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THRILL OF THE GRILL

Australia’s Barbeques Galore takes the high-tech kitchen outdoors

BY DEBRA HAZEL

Americans’ love of the grill combined with their enthusiasm for fancy kitchens is providing some, well, sizzling prospects for Barbeques Galore.

Selling all items barbecue, from Pam vegetable oil spray to cooking islands running into the five figures, the Australian outdoor-cookware chain will soon have as many stores in the United States as it does back home, thanks to a trend toward backyard entertaining.

“Creating an outdoor room is more and more of a U.S. phenomenon,” said Michael Lindblad, CEO of the company’s U.S. division. “A few years ago people were trying to create home theaters; [now] people are expanding their living space.”

And more and more of them are grilling year-round, Lindblad says. Fourth of July barbecues are becoming a nightly tradition, particularly as people entertain more at home. About 14.5 million barbecues were sold in the United States last year, according to the Arlington, Va.-based Hearth, Patio & Barbecue Association, and that number is expected to top 15 million this year (up from just over 11 million 10 years ago). That will amount to 2005 sales of about $3 billion on grills, equipment and related accessories, the association says.

“The great outdoors is a great pastime in America,” said Kurt Barnard, editor of Barnard’s Retail Report. “The outdoors is almost synonymous with America.”

But leisure is not the only reason for buying expensive grilling equipment. Americans continue to focus on their homes as both a haven and an investment, and they are expected to spend some $200 billion or more on remodeling and renovation this year, about a third of that going to outdoor amenities, according to the association. The trend has been building since the mid-1990s, says Donna Myers, an association spokeswoman.

“With two working adults in almost every family, we’re too tuckered out to go out,” Myers said. “If you do entertain outdoors in the summer, it’s more casual. And you can invite the kids.”

Consequently, grilling systems are a lot more elaborate these days, in effect creating an outdoor kitchen. Prices can range from a few dollars for cooking oil to more than $20,000 for an equipped island, including grill, warming drawer and refrigerator.

Barbeques Galore offers a one-stop shopping experience for all this equipment in a market that until now has been fragmented among supermarkets, discounters, home improvement stores, consumer electronics chains and mom-and-pop stores.

“We have a unique concept,” said Lindblad. “There really aren’t any specialty barbecue stores out there. There really isn’t anybody who has taken the specialty store niche.”

At Barbeques Galore, shoppers find 6,500 square feet of grills, patio furniture, islands, cookbooks, marinades, fireplaces, dinnerware and even pre-marinated frozen meat, all at a variety of price points. Elaborate islands equipped with the latest grilling and refrigerator equipment greet the customer upon entering. Smaller grills run along the sides of the store, and grocery items (including spice rubs, marinades and cooking oil) are on shelves at the back. Fireplaces, which can be customized, and their accessories also are located toward the back.

Barbeques Galore prides itself on working with the customer to create the right grilling situation for his or her needs and then helps set up the equipment — a service it says is not provided by the discounters and home improvement chains. Such hand-holding is essential when dealing with such top-of-the-line items as $5,000 Viking grills.

“That’s an investment,” Lindblad said. “You want someone to explain it to you.” That is the kind of help Richard Pinsky needed, when the Norwalk, Conn., chiropractor purchased a fully equipped island for his home. “It’s all-inclusive,” Pinsky said. “I don’t need a contractor [to design and install the equipment].”

That approach derives from nearly three decades of experience on two continents. Barbeques Galore was founded in 1977 in Sydney, Australia. The company set its expansion sights on the U.S. as the home of the barbecue. The chain opened its first U.S. store in 1980 in California and expanded quite slowly. “There were much bigger opportunities in the United States,” said Lindblad.

“We enjoy the outdoors,” said Richard E. Hearn, director of leasing at Vestar Development Co., a Phoenix-based retail development firm with power, entertainment, lifestyle and neighborhood centers in Arizona and California. Barbeque’s Galore has a 5,000-square-foot unit at Vestar’s Desert Ridge Marketplace, in Phoenix. “And in the West, weather is not a factor. We use the yard as an extension of the house.”

Following a management change, the company expanded in California during the late 1980s, then on through to Arizona, Nevada and Texas in the early 1990s, before coming to the Washington, D.C., area during the late 1990s. Also during the 1990s, Barbeques Galore began manufacturing its own private-label grills, which allowed it to control product development and supply. It added such items as fireplaces and their related accessories to the mix. Shoppers can also buy tableware and small tables to help create a complete “outdoor room” environment.

The Norwalk store is Barbeques Galore’s first in the Northeast, says Christopher Maly, manager of the store and a former corporate buyer. The company is not put off by New England’s severe winter climate.

“I grill all year-round,” said Pinsky.

He is not alone. About 60 percent of all barbecuers cook outdoors year-round, says the association. “They’re not put off by the weather,” Myers said. “They put on the parka and turn on the grill.”

And if the parka does not suffice, the store sells patio heaters.

There is plenty of other stuff in the store to keep customers coming back after they have made their initial equipment purchase. The chain has benefited from the surge in second-home purchases, too.

Total sales — U.S. and Australia combined — for the fiscal year ended Jan. 31 were $212 million, up 6.9 percent from the previous year. Comparable-store sales in the U.S. rose 6.3 percent, which more than compensates for a 2.8 percent decline in Australian comp-store sales over the period. Plans call for Barbeques Galore to open between eight and 12 stores annually for the foreseeable future; the chain has identified somewhere between 120 and 180 possible sites around the country.

“I think there is a future for that kind of a store, but not for many of that kind,” Barnard said. The first in a market, he says, should do well.

Power centers are particularly appealing to Barbeques Galore, and the stores do quite well in centers with a Home Depot, a Lowe’s or a Pier 1, says Lindblad. “They’re a great complement to the furnishings component of any shopping center,” said Hearn.

The stores are getting larger. Going forward they will be in the 6,000-square-foot range, allowing for an increase in the company’s displays of its islands.

“We are selling a wider range of product,” said Benjamin Ramsey, executive vice president of operations in the U.S.

The units can be built out in 10 weeks after permitting, said Carol Groppell, Barbeques Galore’s director of construction. The stores are designed to evoke the outdoors, using 36-inch-by-36-inch floor tile, for instance. The company is as happy to go into an existing store space vacated by another chain as to build new units from scratch. “There is flexibility, depending on the layout of the building,” Groppell said.

For now, the Northeast is the main focus for expansion. The chain has hired site-selection consultants to match its target shopper: individuals with average household income of about $75,000 a year. Plans call for stores in Scarsdale, N.Y., and Paramus and Princeton, N.J.

And this could be just the beginning.

“There are a lot more avid grillers than people realize,” Maly said. “They are always going to be there.”

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