Sunset Foods makes big investment in Libertyville

Bursts from power tools pepper the conversation, but John Cortesi is unfazed by what he considers the sounds of progress.

"We're going to really improve and enhance the shopping experience here," says Cortesi, president and CEO of Sunset Foods, a 76-year-old family-owned chain of groceries with five locations. This one has anchored the Butterfield Square shopping center on Libertyville's northwest side since 1998.

Seated at a table in the grill area, just steps from where a small bar that will serve craft beer, boutique wine and appetizers is taking shape, Cortesi highlights various aspects of the most extensive store renovation at this location since it opened.

"It's due," he says.

The improvements will include a full-service floral section with trained designers, revamped liquor department with a separate entrance, outdoor seating for 75 beneath a cedar trellis, expanded offerings for a variety of foods, and prototype elements, such as the beer and wine bar, and "build a burger" feature.

"We're trying to improve the experience in all our locations," Cortesi said. "We want our store to be a place for people to meet their friends, have dinner, an appetizer."

The estimated $1 million renovation in Libertyville could serve as a template for future improvements at the other Sunset locations. There is no specific plan or schedule set, although the Northbrook location is being evaluated, he said.

Periodic changes are part of any business model. However, the landscape in Libertyville would appear to warrant some urgency, given the pending arrival of Trader Joe's on the south end of town and the continued success of Mariano's Fresh Market across the street from that site in Vernon Hills.

"Most supermarkets find they need to refresh their stores about every seven years. The degree of the refresh often depends on the competitive environment," said Jon Hauptman, a partner with Willard Bishop Ltd., an industry analyst firm in Barrington.

Planning and approvals for the Libertyville store, as well as for the landscaping and signage of the shopping center, were in progress well before the Trader Joe's announcement last February.

"Improvements are necessary to compete in today's marketplace," Cortesi said without directly addressing the competition, which also includes a Jewel-Osco store. He described Sunset as a "very niched" business noted for its high-end service, such as online shopping with curbside pickup and quality products.

Sunset shoppers can expect several changes as part of a three-month program scheduled to be completed by mid-August. The 52,000-square-foot store will remain open during the renovation.

The Liberty Tap craft beer and wine bar will complement the grill area on the west side of the store, according to Cortesi, and changes involving food display, service and offerings are coming.

"We see a lot of growth in the perishable (food) side of our business," he said. "People are looking for gathering places."

Build your own cold sandwiches, a gourmet burger bar, a Graeter's ice cream shop, 12-kettle hot and cold soup self-service bar, and a custom cheese cutting station manned by a full-time cheese monger are among the additions.

"It's, I think, a big deal for Libertyville, if not unexpected," Hauptman said. "Looking at it from an industry perspective, we see a lot of retailers doing what Sunset is doing."

The reason is clear, he added.

"If they don't do it, there are too many options for shoppers in an around Libertyville," Hauptman said.

One of them will be the California-based chain Trader Joe's, which is known for its eclectic atmosphere and varied selection of store brands and inexpensive wines. It is being built as part of a two-building retail development on the site of the former Frank's Nursery & Crafts, 1600 S. Milwaukee Ave. The construction value of the shell of the building and interior work for Trader Joe's is estimated at about $1.8 million.

The Libertyville location would be the second in Lake County, following Lake Zurich. There is no official date, but the company is on target to open this year, according to Alison Mochizuki, director of public relations. At 12,500 square feet, the Libertyville store is less than a quarter the size of Sunset.

"We consider ourselves a neighborhood grocery store," she said.

The big gun has been Mariano's, which twice has expanded parking since it opened two years ago because of continued demand.

"They are a major competitor in this market now for any traditional grocery store that exists," said John Kalmar, Vernon Hills' assistant village manager and point man for development. For example, the demise of the nearby Dominick's store, which closed in April 2012, was thought to have been hastened by the arrival of the 70,000-square-foot Mariano's.

"Trader Joe's has its niche, but we feel Mariano's will serve a larger population better. Plain and simple," Kalmar added.

And what of the Jewel store, about half a mile north on Milwaukee Avenue, that was purchased this past January?

"A refreshed Sunset and a Trader Joe's will pull sales from somebody and typically those sales get pulled from the most vulnerable retailer in the market, and on the surface it looks like Jewel," Hauptman said.