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The challenges of operating grocery stores in America's densely populated inner cities, most of which consist of lower-income households, are no doubt enormous. Property cost and accessibility, labor issues, security, infrastructure -- the list goes on and on.
But for consumer-focused independents searching for growth opportunities, there appears to be no better place to take on those challenges than in the underserved "downtown" markets, and no better time than the present.
Seizing one such local expansion opportunity in the heart of downtown Seattle is The Myers Group, a family-owned enterprise that operates a small group of supermarkets as well as fuel stations and three hardware stores in the competitive Northwest.
Under the leadership of second-generation grocer Tyler Myers, v.p., and his team, the Clinton, Wash.-based company plans in the beginning of May to celebrate the opening of its third store to fly the IGA banner. Kress IGA, an 18,000-square-foot full-service market, will be located in the basement of the building that for over 50 years housed the S.H. Kress & Co. department store.
After the completion of a $2 million-plus renovation, which includes the installation of two escalators, the IGA supermarket promises to be a natural fit not only for the estimated 18,000 residents whose condos and apartments surround the facility, but also for the nearly 13,000 workers and other pedestrians who pass along the Third Avenue location each day.
"Our intent is to offer the residents of downtown Seattle a full-service supermarket experience," says Myers. "Customers at Kress IGA will find most of the same elements found in larger grocery stores, including a wide variety of grocery items; a full line of fresh produce, featuring both organic and conventional fruits and vegetables; high-quality meats and seafood; a floral department; a full-service deli; a bakery; and more."
Strategy for success
Myers says this won't be the typical downtown "corner deli that offers convenience grocery items. In fact, nearly 40 percent of the retail space will be devoted to prepared foods, including self-serve hot food tables, a made-to-order sandwich counter, a salad bar, and even a taqueria."
Interestingly, Myers notes that parking isn't likely to be a problem at Kress IGA -- because there is none. Instead, the store will expand its service area by offering home delivery upon request.
By now, you're no doubt wondering how a supermarket situated in a basement in downtown Seattle, with no parking lot, can expect to compete with nearby formidable units from Whole Foods, Safeway, and QFC.
Industry experts say that when competing in the inner cities, where, next to shelter, food is the consumer's greatest expense, what's most important for an independent is strategy.
That strategy must take into account logistics, work force development, community interaction, store security, and other variables. Its components should include:
--Joining forces with community development corporations, and expecting to operate a profitable business, not one that's subsidized. At the same time, the inner-city government must be focused on creating a favorable business environment.
--Concentrating on recruiting and training employees from among neighborhood residents.
--Getting actively involved with local business and civic organizations, and supporting area churches, schools, and civic groups. In essence, the business must recycle capital within its local inner-city community.
--Establishing consumer boards that provide guidance in allowing the store to best meet the wants and needs of local customers.
--Providing a shuttle service to and from the store, andor home delivery for those wishing to purchase more than they can physically carry to their homes.
--Offering nutrition education and information that could help foster health and wellness in the inner cities, where poverty is often prevalent.
Supporting Myers' strategy in downtown Seattle is its wholesaler, Minneapolis-based Supervalu, which with other IGA-licensed distribution centers, continues to express confidence in the leadership of IGA USA's c.e.o., Mark Batenic, and the direction he's taken the voluntary alliance in during his first year on the job.
For his part, Batenic credits Myers and others among IGA's nearly 1,200 U.S. retailers for the industry's enthusiasm toward the alliance.
"This supermarket demonstrates the diversity of the IGA brand, and our retailers' ability to identify and meet the needs of their individual communities," says Batenic of the Myers project.