LAS VEGAS-They say that one way to “sell” rising food prices is to reduce the size of the box. Is that also true of the box that the box is in? Panelists weighed in on the very topic during a session titled “Not Your Grandma’s Grocery Store,” run by moderator Larry Casey, president and COO of Donahue Schriber, based in Costa Mesa, CA. But according to panelists, all are in expansion mode and are generally sticking to their current box structure, which is a huge step up from where they were in years past.
Donald Wright, senior vice president of real estate and engineering at Safeway Inc., who says he is “seeing big efforts into health and wellness going forward,” tells attendees at ICSC RECon2012 that the firm plans to have many projects in the pipeline this year. Wright explained that the new store model includes open space, good neighborhoods, simple layouts, range of items, ample parking, open pharmacy, and an “inviting bakery” among others, all “designed to fit the way you live.”
Wright said that the company plans many “redevelopments of its existing facilities,” this year. He also said that although the company doesn’t want to become “the world’s biggest developer,” the company has taken the approach over the past few years to “do it ourselves rather than relying on outside developers.” The reason for this, he said, is because many of the developers they had to rely upon had disappeared over the past few years, and haven’t come forward. “But we are seeing them start to come now,” he said.
When asked about the internet potentially “hurting the grocery chain’s future,” Wright says he uses the internet as part of the firm’s go to market strategy, noting that it is instrumental to its success. “Our business is anybody that sells food…if you can create something for your customer that is ‘ease of getting into a store’ you will be a winner.”
For Rob Koch, senior director of real estate at the Fresh Market Inc., a specialty grocery retailer with 116 stores in 26 states, the internet is used as a tool for the company, but “I don’t believe that the actual tool of consumers picking their meat and vegetables will be replaced by the internet in any way,” he said.
The high-end 20,000-square-foot box specialty food retailer also has plans for expansion this year. The firm plans to open 16 stores by the end of 2012, and about 20 stores in 2013. His company is looking at building new stores, which he says is preferable to redevelopments. “We prefer new construction as opposed as to taking an existing big box,” he said, adding that redevelopments are a bit harder to fit what the company is trying to accomplish.
Joseph McKeska, group VP of retail market development at SuperValu Inc., which has had about $37-billion in sales this year, says his firm is doing more replacements than ground up. “We are working heavily on second use facilities due to a combination of lack of availability, and it really being more of an economic proposition for us,” he said. He added that the company is really going to focus on its Save A Lot stores this year.
The Kroger Co., which has 2500 stores throughout the US, is also continuing to build a lot of stores throughout the US, but is concentrating on areas that it “currently has a presence in,” explained Terry Evans, VP of real estate at the company. Evans explains that the firm is going to open 35 stores by the end of the year, but he points out that only 10 to 12 of them will be brand new stores, while the rest will be expansions or relocations.
Photos from that session:
Panelists at ICSC RECon 2012’s “Not Your Grandma’s Grocery Store” sound off on expansion plans.
Larry Casey, president and COO of Donahue Schriber, asks panelists about how internet is affecting the future of their industry.
More than 31,000 attended ICSC RECon2012.