Study aims at drawing a grocery store to downtown.
By Steve Lackmeyer and Tricia Pemberton
Business Writers
WHEN Will Fathree moved into his Deep Deuce apartment, he looked forward to being near the popular restaurants, bars and attractions that are part of downtown Oklahoma City's revival.
It wasn't until after he had moved in that Fathree realized downtown was missing one critical need for residents: a grocery store.
"I didn't think it would be a big deal before moving in," Fathree said. "Before, I had always lived where a supermarket was close by."
Until a new Wal-Mart Neighborhood Market opened recently at NW 23 and Pennsylvania Avenue, Fathree drove about 15 minutes to the Wal-Mart Supercenter at Belle Isle Station. His drive is down to 10 minutes -- still an annoyance when driving through heavy traffic on NW 23.
"It's just something we have to accept," Fathree said.
Or is it?
Conventional wisdom has long dictated that downtown simply doesn't have enough rooftops to support a grocery store. But that theory is about to be tested, with the hiring of R-W Ventures and The Kilduff Co. to prepare a study aimed at luring grocery to the heart of the city.
"It's critical that we get a store," said Dave Lopez, whose Downtown Oklahoma City Inc. is joining with the Greater Oklahoma City Chamber of Commerce and the city's planning department in the hiring. Lopez noted a housing study completed over the summer showed downtown could support more than 4,000 new rental and owner-occupied residences over the next few years.
"So much of this seems to be a chicken versus egg dilemma of 'which comes first?'" Lopez said. "People who want to live downtown always want to know where they can get groceries."
Right now, Fathree said, there isn't a place. A full grocery trip requires a trip outside of downtown.
A 2003 study by economist Larkin Warner estimated downtown's population at more than 4,100 people.
Jim Brooks, marketing specialist for the Food and Agriculture Products Research and Technology Center at Oklahoma State University, said generally, a 10,000-square-foot grocery store wants to collect $63,000 a week. That would give a grocer about a 5½ percent gross. Once all services are paid, the profit drops to about 1.7 percent.
If that translated to 630 people who would spend $100 a week in the store, then a downtown grocer would have no trouble achieving profit margins if just a fourth of the population shopped at the grocery.
But grocery executives have told Brooks they want to wait until the downtown population hits between 8,000 and 10,000.
"And then there's almost got to be a rattling of the windows demanding a grocery store before one comes," Brooks said. "Even then, there will have to be some incentives to get someone to ride out that first year to establish their base and their consumers. There's just not enough people to support a grocery store at this point."
Intrigued
Grocers interviewed by The Oklahoman say they've noticed downtown's revival and are paying attention to reports of upcoming housing projects.
"You'd have to do some looking at what they're saying the live-in population would be," said Steve Lawrence, general manager for Oklahoma City-based Buy for Less stores.
"We haven't looked at it for a long time, because there just wasn't anything down there. We hear the people are coming, but we'd do the same thing as with any other store; we'd have somebody go do the demographics."
Crescent Market, now in Nichols Hills, got its start in the Plaza Court Building at NW 10 and Walker Avenue, across from St. Anthony Hospital. The store moved in the early 1960s, at the start of the city's northern sprawl.
"I was offered the opportunity to put a store back in that building, but I'm just not interested," owner Robert Pemberton said. "It's not feasible. Back when we were down there, Oklahoma City was still so small you could get people in from the north side or the south side. Everything was still centered around downtown. But now, you're not going to draw people from Edmond or Norman."
But Pemberton also believes downtown will someday be able to support a store. "It's still too young," he said.
Lawrence said downtown may be too segmented a market, with equal pockets of high- and low-income residents. He also questions whether a grocer can target shoppers who will just buy bread and milk but who will do all of their bulk shopping once a week at a discount store.
"You still have Mesta Park and Heritage Hills, but the disposable incomes are not always there," Lawrence said. "The money is going into renovating their big, old homes. Like Edmond, you have big, lovely homes, but then people are maxed on their mortgages."
And that leaves grocers with two-income families who cook less -- and shop less.
Most downtown residents are in the 24- to 35-year-old range, just starting their careers, Brooks said.
"There aren't your typical 4.2-person families," Brooks said. "How many of these people cook full meals versus eating out in restaurants?"
Pemberton suspects if downtown development continues, it might get a "small" grocery store -- 20,000 to 30,000 square feet.
"But these days and times, when they offer 5,000 different types of soda, you'd really have to pick and choose what you sell. You wouldn't have the space to carry everything."
Challenging assumptions
Oklahoma City Planning Director John Dugan isn't ready to accept "not ready yet" as an answer. He's visited other cities struggling with the same challenge and believes Oklahoma City should at least test the waters.
"Dallas just opened their first big downtown supermarket, and they have more than 10,000 units," Dugan said. "We have Heritage Hills, Mesta Park thriving without a full-fledged grocery. It really depends on expectations: people in surveys indicate they like downtown with or without the amenities you find in the suburbs."
But downtown development would pick up even more with a grocery store, he said.
Larry Kilduff, president of the Kilduff Co., is a retail real estate developer who believes his peers need a reminder that there's still money to be made in the urban markets they fled 30 years ago.
"There has been a dis-investment in the urban areas to where you have a hole in the doughnut," Kilduff said. "But most of these areas still have the density that would support retail. In most of these cities, and Oklahoma City is no different, development has moved far enough away that you find the hole in the doughnut is large enough to support retail again."
The problem, Kilduff said, is that most retail developers want to go where the work is easy. They don't want to mess with historical zoning, urban site acquisition and parking issues if they can build on a pasture near sprawl housing instead.
That's where Kilduff believes he can step in and help Oklahoma City lure a downtown grocery.
Oklahoma City, the Chamber of Commerce and Downtown Oklahoma City Inc. are paying Kilduff and his partners at R-W Ventures up to $25,000 to prepare a demographic study and analysis on the best site for a downtown grocery.
He's complimentary of developers such as Anthony McDermid and Bert Belanger, who suggested a spot for a grocery as part of their planned Triangle town center along Walnut Avenue, north of Bricktown. But Kilduff will be looking for what would be the perfect site -- and what it would take for the city to acquire it and make it downtown's first grocery.
"What we try to do is the predevelopment and pre-market work necessary to show it to someone who might not do all that on their own. But if they see it, they might make the investment," Kilduff said.
Kilduff can't promise success. He admits the work he's doing doesn't have much precedent -- and Oklahoma City is joining a handful of other cities that are just now trying to get grocery stores for their new downtown residents.
"This is a very bold step for them (city leaders) to ask, 'Can we prove a market, find a site, and then go out and market this to the retail community?' And it takes a desire to do something unusual, for a city to do something ahead of the curve."
Whole Foods
Reply With Quote
Re: Whole Foods Coming???
Originally Posted by metro
, but I think a location near Penn Square would be more suited for them.
Bookmarks