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although specialty grocer Fresh market has a minuscule market share in the retail-food industry, its strong performance makes it an attractive takeover target. More than one public company has shown interest in buying the chain. Fresh market founder and president Ray Berry says. Mr. Berry's 33-year-old son Brett became chief operating officer in January after running marketing for two years.

Fresh Market, Greensboro, N.C., has funded expansions through bank debt, and so far hasn't needed to offer shares to the public or to sell.

"If I can get what I think the company's worth three years from now, I'll sell it," says Mr. Berry, who doesn't plan to retire any time soon."But I won't sell it for what it's worth today because I'm having too much fun."

Mr. Berry, 60 years old, says the key to Fresh Market's financial performance is its commitment to service and quality.

The Berrys won't release details but say Fresh Market's profitability outpaces the industry. Sales totaled $193 million in 2000 and have grown 25% a year compounded since the first store opened in Greensboro in 1982. The chain has stores in Florida, Georgia, the Carolinas, Tennessee, Virginia and Kentucky.

Fresh Market's concept is this: Offer top-quality meats, produce, bakery, and specialty items and top-notch service in neighborhood stores near educated, high-income residents.

Fresh Market stores are an average of 18,400 square feet as compared with the 40,000 square-food average for Whole Foods Market Inc., one of Fresh market's closest competitors. Fresh Market's warm lights, classical background music and terra cotta-colored tiles are designed to be cozier than a typical grocery store. The Berrys say that atmosphere is largely thanks to the 75 employees at the average store. None of the meat and few of the deli products are prepackaged, and each department has at least one employee in the area constantly to help shoppers.

"We force an interaction between the customer and the employees," Ray Berry says.

As a percentage of sales, labor costs are nearly double that of large-format stores, he says. Stores have a minimum staffing level, and managers are discouraged from falling below it.

Ray Berry was 39 years old, overseeing 3,600 7-Eleven stores as vice president of Southland Corp. in 1980 when he quit amicably over a management disagreement he won't detail. After turning down several jobs, Mr. Berry, and his wife, Beverly, decided to invest everything into opening a grocery focused on quality and service. After selling their Dallas home, the couple packed two cars, two children and two dogs and traveled east to find the right town to launch their dream.

Mr. Berry chose the Southeast for the high returns on investment for grocers and the abundance of small store spaces being vacated by supermarkets moving to larger formats. He chose Greensboro based on a stranger's recommendation and a good site for the first store.

Raised in San Diego and having started out in food retailing as a teen, Mr. Berry borrowed ideas from stores he had seen all over the U.S. He also used his convenience-store experience to replicate the store format and shape the product lines.

The chain carries a bare lineup of most general-grocery products, but an expanded selection of products for cooks and entertainers, with 18 styles of designer napkins, six shelves of mustard.

Fresh Market also sells hard-to-get H&H bagels from New York City, Ferrara's NY. cheesecake, fresh Orsini parmesan cheese and Acquadella madonna bottled water.

Merchandisers at headquarters select the stores' products, but managers order directly from third-party distributors. Fresh Market doesn't have the concentration of stores that would make running its own warehouses profitable, Mr. Berry says. in addition, he believes some grocers' distribution operations have grown so big they drive the retail business, rather than the other way around.

"If I get bad strawberries ( from a distributor), I send them back, because I'm the customer," says Don Poplaski, manager of one of two Charlotte, N.C., stores.

Another important lesson Mr. Berry learned at Southland, he says, is growing only as fast as you can hire and train good people. Fresh Market typically opens one or two stores a year, depending mostly on personnel and the availability of good locations.

Updated: Thursday, September 6, 2007.