Retail roundup: nonprofit public market opens in Anacostia | City owned markets | Experience retail

Retail in low income communities.  Eater reports, "A José Andrés-Backed Cafe Named for Marion Barry Opens in Ward 8," that a public market form of business has opened in Ward 8 to sell locally grown produce and prepared foods.  

Marion Barry Avenue Market brings aisles of fresh produce and fast-casual soul food to Anacostia, an underserved community with access to only one major grocery store until now. Named in honor of the late D.C. Mayor Marion Barry, whose life and political legacy is closely tied to Ward 8, the market and cafe debuts to the public on Saturday, September 27. Spearheaded by urban food justice nonprofit Dreaming Out Loud, the project is partly backed by Longer Tables Fund — celebrity chef José Andrés’ philanthropic arm that connects at-risk communities with affordable food options. Breakfast, lunch, and dinner is served daily for pickup and on-site dining across indoor communal tables and a garden patio. There’s also a demo kitchen to host classes around cooking and nutrition. The market is stocked with locally grown fruit and vegetables sold at a sliding-scale price with voucher‑friendly options, too (1303 Marion Barry Avenue SE).

I'm pretty sure I suggested something like this many many years ago, but I can't find an entry.

However, with the news that Starbucks is closing their Anacostia store ("Anacostia Starbucks closure stings, even as some see a neighborhood ‘renaissance’," Washington Post).  WRT the Starbucks closures across the country ("Why Starbucks is closing hundreds of stores," CNN, "This is why your Starbucks just closed," Boston Globe) either the stores are unprofitable or marginally profitable, but even if profitable the return on investment is likely less than the cost of capital. Hence closure.

WRT both the Starbucks story and the Marion Barry Avenue Market, it reminds me of the now 13 year old entry:

-- "In lower income neighborhoods, are businesses supposed to be "community organizations" first?"

Re-reading it, it's damn good, and is on my mind in part because I am working on a piece on how to build an entrepreneurship ecosystem in low income neighborhoods.  

The points made then are equally relevant today in terms of how to provide retail options in neighborhoods that can't support traditional retail business models.

New urbanists and the desire for neighborhood retail/the 15 minute city.  This also comes up for higher income communities and how new urbanists clamor for corner stores ("Bring Back the Corner Store," Planetizen, "Reviving neighborhood stores, CNU)), like the good old days ("The Corner Store: At the Intersection of Memory and Time," Post).  

The problem is that retail business models don't support stocking stores at this micro-scale, where goods can be sold reasonably cheaply.  

The same goes for the 15 minute city.  Retail business models don't work at the scale of a 3/4 mile walking distance, you need to draw on a much larger radius to generate the number of customers needed for success.  

The proof of this is NYC and other large cities.  There, small corner stores work because of the population density, and there are some business cooperatives like Key Foods Group that focus on that market.  Even so, store models needing larger customer bases cluster in the city equivalent of a regional shopping district, like Union Square, with its Whole Foods Market.

I counter always with the example of the Spar business group in Europe (and other countries) which has a system set up to support small stores.  

Similarly, a wholesale business in Poland is set up to support small stores there, as 40% of the shops are run by local businesses (at least in 2011, when I read the story ("The man who bet on tradition," Financial Times).

... For while many Poles were entranced by the prospect of choice and consumer plenty that the new shops offered – a stunning contrast to the empty shelves and shoddy goods that had been a hallmark of communism – many others remained loyal to the mom-and-pop shops that exist in every Polish neighbourhood. Those are the shops that Eurocash supplies with produce and other goods, often on a cash basis.

“We believed in the future of independent retail – that there will always be a space for small shops,” says Mr Amaral, who splits his time between Poznan in western Poland and his native Portugal.

... here are about 150,000 small shops in Poland, the highest number in the European Union, and of that about a third are family owned. In all, small shops make up 40 per cent of Poland’s retail food shops, while supermarkets, hypermarkets and discount shops have about 42 per cent of the market – a vastly different picture than in most other European countries, where big retailers dominate.

If we had wholesaler systems focused on providing items at good prices to small stores, then it could work.  Without that, it doesn't.  That's why you have chains like 7-11.

City owned groceries.  Are suggested for "food deserts."  It's a mistake.  First, because of the wholesale/pricing issue.  Second, because city governments usually lack the ability to be innovative and spry at the scale of a retail business.  Chicago was going to do it and stepped back ("A closer look at Mamdani's proposal for city-owned grocery stores," Chicago Tribune).  Zohran Mamdani has it as a campaign plank ("A closer look at Mamdani's proposal for city-owned grocery stores," Spectrum News).

A comment in the NYC article is off base. The person worked for Whole Foods and used the Department of Defense PX stores (commissary) as an example of nonprofit stores selling cheaply.  But the volume of these stores on military bases exceeds that of large scale supermarkets.  They may have free rent too.  Although the Pentagon wants to drop the business ("Pentagon wants out of the grocery business, asks industry for proposals," San Antonio Express-News).  From the article:

The department also will consider closing "all or a portion" of existing commissaries if a commercial chain has nearby stores that can offer the same 23.7% discount that the military markets provide.

Interesting, because for years low PX prices were a marketing point for enlistment.  But apparently, some of the low costs come from the Pentagon picking up back office costs like ordering. 

Small for profit businesses have a hard time.  So do nonprofits trying their hand at it ("Nonprofit grocery chain Daily Table to shut down operations," Boston Globe).

-- "Grocery stores in cities: the failure of the "15 minute grocery store"," 2023

Cities might be able to make a go of it if they band together and create a common brand, operations systems, and vendor relationships ("Why ask why? Because," 2007) to share across a network of small grocery stores in poor neighborhoods, where they would share the back office systems and negotiate a good or at least better product cost rate with a national food distributor.

Department stores as experiences. The Wall Street Journal has an article, "Can the French Reinvent America’s Broken Department-Store Model?," on the opening of a branch of the Paris-based Printemps department store in NYC.

Printemps New York is following the European department-store playbook of serving up enough food and drinks, exhibitions and other activities to keep shoppers occupied far beyond the fitting room. The store in Manhattan’s financial district was designed to evoke a luxurious Parisian residence. It more closely resembles a chic nightspot than it does a suburban Macy’s. The new store features an espresso cafe under a green-and-white circus tent, three other restaurants, hand-painted tiles, a champagne bar and spa chairs for mini-facials and head massages.

I think the article misses the point in that experience-based retail at the department store scale is limited to big cities/urban populations, at least in the US.

Department stores in the US have long since shifted to a more utilitarian model with limited pizzazz outside of NYC stores like Macy's and Bloomingdales.

What suburbanite is going to go to a suburban Macy's for a sit down meal, even if British department stores are known for exemplary food options, and when it was a great experience in the past (as a child I ate at the Hudson's restaurant, and on a road trip to Chicago during college, in Marshall Fields' restaurant).

Although apparently one of NYC's best Italian restaurants is in the Herald Square Macy's.

When Downtown department stores close, generally there is a loss in the range of retail experiences in the city.  But many people don't care because they aren't looking to shop so much as they are looking to buy quickly, and move on.

This is a point similar to that of corner stores in New York City neighborhoods.  They survive because of density.  Same with experience-oriented department stores.  They are unique.  A destination.  Appropriate for center cities but not likely to be successful in the suburbs.