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Retailer finds niche in big-box dominated market

Business strategy allows hardware store to compete

Posted: Thursday, March 01, 2001

Paul Miller attributes the success of Trustworthy Hardware to three things -- aggressive advertising, low prices and a knowledgeable, friendly staff.

Miller, who has been in the retail business for 41 years, bought the Soldotna store from Clay Ellington in 1986. Before buying the store, Miller had transferred to Soldotna from Anchorage in 1983 to manage the then-new Kenai Peninsula Pay 'n' Save.

Miller said business ran smoothly until Big Kmart and Fred Meyer came to the area.

"When Fred Meyer came in, we thought the sky had fallen," he said.

He said the store never lost any sales, but its net profit was not what it should have been after the big box stores moved in.

"Gradually, it has gotten back to the way it used to be," he said, attributing the increase to the aggressive advertising campaign the business maintains.

"We believe in advertising, always," he said, adding that he does not advertise an item unless the item is in the store at the time of publication.

Aside from advertising, Miller said, pricing is important when competing with the bigger stores.

Miller uses a shopping service that prices items in most large stores.

The service helps Miller know what stores such as Home Depot, Wal-Mart, Fred Meyer and Big Kmart charge.

Of the 15,000 items in his store, he estimated about 400 are sold at or below cost to make sure his prices are competitive to stores on the peninsula and in Anchorage.

"People go to Anchorage, so we have to keep up with (those stores)," he said. "The things you can't get in the big stores, people can get here."

The last secret to success, Miller said, is the importance of his employees. Miller said he currently employs 16 people, but that number varies over the course of a year.

The average Soldotna Trustworthy Hardware employee works for Miller for about eight years, he said. Miller is able to keep employees working throughout the year while also offering them a profit-sharing plan, a 401K plan and health insurance.

"We try to take care of our people, that is important. They are as much responsible for the store as I am, and they really contribute to the success of the store," Miller said.

"Our people know our products and how to use them," he said.

While many stores are expanding to other areas, Miller said that thought is not in his immediate future. The are four other independently owned Trustworthy stores in Alaska, and more than 4,000 in the nation.

"We don't want to get really big," he said.

But retirement is in Miller's big picture. He said in a few years he will let the store managers, both being his sons, Brian and Scott, take over the business.

"I hope that their kids will take over some day," he said.

The advice he bestowed to his sons, which he said holds true today and always, is as long as you work hard, you'll make a good living.

"They will do well," he said.

But while he is still in the driver's seat, he said he appreciates the support the community has shown him over the years.

"People who shop here are just like old friends," he said.

So while many may wonder how a small business can survive in the shadow of larger outlets, Miller said it can and has been done.

"You just have to stay the course."



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