News for Downtowns searching for grocery stores

Another post to pro-urb:

There is an IGA (or at least it was, it probably has a different affiliation now) at 1st and K Sts. NW. It needs help. It's tired inside, but since it abuts one of the more dangerous housing projects in the city, it's never likely to attract clientele from middle- and upper-income demographics.

At the same time, the way the incentive laws are now in DC, new supermarkets automatically get incentives (you can't do TIF because groceries aren't taxed). So at 5th and L a new big Safeway is going in, with plenty of incentives. I don't knock that, after all, Safeway has been committed to the city for decades while other chains haven't been. But something is wrong about how this works--we need to provide support for extant stores to improve, and there isn't much focus on that. Furthermore, cities like DC need to go exhibit at the National Grocer Assn. meetings, not just ICSC.

Whole Foods on P Street NW, in Washingotn DC. Most people make this store out to be the second coming--I think it's good, but a real missed opportunity.

An IGA-Richfood affiliate opened on H Street in 1988. It failed, and trying to figure out why it failed began my education on these issues. First, while everyone complains about the area being understored, because people eat, in the interim they must come up with options. In effect, people already had grocery shopping habits and preferences out of necessity. SO to change your shopping patterns you have to be given a good reason. Wegman's (super high-end) or Shoppers Food Warehouse (discount) might be a good reason, a run-of-the-mill store might not be.

Second, I was surprised in conversations with my African-American neighbors to learn about perceptions of the store based on brand selection and product mix. In short, the limited selection in the store represented "disrespect of African-Americans as consumers, that they didn't have the money to buy upscale goods, etc." Now me, I was ecstatic to buy Richfood Raisin Bran for $2.99 or Oatmeal for $2.19, but other people wanted to spend more than $1 more for Kellogg's or Quaker Oats. And the owners of the store were African-American. (Eventually the store was sold to Koreans, and African-Americans picketed this, back in the days of peak anti-Asian sentiment in the inner-city etc., and the store spiraled into failure.)

Third, there were other factors militating against the success of the store. Despite the experience of the proprietors (they had worked for food distribution and wholesalers) they were undercapitalized, and the area then was bad, I mean bad... there was a belief that the impending reopening of Union Station would change the area, but it didn't, and while the real estate market then was almost comparable to now, in 1990, really 1989, the market tanked, and it didn't recover until about 1999, once Marion Barry was off the scene.

You can imagine the retail mix on H Street back then. Most of the major stores and the post office decamped to the relatively new Hechinger Mall (allegedly the Safeway there was once one of the leading stores of the chain, based on sales) so there were slim pickings on the corridor then.

Pittsburgh grocery store on a Sunday afternoon. (Logan Street between Hazel and Clark Streets.) April 1951. Photo by Richard Saunders. Photo courtesy of Carnegie Library of Pittsburgh, Pennsylvania Department.

(My colleague argues that the CDC owning the building didn't really want the store to succeed, although I don't think they are that sinister, although there are compelling points to the argument that I won't go into.)

Fourth, the store was sited perpindicularly to what had been the main shopping street. Granted it had parking in front of the store, but it was shoehorned in there, and having significant street frontage and transparency likely would have made a big difference. It was hidden, and given all the other negatives, this may have contributed to perceptions of lack of safety.

In short, for any proprietor, an independent, or a larger company able to bull through such problems, inner-city markets can be difficult.

From this come a couple recommendations, other than be decently capitalized and really really really know what you are doing, develop a solid concept, systems, etc.

(1) Don't fool yourself about siting and urban design, especially if you are not a big supermarket chain (which won't build unless it gets its 60,000 sf footprint anyway). Do it right. All the other negatives make success difficult. (Although for various reasons I think that if you do things right there are big profits to be made.) Failing to locate in the power area of the retail district, and siting away from a street orientation will make success hard.

(2) Despite the difficulties, it is extremely important to support the development of independent businesses. In fact, despite their limited interest in the city today, Giant's second store ever built was originally on the H Street corridor (because of its prominence as a middle-income shopping district "back in the day"--it was also the location of one of the earliest Sears Department Stores and for a time the largest Chevy dealer in the U.S.).

Just like there is the Mayor's Institute of City Design, maybe there needs to be an equivalent project for the development and attraction of smaller retail businesses in inner cities. E.g., how about developing a national project with the National Grocers Assn. (the association for independent supermarkets) or the hardware co-ops such as Ace or True Value, or the idea I have been bandying about for 5 years or so about an equivalent of Sears hardgoods stores for cities (tools, repair, appliances, etc.) since Sears has abandoned cities, but still have stores in the suburbs capable of providing delivery services.

An individual city government isn't likely to have the vision and scale to make this successful, but it could be done if cities band together. Instead, individual cities are providing support to the Home Depots, WalMarts, and large supermarket chains. And they are focusing energy on ICSC in Vegas and regionally, and no independent is likely to
be found at such meetings.

Prepared food station at Whole Foods flagship store in Austin Texas, photo: Austin American-Statesman.

The big chains do generate sales taxes, and some employment (a lot of the workers are suburban, but that does say something about the quality level of city schools) but increasingly these stores source little locally, including newspaper advertising, and profits are repatriated to Atlanta, Bentonville, and places like Oakland, California or the Netherlands...

Maybe this is something that Mr. Norquist would have some insight on.

(3) I think this argues for the value of vertical mixed use. (This is something I wrote in a blog entry in July--According to this article by John King of the SF Chronicle, A SOMA complex with a coffee shop and lively mural proves that affordable housing doesn't have to be ugly housing, this mixed-use affordable housing complex has a grocery store and a cafe on the ground floor--on the street. (Note: I still think they could open up to the street better. The grocery store that failed on H Street, part of the complex of buildings constructed by the H Street CDC, was perpendicular to the street, and this likely contributed to its lack of success.) Also see this story about the Harvest Urban Market, and this page from the architect's website about the SOMA project (great photos).)

Mixed primary uses has many benefits--more customers, more activity, more revenue streams for the building complex, etc.