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F A R M � C O M M U N I T Y

Wanted: Downtown Grocery Storesby Kennedy Smith

As Americans’ taste for down-town living grows, so does theirappetite for downtown grocery stores. In practically every downtownintercept survey our firm has conductedin the past two years, a grocery store wasone of the top five new businesses peoplesaid they most wanted to see downtown(in most cases, it was one of the topthree). Moreover, the average Americanhousehold spends a little more than$3,300 annually on food.

Given the above, it seems like itshouldn’t take too many households tomake for a successful downtown grocerystore, right? So, why is it so rare to see agrocery downtown?

Before responding to this question, itmay help to take a quick look back intime. For most of our country’s history,almost all retail food sales took place inthe town center, either in specialty foodstores (like a greengrocer, butcher, orbakery) or in a farmers’ market. Grocerystores – stores where a shopper couldbuy a variety of grocery items, withouthaving to go to several different special-ized stores – began appearing only in thelate 1800s, led by The Great Atlantic and

Pacific Tea Company (later A&P).But grocery stores didn’t flourish until

the advent of home refrigeration in the1920s. Refrigeration made it possible forpeople to store food for several days,eliminating the need for daily food shop-ping trips and making it feasible to buymore items in one store visit. In 1882there were 100 A&P stores in the UnitedStates; by 1923 there were 10,000, virtu-ally all of them in downtown areas.

With the post-World War II housingboom and the launch of the InterstateHighway system in the 1950s, Americansbegan moving away from town centers,and retail businesses – always market fol-lowers, rather than market leaders – fol-lowed them out to the suburbs, locatingalong highway strips and in new shop-ping centers and shopping malls.

No longer constrained by the size of adowntown building, grocery stores grewrapidly in size, driving down prices astheir sales volume increased. In the early1930s, the average downtown grocerystore was approximately 8,000 squarefeet in size. By 2000, the average subur-ban grocery store had mushroomed to52,400 square feet.

OBSTACLES TO LOCATINGDOWNTOWN

Now, people are moving back down-town – and they want grocery stores intheir neighborhoods. But there are manyobstacles to getting them back down-town. Among them:

• Land prices: It is usually moreexpensive – particularly in larger cities –to buy land downtown than on theperiphery of the city or in the suburbs.

• Land assembly: Given that today’saverage grocery store is more than50,000 square feet in size, and thatnational supermarket chains havebecome comfortable with their businessmodels, it is very difficult to find enoughcontiguous land available in a downtownarea without either great expense ordemolition of buildings (sometimes ofhistoric significance), or both.

• Siting: The suburban retail develop-ment model – store set back from theroad, surrounded by a sea of parking – is now commonplace for Americansupermarkets. Downtown developmentpatterns - zero-setback, parking in therear or in a parking lot elsewhere in the

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Editor’s note: In the early 20th century, downtown and neighborhood grocery stores were common. Adams, Massachusetts, had four A&P stores (above right).Groceries also offered business opportunities for new Americans. After arriving from central Europe, my great-grandparents (above left) opened this store in the“Hell’s Kitchen” section of New York City. Interestingly, this pattern is being repeated today, with a growing number of markets being opened by newly hyphen-ated Americans from Ethiopia, Bosnia, Vietnam, Pakistan, and many other places.

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district – are unfamiliar, and thereforeperceived as risky, to the national chains(and to lending institutions). They arealso likely to believe that they will needthe same number of parking spaces as for a comparably sized suburban store,not knowing how many district residentsare likely to reach the store on foot, bybicycle, or using public transit, ratherthan by car.

• Market: Most supermarket chainsneed to be convinced that older down-towns and neighborhood commercialcorridors have enough market demandto support a supermarket.

• Zoning: Zoning laws sometimesmake it difficult to build or operatedowntown grocery stores – particularlyas part of a mixed-use project in whichzoning officials fear that noise from a 24-hour or late-night grocery store orsmells from its trash area might disturbresidents.

ATTRACTING GROCERSTO DOWNTOWN

In spite of these obstacles, a growingnumber of communities are succeedingin attracting national grocers. In 1998,for example, a group of citizens in Wash-ington, DC’s 14th and U Streets neigh-borhood went door-to-door askingneighborhood residents where they shopfor groceries, how much they would

When You Can’tFind a NationalIn some instances, communi-

ties are not able to attract a major chainsupermarket but find that the veryprocess of exploring the possibility leadsto other ways to achieve their goal.

• In Boston’s Roslindale Village neigh-borhood, 600 neighborhood residentsinvested $1,000 each to raise enough cap-ital to open a neighborhood cooperativegrocery store.

• Residents of tiny Bonaparte, Iowadid something similar, selling $100 sharesin a local corporation, Township Partners,which then bought several downtownbuildings and opened a grocery store andsmall pharmacy in one of them.

• A group of citizens in Hoisington,Kansas bought a downtown building andrent it at a nominal rate to Duckwall’s, a locally owned general merchandisestore, in order to help keep the storedowntown. Duckwall’s offers severalaisles of groceries, in addition to othergeneral merchandise.

• In Richmond, Virginia, a youngentrepreneur, Johnny Johnson, opened a small neighborhood grocery store in1992. Community Pride now operatesstores in several of Richmond’s most eco-nomically distressed neighborhoods.

New TechnologyNew technological develop-ments are making it easier

for national grocery store chains to opendowntown stores. For example, onlineordering systems make it possible for customers to order groceries from theirhome computer, specify when they willpick them up, and then have their gro-ceries delivered curb-side. This can helpalleviate on-site parking demands, often a concern with downtown groceries.

