DC grocers have a ways to go to get urban...

In Salt Lake City, as part of the massive City Creek mixed use district development (which includes the only new shopping mall built in the past few years, because of the financial commitment of the Mormon Church), the regional supermarket chain Harmon's, joined in, with an urban-appropriate (for the most part) store serving the Downtown section of Salt Lake City (there's also a Whole Foods a few blocks away in the Trolley Square area).

I wrote a few weeks ago about the opening of the new Giant Supermarket on the 300 block of H Street NE, and how it is the culmination of a 13-year process that started with residents coming together from both sides of H Street (then, the north side was black mostly and the south side of H Street was more mixed, but heavily white) to ward off the expansion of one of the biggest nuisance properties in the neighborhood--an Amoco gas station.

For Giant, the supermarket is a step forward with more higher grade finishings and polished concrete floors. But at the end of the day, it's still a Giant, with its appreciated focus on value pricing, but this comes at the expense of carrying a broader array of products.

The parking is on top of the store and its two stories. Concrete polished floors, softer lighting, great graphic treatments, etc.

There is a heavy emphasis on fresh departments and chef-prepared foods. It's the only standard grocery store I've seen that uses "Metro" wire shelving for the entire store, black racks a bit taller than the typical supermarket layout.

And unlike the Giant, it has a pretty good array and range of items, including my favorite Edy's (it's Dreyers out west) Cappuccino Chip frozen yogurt that now neither Giant (they went through what is called an SKU rationalization and reduced the array of different items carried per brand in many categories) nor Safeway carries.

They also provide space right next to the store for a station in Salt Lake City's new bike sharing program, called GREENBike.

Somehow I missed the story, "Vertical Leap," from Progressive Grocer Magazine about the Harmon's store. I was struck by this part of the article:

"In our traditional stores, you have huge retailer parking because we usually have 400 stalls out in a parking lot," says Frank Lundquist, Harmons' VP of store development. "Downtown, there is a lot of pedestrian traffic. We did a lot of research on urban stores to develop ideas for this one. We visited grocers in cities like New York, Chicago and San Francisco. Also, a few months ago, we opened a smaller store – 10,000 square feet – and that gave us a lot of experience that would help us in working on this store. Most of our stores are 70,000 square feet. We realized that you can do more with less, and so it helped us in a lot of ways as far as how we merchandise."

And through a combination of creative floor layout as well as some new fixtures, Harmons is able to do a lot more with reduced space. The grocer worked with Cedar City, Utah-based Decorworx, which has designed its past few stores, to create a look and feel for the store that would maintain the Harmons brand while fitting into the area of City Creek.

They actually went out and researched other markets and stores.  It's sad that such an approach feels novel.

I don't feel like that's happened in the DC market at all, although you could argue that the entry of Harris-Teeter, based in North Carolina, has upped the game a bit, because they have a format with a more upscale feel and a bigger emphasis on prepared foods--at a real estate conference, the H-T store at 1st and M Streets NE, was discussed because at lunch time, many office workers go there and buy lunch, and the store has inside and outdoor seating--that it's changing.

The Harmon's store is significantly ahead of comparable Giant and Safeway stores in the DC market, even if the new format Safeway stores are significantly significantly improved.   The ground floor of the store is traditional supermarket, but seriously upgraded, and the mezzanine floor is focused on eat-in and take out prepared foods.

The cafe and grab and go area, which also includes a post office, kitchenware section, and demonstration/teaching kitchen which offers cooking classes and special events are well advanced too, beyond most of what Whole Foods does (although they could use a couple of tweaks even so).  The coffee they serve is way better than Whole Foods.  

But I haven't been to a Wegman's, which is the gold standard for this.  They are integrating pubs and restaurants into some of their sites, and they have huge eat-in sections.  Then again, Wegman stores are huge, 100,000 s.f., and not sited in urban locations at all, at least not yet.  They are decidedly suburban locations, but with a more urban lifestyle sensibility.

This is extremely important as I mentioned in the previous entry updating Richard's Rules for Restaurant-Driven Revitalization, because since fewer people know how to cook, especially when they are younger, supermarkets are boxed out of selling them food, unless they go ahead and prepare it.  See "Supermarket customers are hot for takeout" from the Washington Post.

The photo card reader in my computer isn't working, so I can't easily upload photos right now, but I was definitely impressed.  Fortunately, Harmon's has a Flickr slide show from the store's opening day.


Note that I've come across some articles which state that Kroger, the nation's largest supermarket company, with stores and banners (divisions) in many markets across the U.S., although they are not active on the Mid-Atlantic coast--the closest they are to the DC metropolitan area is in West Virginia and the Richmond, Virginia market--is actively researching new formats for urban settings. See "Kroger working on multiple ideas for urban, downtown stores" from the Cincinnati Business Courier.

That could shake up the sector some too.  While there has been speculation that Royal Ahold, the parent company of Giant Supermarkets, could buy Harris-Teeter, sinc ethey are exploring selling, it's extremely unlikely as that supermarket chain's "DNA" is significantly different from the middle-of-the-road approach taken by the company's US divisions.

It wouldn't be out of the question for Kroger, although it has also been suggested that private equity firms like Cerberus, which recently purchased various divisions of Supervalu and also invested in Supervalu (which owns Shoppers Food Warehouse in the DC region and Farm Fresh in Southern Virginia), would be interested as well.

The PG article goes on:

While the space is slightly smaller than typical Harmons stores, no departments were sacrificed, says Lundquist. "Some of them are smaller, but everything was just done more space-efficient here," he says. "We prepare everything in the store; there is no commissary on-site. We're a certified-organic store, so we have a lot of organic products; we have dry-aged beef, service meat departments with traditional meat cutters, seafood, an artisan bakery, full-service bakery, wood-burning pizza oven. There are also a full-service floral department, cheese island, and deli with Boar's Head meats and cheeses, and a lot of specialty items."

To save space in the grocery department and give it a unique look, Harmons uses a combination of shelving from Wilkes-Barre, Pa.-based Metro and hand-painted aisle signs. "The Metro shelving allows us to go closer to the floor, as well as add two shelves for every three or four feet of shelf space," says Lundquist. "This lets you reduce the footprint of grocery while maintaining the number of facings. Plus, the wire racks of the Metro shelves have a very unique look that sets this grocery department apart from those that use traditional shelves."

It's definitely noticeable and interesting.  I could see more companies picking this idea up, as it allows them to carry more products in a smaller space.  Which is in line with how retail companies have been rightsizing space since the real estate crash and the implosion of retail sales.