Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Sunday, January 17, 2016

LOL: Walmart closing stores, announces it won't move forward with two stores in lower income areas of DC

More than five years ago, Walmart announced plans to open five stores in DC (Georgia Avenue NW, Riggs Road NE, East Capitol Street NE, New Jersey Avenue NW, and New York Avenue NE).

This was heralded by urbanists as an indication that retail chains were now committed to center cities.

The announcement was when DC's real estate market outside of Metrorail station catchment areas was in the doldrums, and many real estate development projects had been cancelled, and the city's elected officials were desperate for a win and jobs suitable for less educated people.

Demonstration at Union Station, Washington, DC.

There was a lot of opposition to the company's entry, although for the most part, the city's elected officials smoothed the course and put up no opposition.  I got involved in the issue on the margins, because one of the stores proposed (now open) is about three-quarters of a mile from where I live.

I co-chaired a committee of our local Advisory Neighborhood Commission addressing that particular project, and we produced a great set of recommendations on mitigating the potential negatives from the project, which the city categorically ignored, because for the most part the city's elected officials made it clear to the Office of Planning and Department of Transportation that their job was to facilitate Walmart's entry, not to put up roadblocks.

-- ANC4B Large Tract Review Report on Walmart, 5/2011
-- ANC4B Large Tract Review Report on Walmart, Summary Recommendations
-- "Temper Walmart Glee with Planning," Washington Business Journal

Substantive issues during the process concerning the effect of the stores on local business and the company's employment practices were lost in the general noise associated with the company's entry. That noise is something that Walmart relies on facilitate their entry into new locations with minimal cost.

Also veiled threats in other cities (for example, in San Diego, the company helped to bring about a referendum overturning legislation imposing special requirements on big box stores like Walmart) puts cities on notice that they can't be too demanding.

Lessons.  My summary of lessons from Walmart's foray into DC are topic of many past blog entries:

-- Lessons from Walmart's foray into Washington, DC
-- Piling on City Council for Walmart
-- I hope for Aspen Hills' sake that Montgomery County is smart enough to learn from DC's planning errors with regard to Walmart's entry
-- Urban bets on Walmart are probably a losing wager
-- The reason why Walmart is committed to a store that is part of a mixed use development
--6Ps, Walmart in DC and "I hate to say I told you so"

The two most important lessons are:

(1) Walmart makes business decisions, not decisions based on sentiment

(2) there is a difference between locating a store in the center city and creating an urban-appropriate big box store.  WRT the latter, Walmart is willing to locate in cities, but they are agnostic on the urban form of the store.  If the site is in a location they want that's the most important.  They won't exert any pressure on a developer to build "urban" vs. a store that's in the city but single use.

the new mixed use building, including a Walmart, at 1st and New Jersey Avenue NWWalmart is in this development at New Jersey Avenue and H Street NW.

Two of the stores already built in Washington, DC are what we would call "urban", that is part of vertical mixed use projects, incorporating either commercial or residential along with retail at Fort Totten (residential above) and on New Jersey Avenue NW (commercial).

 By contrast, the store on Georgia Avenue is single use--the site had been approved for a mixed use development with 400+ apartments, but the developer wasn't interested in jumping hoops to come up with the construction financing.  By contrast, Walmart brings their own financing.

Georgia Avenue Walmart
Georgia Avenue Walmart, Flickr photo by BeyondDC.

Once upon a time: plans for a sixth store to anchor DC's Skyland Center.  During the process, in what I thought was more theater than reality, the then Mayor, Vince Gray, "conditioned his approval" (note that most of the stores and the ones that opened were all "matter of right" and for the most part did not require any substantive special approvals by city agencies) on the company agreeing to open a sixth store at Skyland Shopping Center, a redevelopment project in Ward 7 that the city had been working on for more than ten years, with minimal success.

... not to mention that in most zoning and building approval matters, DC law does not provide a way for a Mayor to either approve or disapprove a project.

I think the company had agreed to the store already, as part of the "dance" between the city and Walmart, but the "theater" allowed the city/the Mayor to demonstrate to citizens that they "exerted pressure on Walmart to do more for the city than they originally intended.