ResourcesFor a more detailed look atdowntown groceries see

“Better Models for Urban Supermarkets,”co-authored by Kennedy Smith andWilliam Neuendorf. Copies of this 24-page booklet are available for $10 fromthe National Trust for Historic Preserva-tion, 202-588-6296; or order online:<www.preservationbooks.org>.

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The City of Burlington, Vermont (pop. 40,000), provided tax incentives and other assistance to supportthe opening of a downtown grocery in 2002. The city had been without a downtown grocer for severalyears. The City Market store, with over 140 employees, does $18 million in annual sales.

Wanted: Downtown Grocery Storescontinued from previous page

spend in a neighborhood grocery store ifone were available, what their level ofcommitment would be to supporting aneighborhood grocery, and their demo-graphic characteristics. This informationhelped persuade Whole Foods Market toopen a store in their neighborhood.

If you’re interested in bringing anational grocery store chain into yourdowntown, it pays to be well-preparedbefore making contact. The grocer willwant to know as much as possible about:the demographic characteristics of thedistrict; available space; zoning restric-tions; and the size and location of poten-tial competitors. Even if all your answersare exactly what grocers wants to hear,they will probably still be skeptical ofopening a downtown store. Your plan-ning commission’s positive attitude –along with assurances of support fromother city leaders – will go far towardsmaking the grocery company feel morecomfortable.

Other things to consider whenexploring the possibility of attracting agrocery store to your downtown:

• How much market demand for a newgrocery store is there likely to be? You canget a rough estimate by multiplying thenumber of households likely to shop atthe new grocery store (I’d recommendselecting half the total number of house-holds within a one-mile radius) by$3,300 – the amount the average Ameri-

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Editor’s Note:

Public MarketsCentral downtown publicmarkets, once common

throughout the U.S., have been making a comeback in recent years.

Portland, Maine (pop. 64,000) hadbeen without a downtown public marketfor more than a century – until the newPortland Market opened in 1998. Vendorstalls comprise some 17,000 square feet of the market’s floor space. Forty-five foothigh Douglas Fir beams create a dramaticinterior. For more details: <www.portlandmarket.com>.

Information about public markets isavailable from the Project for PublicSpaces: <www.pps.org/markets/>. See alsoRoberta Brandes Gratz’s article on farmersmarkets in PCJ #42; <www.plannersweb.com/wfiles/w175.html>.

willing to abate property taxes, help withland assembly, streamline the zoningapproval process, or use tax incrementfinancing to pay for site improvements ora parking garage?

The city of Knoxville, Tennessee, forexample, recently attracted a Food Citygrocery store (owned by a regionalchain). The 43,000 square foot store is inthe inner-city Mechanicsville neighbor-hood, just a ten minute walk from down-town. The land for the store, acquired bythe city’s housing and redevelopmentagency using federal EmpowermentZone funds, was conveyed to Food City,helping make the project financially fea-sible. Besides being accessible to down-town workers, the store will also benefitthe neighborhood and provide 130 newjobs.

• Is there strong community support fora grocery store? Would there be neighbor-hood opposition, or would neighbor-hood residents be enthusiastic about anew store?

• Will the siting and physical design ofthe grocery provide visual cohesiveness?

can household annually spends on groceries.

For example, if there are 5,000 house-holds living within one mile of the likelygrocery store site, multiply half of thatnumber of households by $3,300. Theestimated market demand would there-fore be $8,250,000 (your estimate mightbe smaller if there are significant com-petitors nearby, or if there are other reasons why a smaller percentage ofneighborhood households might notshop at a new grocery store).

• How large a store is needed and canrealistically be supported? What are theaverage gross sales per square foot ofother stores in the grocery chain (orchains) you’re considering approaching?You can often find information on salesper square foot in the grocery company’sannual corporate report.

Whatever the number (it’s likely to bein the $300-400 range), divide this intothe total estimated market demand to geta quick estimate of the maximum storesize that is probably supportable. Forexample, if a grocery store chain typical-ly earns an average of $400/square foot ingross sales, and you estimate that marketdemand is $8,250,000, the maximumgrocery store size your downtown couldprobably support would be 20,625square feet.

• Are there any existing businesses inthe district whose sales might be adverselyaffected by a new grocery store? Might itbe possible for the new grocery store toincorporate existing specialty food retail-ers into the new store (by leasing somesquare footage to an existing store, forexample, or by buying its productswholesale)?

• Is there an existing building that couldaccommodate a new grocery store, orwould a new one have to be built? If thelatter, would new construction endangerany historic or other architecturally sig-nificant buildings?

• What sort of support might the city beable to provide to make it as economicallyfeasible for the grocery chain to open astore in your downtown as it would be toopen a new freestanding one out on thehighway? Would the city, for example, be

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For example, if the store will be large,can the façade be divided into severalstorefront-sized components so that thebuilding’s mass isn’t too visually over-whelming or out of scale with its neigh-bors? Can the grocery store have largestorefront display windows, or can ithave casual dining space that flows outonto the sidewalk? This sort of ‘perme-ability’ is important to the visual rhythmand cohesiveness of downtown shoppingdistricts.

SUMMING UP:

In a growing number of cities, largeand small, downtown grocery marketsare opening. While bringing grocers toour downtowns is often a challenge, thebenefits can make this worth the effort.�

Kennedy Smith is aprincipal with the Commu-nity Land Use and Eco-nomics (CLUE) Group, aconsulting firm specializ-ing in downtown economicdevelopment. Her “Down-town Matters” column is aregular feature of the PCJ.

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