Save-A-Lot finds its home in Sioux City

For two years, the store struggled as Select Food Market to draw in residents from the surrounding neighborhoods. The key concern among customers was they found the food unaffordable.

Co-owner Ahsan Alahi said that’s why he and business partner Raza Chaudhary decided to rebrand. The store, at 1730 Nebraska St., closed June 10 for remodeling and re-opened as a Save-A-Lot by the end of the same month.

Save-A-Lot, a subsidiary of supermarket giant Supervalu, is a discount chain. Select Food's current supplier is Minneapolis-based Nash Finch, the nation's second largest publicly traded wholesale food distributor.

Based in suburban St. Louis, Save-A-Lot has more than 1,250 U.S. stores, from Maine to California.

“Now we’re happy, the customers are happy – everyone is happy,” Alahi said. “We are doing real well now.”

Chaudhary and Ahsan Alahi are vice president and president, respectively, of Select Food. They also own and operate an independent chain of Select Mart convenience stores in Sioux City and Omaha.

Driving past the grocery store and taking a glance at the often-empty parking lot can be deceptive.

Chaudhary said many residents in the surrounding neighborhoods cannot afford a car, meaning they have to walk to get their groceries or to tend to daily chores.

“Sometimes I come in and I see no cars in the parking lot,” he said. “But then I come inside and the store is full of customers.”

The neighborhood supermarket had struggled since first opening as a Select Food Market in April 2011 in a former Fareway grocery store. Potential customers from the low-income neighborhood shied away because food prices failed to align with family budgets.

The neighborhood was also underserved, with no other affordable options within walking distance.

"The price we need for this neighborhood somehow hasn't been working, so we have to change," Chaudhary said while the transition was in progress. "I think people will be much happier after we reopen when they see all the savings they're going to have."

Save-A-Lot carries most grocery products but offers less variety than traditional supermarkets. To cut costs and pass savings on to the customers, items are displayed in their cardboard shipping boxes. Customers are asked to bag their own groceries and bring their own bags.

The city had provided Alahi and Chaudhary with $200,000 in federal stimulus funds to help buy the property and get the store up and running when it opened as Select Food Market.

Although the city does not normally invest in single retail developments, local leaders made an exception in that case because of the void left in the lower-income neighborhood after the Fareway store closed.

The city did not provide any additional financial assistance to the owners as they transitioned to the Save-A-Lot brand.

They invested about $350,000 to convert the 20,000-square-foot store to a Save-A-Lot. Work included a complete revamping of the shelving and area displays.

The store kept its employees during the transition.

The new investment is on top of the roughly $2 million that was used to extensively renovate the former Fareway and install new shelving, coolers and freezers.

Alahi said the work has paid off.

“The customers love the prices,” he said. “Business is so much better now.”