After I finished the report (I was the primary author but by no means are all the proposals and recommendations expressed therein mine), and it was submitted I realized I screwed up in not highlighting the company's low customer satisfaction ratings (Wal-Mart - The American Customer Satisfaction Index) and that at least then, the company was in a sales free fall, having registered sales declines quarter after quarter since the onset of the recession.

In other words, should the city have been making such a big bet on a company in decline?

In 2016, Walmart pulls back on its "commitment" to DC.  Friday, the answer came back definitively, as in advance ("Wal-Mart nixes stores at Skyland, Capitol Gateway," Washington Business Journal) of the company's national announcement of store closings across the country and the shuttering of the Walmart Express small store initiative, Walmart announced that the stores planned for East Capitol Street NE and Skyland Shopping Center were cancelled.

Skyland Shopping Center - DC
Skyland Center was oriented to the low income demographic.  The city spent many years acquiring the separately owned properties which collectively made up the shopping center and tore them down, in a quest "to upgrade" it.  The center had a Safeway, CVS, and an auto parts retailer, among major retail chains. Photographer unknown.

From the WBJ article:
Wal-Mart has canceled long-standing plans to build two stores in D.C., raising doubt about the future of Skyland Town Center, the massive project in Ward 7 a decade in the making. The news came Friday morning as part of an announcement that the world's largest retailer would close 269 stores worldwide, including 154 in the United States. Prior to releasing its full list of store closings (none in Maryland or Virginia), Wal-Mart said it will pull out of the Skyland and Capitol Gateway projects in Southeast and Northeast D.C., respectively.
Walmart had already cancelled a fourth store that was planned for New York Avenue NE in Ward 5. But that shopping center, which was also supposed to be anchored by a Lowes store, and would compete with the nearby South Dakota Crossing center, anchored by a Costco, didn't go forward--Lowes shifted their own plans and just opened up a new store there.

The lesson there was that there wasn't enough demand to support two large shopping centers within close proximity to each other--less than two miles apart.

Two of the three stores the company has opened are in the Northwest quadrant of DC--the highest income section of the city, but all the stores are in middle income, not low income, areas.

Note that Walmart isn't exactly shrinking, but they do have weaknesses.  Even though they are closing 154 stores, the company will still open new Supercenters and Neighborhood Markets in the US this year and going forward, so their store count won't change much.

Out of stocks at a Walmart in California.  Photo from Yelp.

But it does communicate that the firm isn't all-knowing or impregnable or a superb operator.

For the last few years, Walmart has gotten a lot of attention for inventory problems and poorly maintained stores ("Is Walmart Really Fixing Its Out Of Stock Problems?," Forbes).

And in the meantime, the competitors that remain are stronger.  For example, after decades of competition with supermarkets, while many companies went out of business because of Walmart's perception as the low cost seller and the company's strong capital position and nonunion wage structure, for the most part, grocery stores surviving today have found their competitive position vis-a-vis the company, and some companies, like the supermarket chain WinCo and the deep discount grocery Aldi, even undercut Walmart pricing significantly while providing superior service (yes, even Aldi provides better customer service than Walmart).

Walmart isn't the only company closing stores.  Many of the big retailers are slimming down their portfolio of stores, in response to lower sales.  Macys is closing stores.  Kohls is looking at its options.  Other companies are closing stores too.

While there are advantages to physical stores, there is no question that shopping patterns have changed in part in response to Internet and mobile commerce taking an increasing proportion of sales in certain retail categories, as well as lingering impacts from the recession, which have changed consumption patterns--people are buying less, and the lower income segments of the population which Walmart has relied upon to drive store sales continue to languish in the face of limited job opportunities for the less skilled.

DC elected officials are "upset" at the news.  According to the WBJ article, both Ward 7 Councilmember Yvette Alexander and Mayor Bowser are miffed about the decision:
“I am angry and I take this personally as I advocated to bring them to Ward 7. The District had a deal with Walmart to bring in five stores with two coming to Ward 7. They signed leases and now they have broken their deal,” said Councilmember Yvette Alexander, D-Ward 7, in a statement. “This has racial and social-economic discrimination implications. This is a major setback but I am confident that the District will do everything possible to move forward with the projects.” D.C. Mayor Muriel Bowser said she's "blood mad" about Wal-Mart's decision, according to NBC4.
Also see "District leaders furious Walmart breaking promise to build stores in poor neighborhoods," Washington Post.

