, ‘There should not be a limitation for beauty.’”
The investment is worthwhile to Pete’s because it owns nearly all of its real estate. Only in Wheaton does it rent. That’s unusual for chains and drives Pete’s to try harder because it has a big stake in seeing the neighborhoods succeed, the sisters said.
“I remember being kids and driving home from grandma’s house and Jimmy saying, ‘That’s a good corner,’” Vanessa Dremonas said. “He always said, ‘They can print money all day every day but they cannot make more dirt.’”
Vanessa and Stephanie Dremonas said they were never pressured as kids to join the family business, but the door was open if they wished. They have discovered complementary skill sets — Stephanie is the big-picture innovator, Vanessa the detail-oriented executor.
Being female owners in a male-dominated field has, if anything, worked in their favor.
“The woman is the shopper,” Stephanie Dremonas said. “You have to know who your client is.”
The Chicago area is hypercompetitive for grocers, largely because it has a strong tradition of independent grocery stores that have catered to its diverse neighborhoods. The closure in 2013 of Dominick’s opened the door for independents, as well as larger chains like Jewel and Mariano’s, to take over the vacant stores and expand.
Pete’s has had to be nimble to stay ahead of the game, adding greater variety, vegan sections and things like cucumber water in response to what millennial shoppers seek. It aims to keep its prices within 10 to 15 percent of Walmart’s prices, offering good value given the quality of its selection, industry experts say.
What it does not do, the sisters say, is chase what its competitors are doing.
“The people in my building every day are telling me what they want to see and what they want us to build,” Stephanie Dremonas said of her customers. “That’s who you chase.”
Pete’s is meticulous about specifying its product selection for the neighborhood it is in and listening to its customers. In Oak Park, where it already has one store, it has a customer service concierge, a position it created for a chatty and helpful stocker, because the shoppers there like that kind of thing. In Pilsen, which used to have a Hispanic focus, it has introduced a greater variety of unusual fruits and vegetables because the hipsters moving into the neighborhood like to try adventurous meals.
In the newly opened Wheaton store, there is a white board in the office listing customer requests, collected by workers on the store floor who are given pads of paper to write down when they hear customers ask for something. Buyers work quickly to bring those items to store shelves.
“You get it 80 to 90 percent right when you open it and then the customer has to fill in the next 10 to 20 percent with what they want to see,” Stephanie Dremonas said.
To make sure Pete’s continues to live up to its core values even as it grows, the Dremonas family keeps a tight hold on its stores.
Pete’s does all of its building development, design and construction internally, and the owners decide everything from the types of tables in the office to the refrigerated cases in the store. Almost everyone who gets hired has an interview with an owner first.
The pride the Dremonas sisters feel about their business is clear as they give a tour of the bright, 72,000-square-foot Willowbrook store, located in a community with a diverse immigrant population. They point out the gelato stand, the case of fresh-squeezed juices, the seven different kinds of eggplant. There is an aged beef section, an entire halal department, a tower of multiple brands of Polish bottled water.
“Who has this much kombucha?” Stephanie Dremonas said with a laugh as she stopped in front of a display of dozens of kombucha varieties.
Shoppers can see skinned lambs hanging from their hind feet through a window into the kitchen, and management added a ribbon of frosted glass to hide their heads after some customers complained.
Located in a former Kmart building, the Willowbrook store has a dining area with Restoration Hardware fixtures, a bathroom with a marble sink basin and herringbone floors.
“You give people a nice environment to work in, it’s meaningful,” Stephanie Dremonas said. “You give them a dump to work in, they’ll treat it like a dump.”
The store recently showcased hams for Easter, baby lamb for Orthodox Easter, lamb shoulder for Ramadan and a kosher section for those celebrating Passover.
As it opens shiny new suburban stores, Pete’s continues to renovate its existing city locations to keep the quality uniform.
“They have upped their game,” said Fitzgerald, the former Mariano’s executive. “But they have not lost what got them to the dance.”