I was always skeptical that the city had enough population to support six Walmart stores. Typically each store draws on hundreds of thousands of residents, and DC has fewer than 700,000 residents, enough to support two or three Walmart stores. 

For a long time there hasn't been a substantive reason for suburban residents (5.3 million people) to shop in the center city, as they have plenty of shopping options closer to home, including a much greater variety of choices when it comes to big box shopping options.

The problem with these two projects--East Capitol Gateway and Skyland--is that there isn't much market demand for them, and residents in those areas have other options already.  That's why it has taken 15 years or more to move those projects forward.  (That doesn't mean that it is bad to foster such developments or direct city monies to them.  But at the same time, stakeholders have to be realistic.  These projects are hard to develop for a reason.)

For example, within one mile of Skyland are two shopping centers, once anchored by a Giant supermarket, the other by a Safeway.  I don't believe there is enough market demand in that area to support those centers plus a Walmart.  The same goes for the once proposed center on East Capitol Street NE, which is on the border with Prince George's County, and was presumed to be able to draw customers from Maryland.

At the end of the day, elected officials often forget that these are decisions about business, and while it's easy to jump on a bandwagon, such as the Walmart bandwagon, their foremost responsibility is to protect the city's interests, and to work for the best possible outcome at all times.

A longshot alternative: the Kroger Marketplace concept.  The problem for cities in the 21st Century is that there aren't many alternatives to the broadline discount store--with combined sale of food, apparel, furniture, housewares, and electronics.  Independent  or regionally-centered companies (e.g., Mervyns in California and other Western states) in this category have mostly gone out of business (as have department stores outside of national chains, with a few exceptions).

Where there are plenty of supermarket options at the regional scale, where center cities tend to have major gaps in their retail choices concern apparel especially as well as furniture and electronics--although the latter category is increasingly shifting to online sales channels.

Walmart and Target are the only national discount department store companies present in virtually every market.  Kohls is an apparel focused store that serves similar customer segments and operates with a national footprint.  And of course, there are many other companies in various categories, which may or may not be investing in city locations.

Regionally, there are two companies that operate similar broadline formats, Fred Meyer in the Pacific Northwest, and Meijer, based in Michigan and active in the Midwest.  Fred Meyer is now owned by Kroger, the nation's largest supermarket company.

The Kroger "Marketplace" concept.  Separately from Fred Meyer, a company in Arizona, Smitty's, developed a similar format (note actually that many supermarket companies experimented with such formats in the early 1960s, with the advent of Kmart and other discount formats).

Eventually, this company ended up in the Fred Meyer portfolio, and then in Kroger's when the company purchased Fred Meyer, although now they are branded as Fry's Marketplace (and this particular firm is separate from the Fry's Electronics chain).

Kroger has many divisions, most aren't named Kroger, for example Harris-Teeter in the Southeast, Smith's in Utah, or Ralph's in California.  But other than Fred Meyer multilines store format, the company is focused almost exclusively on groceries (and convenience stores).

(HEB, the Texas supermarket company, has done the same thing, using the banner HEB Plus!  See "H-E-B to spend $14M on first DFW Plus! store in Burleson," Dallas Business Journal.)

Since the acquisition, Kroger has introduced the "supercenter" or "marketplace" format as a store type in many of their divisions.  While modelled on Smitty's, it also incorporates expertise from the Fred Meyer division.

But fewer than 100 of the company's more than 2,600 stores are "Marketplace" stores.  From the Northwest Valley Newspapers story "Fry's Marketplace coming to north Peoria":
Larger than the basic Fry’s Food and Drug store, the Marketplace is one of the company’s signature store models. It typically offers full-service grocery, pharmacy, and health and beauty care departments, as well as fresh-food products, and general merchandise including [apparel], outdoor living products, electronics, home goods and toys.
A Smith's Marketplace in Los Alamos, New Mexico.  Photo: Los Alamos Daily Post.

For about two years, in the DC market, Kroger has owned Harris Teeter, a supermarket focused on selling to higher income market segments as their pricing tends to be higher than both Safeway and Giant, with a broader array of prepared foods and specialty items.

So far, Kroger hasn't introduced the Marketplace store format to the Harris Teeter division, and in any case, were they to do so, likely they would do it in higher income areas, not areas with the kinds of demographics present in the area of the stores just cancelled by Walmart in Ward 7.

Marketplace as a potential independent format for center cities.  DC could approach Kroger/Harris Teeter about creating such stores in those locations, perhaps using a brand different from Harris Teeter.  But the store's positioning doesn't really fit Ward 7 demographics or the demographics in lower income locations.

Footwear section in a Kroger Marketplace store in Ohio.

Kroger could develop this format as an independent store option, with a wholly new name, appropriate for other urban markets besides DC.

For example, the company just acquired Mariano's based in Chicago.  Walmart has opened a number of stores in Chicago.  But while Mariano's is an upscale supermarket, the company could use Mariano's footprint to support a Marketplace offering not branded as part of Mariano's.

This would be a way for cities to expand their retail offerings without having to be dependent on Walmart (or Target).

Note that in Colorado and some adjoining states, Kroger does have a division operating under the City Market name.  They could use a derivative of that name, CityMarketPlace, for a center city focused marketplace approach outside of the current footprint for the Colorado-based City Market chain.

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18 Comments:

At 2:50 PM, Anonymous Alex B. said...


In other words, should the city have been making such a big bet on a company in decline?


What bet? Making a "big bet" implies putting something at risk; yet the city didn't put anything at risk.

 
At 4:39 PM, Anonymous Anonymous said...

Not surprising. Just adding that I live outside the metro area where Walmarts are ubiquitous. Food Lion stepped up its game in the face of W, and I've been consistently satisfied to shop at FL. Not fancy, but they've got the basics + enough selection to cover the bases, checkouts are plentiful and staffed. You can actually shop on a Saturday afternoon and the store is not trashed and lines' aren't 6-deep into the aisles. Try that anywhere is the DC metro area....

Aside from quality, inventory, etc., part of W's problem is they have just gotten so big and unwieldy. I like a "one-stop shop" to get groceries and non-food things, but to go there is just such a physical hassle, then on top of the other problems it's just a degrading and maddening experience. Even if they are cheap (and they aren't always) the inconvenience factor often isn't worth it.

 
At 6:02 PM, Blogger Richard Layman said...

at Capitol Gateway and Skyland "the city" is at risk. Both projects are underway. Now they don't have an anchor retailer. It is unlikely they can attract "as attractive" an anchor retailer as Walmart to the location, making it difficult to attract other retailers, and putting their revenue stream and therefore financing at risk.

The WBJ article suggested that without Walmart it was not likely that Skyland would move forward.

Likely Walmart is on the hook for some cancellation fees, but probably not enough to save the projects, or to provide enough financial breathing room.

 
At 6:06 PM, Blogger Richard Layman said...

My position on WM originally was that while I am not inclined to shop there, I don't feel a compulsion to prevent other people from doing so.

I have gone in and bought stuff, not much, a few times. Mostly I haven't been impressed (but this is only the Georgia Ave. store). The checkouts are wacked. The store is messy. And frankly, if you don't buy a lot of processed foods, their grocery prices aren't better than what I can buy shopping intelligently elsewhere. Plus because their low pricing is based on a limited assortment of items sold with higher volumes, the reality is mostly they don't carry the items that I buy.

For the other stuff, when I look for such items, I tend to go to Target or other stores (+ my next door neighbor has a Costco card...), even though WM is 3/4 of a mile away.

 
At 6:23 PM, Anonymous Alex B. said...

at Capitol Gateway and Skyland "the city" is at risk. Both projects are underway. Now they don't have an anchor retailer.

Sure, but that's not specific to either the city or to Walmart. A project that loses its anchor is going to be in trouble, period.

Skyland's been here before. Back when NCRC was in charge, Target was the anchor. They backed out, and that (among other things) put it on hold. The city was invested (having taken over from NCRC) in condemning the land to assemble the Skyland site before Walmart even entered the picture.

All of that is to say that this is more a story about the challenges of developing any kind of retail in those particular projects. Framing this as Walmart screwing over the city misses a lot of the dynamics.

There's no doubt that losing Walmart as a tenant is a big blow to both projects, but I'm not convinced that this is particularly different than any other risk. The city didn't take any particularly big risk to land Walmart that they weren't already taking.

 
At 8:12 PM, Blogger Richard Layman said...

in terms of your response, I guess then I am not making myself clear. (I think I am though.)

I don't see this as Walmart f*ing the city over as much as the city officials who thought they were being so smart get f*ed or at least, "miffed."

I see this as pretty funny, "hoist with your own petard" in a way.

It's not about WM screwing the city, it's the city jumping on the bandwagon, believing as a result they would get extranormal consideration.

In the end, Walmart got what it wanted, but the city didn't, at least as it relates to the two now cancelled projects.

All the justification for the WMs -- jobs mostly, but also "food deserts" -- was that the stores in NW and Upper NE in the "better" areas were traded for stores in the poorer areas.

And now that's not coming to fruition at all.

The business prospects for the two sites were never that good in the best of circumstances. As virtually all retail chains are dialing back, even WM, once considered unstoppable, projects with weak fundamentals are at risk.

FWIW, the Skyland project has always been particularly marginal, hence the extra extra extra extra extra extra normal steps the city has had to make to keep the project going.

Instead, they should respond to the better market opportunities elsewhere that they are blowing off, and will have more money, eventually, to deal with the hardest projects (St. E, Congress Heights, Skyland in particular).

 
At 11:28 PM, Anonymous Alex B. said...

I get your argument, I just think that argument is inconsistent with the phrasing of the city's involvement as "a big bet" on Walmart.

 
At 9:20 AM, Anonymous charlie said...

@AlexB, I think Richard is referring to the backstory of Walmart wanting to crack urban markets and the last frontier of their retailing to the poor. Lots of behind the scene deals and promises there.

In the UK Sainsbury is buying a high street retailer of home goods to become a high street hypermarket. People are mixed on the idea. Result of margin pressures from Aldi/Lidl.

TJMaxx is also eating alway at Walmart's business case.

 
At 9:48 AM, Blogger Richard Layman said...

Two things I guess. 1. is "the city" as the executive and legislative branches. 2. is the city as comprised of its elected leaders.

I was referring to the 2nd.

If you were involved in the issue at the time, it was very clear that the Mayor (Vincent Gray), Council Chairman (Kwame Brown) and chair of the Council's Ec. Dev. Committee (Harry Thomas Jr.) were all lined up in advance of the public announcement by Walmart, to support this deal.

The other Councilmembers, with some exception of Phil Mendelson, were pretty much in lockstep with it.

E.g., the way to have made the project on Georgia Ave. mixed use required that "suasion" be applied by elected officials on the developer. It never happened.

The report I did discussed this and how it was impacting the ability of the agencies to act "objectively."

Months later, to mollify me, when I confronted someone specifically, the response was something like 'your report laid out why the process went forward as it did."

In other conversations with govt. employees involved in or aware of this decision process, they made it pretty clear that the agencies had no real independence of action as it related to dealing with the Walmart projects. That it wasn't worth the cost to challenge the elected officials on this particular issue, because it was a done deal.

As it is, it happens that the Fort Totten and NJ Ave. projects were mixed use, because of the particular developer, which has extensive experience and comfort with mixed use.

Although I did talk to an architect on the Ft. Totten project once, and he said despite that, it was still very difficult to make congruent the differing goals and objectives on the project, and the interests of the developer and the lead tenant.

====
The city ruled that the Large Tract Review process doesn't consider economic impact to be a "neighborhood effect" to be addressed by the review process called for by the regulation, so they didn't address those issues.

I thought it should have been litigated, but I wasn't in the position to bring a lawsuit forward.

W4 Thrives did but they f*ed up, they sued the wrong party, the Zoning Commission, when they should have sued "The Mayor" (Executive Branch/OP). SO the suit was thrown out of court (the ZC got a summary judgement).

I can't remember if I discussed in the report the CEQA "urban decay" element, but I did discuss it in some blog entries. The basic point is that the impact of new retail development on preexisting commercial space is supposed to be studied.

... fwiw, in my observation WM hasn't had that much negative impact on existing business, but that was predicted in the report too, because outside of groceries, in the categories that WM represents, DC is understored. And that nationally, that was likely a common exception in many center cities, unlike previous evidence vis-a-vis suburban and exurban locations.

 
At 9:59 AM, Blogger Richard Layman said...

re hypermarches...

the US has an interesting history with discount stores. KMart wasn't the first. There were many back then, some run by department stores, some by supermarkets, etc.

Many mixed groceries and other lines, but over time that declined, because they found grocery purchases including items that needed to be refrigerated cut back on the length of time people were willing to shop. So the combo store format didn't move forward.

There were a couple of exceptions. Meijer in Michigan was one, but even they were Western Michigan first, and it wasn't until the mid-1970s that they became an element in Eastern Michigan (previously KMART, which was based originally in Detroit, as Kresge, and then in Troy, as Kmart, dominated the Eastern Michigan markets, in fact were "over-"stored in order to preclude competition).

And Fred Meyer in Washington State and Smitty's in Arizona. I seem to recall a couple of attempts at hypermarches beyond those companies but they never moved forward very much.

The reason for food in a supercenter is that people eat every day so they buy food frequently which leads to repeat visits, which then make it possible to sell the other stuff. (Sorry to be pedantic.)

... e.g., TJMaxx, the problem that Walmart has is that they aren't very good merchandisers, in that retail shopping in their stores isn't exciting, it's not about the experience.

So many of their categories are susceptible to competition from companies that can provide excitement along with the sale (remember that since most purchasing is discretionary, people need to be motivated to make the decision to buy), except for those people who have no other shopping options.

Just like with transit, people with choices choose to shop elsewhere, while the most price motivated stick with Walmart.

2. wrt Kroger and Marketplace it would be interesting to talk to them about what the point is.

Personally, I think it is about "boxing out" Target and Walmart especially in locations that would otherwise be attractive to them, to prevent a Supercenter especially from popping up and competing for grocery sales--55% of the avg. sales in a supercenter are groceries.

So with a Marketplace (or an HEB Plus) the predominately supermarket motivated company can compete/box out a Walmart and reduce the competitive threat.

It's not like Kroger is looking to be a national discount department store, irrespective of Fred Meyer.

 
At 10:39 AM, Anonymous charlie said...

Yes I read something last week on Walmart as a "logistics company masquerading as a retail outlet" although I always felt that was amazon.

RE: hypermarket. I've always been impressed by the euro hypermarkets and their quality -- when I was going to spain we would only get our foie at carrefour (better quality french stuff). Much like Costco they are not going to cheap stuff.

Of course the other big box retail in Euroland is not as good as the us.

Other news -- the food delivery hype may have peaked. DoorDash just did a down round.

 
At 11:45 AM, Blogger Richard Layman said...

Forgot to mention the other force impacting WM from the bottom are dollar stores, which sell a lot more food than they used to.

There are a couple (probably more than I am aware of) regional discount stores, Shopko in the upper midwest and Freds in the south. They do pharmacy but not food, but speaking of logistics, WM likely beats them on that element.

wrt logistics, in the early 1990s especially there was a lot of writing about WM and cross docking, their use of IT, category management, etc. They were so far advanced at the time, that Kmart was never able to catch up. (WM was considered as significant an innovator in this area as was American Airlines and Sabre.)

2. wrt hypermarches, Meijers has nice stuff, not fois gras maybe. But yes Carrefour and similar companies (like Costco) realized they were selling quality and convenience at a good price, but not necessarily cheap goods. Fred Meyer is basically like Walmart with food. I've only been in one store, which was two story, in the Hawthorne district of Portland.

(WRT food, I find that Costco prices aren't necessarily "better" compared to promotional shopping and buying forward at Safeway and Giant, but they have some items that are unique to them that are great, like the whitefish spread, 2@$5 loaves of La Brea bread, for awhile a wheel of brand name brie for a great price, etc.)

you know the line in retail: "pick two: quality; price; convenience."

Costco has been the game changer in this arena too.

If you want to pay less and you have money, you go to Costco. You still spend a lot but get better items.

The interestingly thing is Costco's "limited assortment," which saves them a lot of money.

There is a retail consultant who is hard to read I think, but he focuses on this, has a phrase that I can't remember, but it's about how so many of the items carried in a typical supermarket don't sell.

 
At 11:58 AM, Blogger Richard Layman said...

oops. delivery.

The Silicon Valley folks are lucky that their financing sources have the same constrained world view. There's only so much market demand for that kind of service at premium prices. (Ironically, I had an idea like Kozmo for Ann Arbor back in the early 1980s.) Google Express and all the various Uber things with food, etc. It's money trying to build a market.

I just saw an ad today for HelloFresh, the meal delivery service, featuring Jamie Oliver and a new line of JO branded meals. Similarly, Mark Bittman left the NYT for another firm in this space.

Again, there's only so much demand for such meals. I don't mind grocery shopping and I can make a list of items to buy based on a recipe, so I don't need to use those services. (A friend of ours did and we experienced it. I didn't find the recipes scintillating, but a bunch of reviews in various newspapers, including the Balt. Sun, have been positive.)

It's a different kind of version of the "meal assembly" trend from about 10 years ago. Businesses set up where they would set things up, and you could go in and cook a goodly part of your week's meals and take them home (car-oriented sure). But I thought it would have been interesting to set something like that up as part of a public market like Eastern Market.

 
At 5:53 PM, Anonymous charlie said...

Well the lack of knowledge of basic cooking is endemic among young people in DC today.



very off topic:

https://www.yahoo.com/politics/bernie-sanders-radical-past-how-the-vermont-230255076.html

You'd think Costco would learn to be more urban friendly. I guess after seeing the demise of the urban tesco format, the various new ideas (TargetExpress), and now the 365 by WF they don't want to touch the space.

 
At 12:35 PM, Blogger Richard Layman said...

it's hard for Costco to be "urban friendly" because you need a vehicle to transport your shopping cart (one or more per trip) full of purchases.

But like with Walmart, nothing prevents them from having a big box in a center city location, and incorporating both acceptable urban appropriate design, structured parking, AND DELIVERY.

An independent outfit in NJ specialized in going in to the Costco store nearest to NYC and buying stuff for people and delivering it to NYC locations.

http://cityroom.blogs.nytimes.com/2009/09/28/for-buyers-in-bulk-a-one-man-delivery-service/

Yes, that's a hole in the market for Costco. Nothing prevents them from doing a Peapod of their own. And because of the likelihood of high value orders, it could pay for them.

 
At 7:59 AM, Anonymous Justin Hill said...

To whoever said that Shopko discount stores don't carry food: yes, Shopko does carry food, but in limited amounts in a grocery/candy department similar to the "Pantry" concept used at the Big Kmart stores. The bigger the Shopko store, the more groceries. The grocery department at the larger Shopko prototypes is called "The Market @ Shopko". Shopko also two shoe departments: an athletic shoe department, and another leased out to Payless ShoeSource, found at all the stores including the "Hometown" stores. Shopko also operates a small town version of their big box brethren called "Shopko Hometown" which they started after merging with Pamida for a second time by converting the Pamida stores. When "ALCO" went out of business, Shopko purchased 20 former ALCO store locations as far south as Texas and New Mexico, and converted them to Shopko Hometown stores.

 
At 8:22 AM, Blogger Richard Layman said...

Thanks for the correction. I was the one who wrote about Shopko. Note that I've never been in one, my knowledge is limited to what I read in the trade publications Mass Market Retailer and Chain Drugstore News.

And thanks for including the point about Alco and the acquisition of a small set of their stores. I was wondering about that. (I expect some of the dollar store companies picked other locations too.)

 
At 9:27 AM, Anonymous charlie said...

RE: costco delivery.

Costco had a partnership with Google Express although the choice of items was very limited. Given that Google Express is going away (Tom Fallows left to go to uber) it was probably just dipping their toes in. I'm sure they are looking at instacart as well.

 

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