Kroger Co. (KR) explores downtown grocery options - What would that look like?

Columbus stores could be a model for urban format

CINCINNATI - If the Kroger Co. ever builds an urban-format grocery store in downtown Cincinnati, chances are it will look something like this:

Produce stand at Kroger's Columbus Short North store

 

Kroger’s “Short North” store in Columbus is a 53,000 square-foot retail establishment at 1350 North High St. It has a façade full of windows that showcase Kroger produce and organics to passing pedestrians. It also has a bistro, sushi bar and restaurant seating inside. It has 24 self-checkout scanners to accommodate Ohio State University students – and their parents – who account for more than 60 percent of store sales.

“It’s very successful,” said Lindsey Taylor, real estate manager for Kroger’s Columbus division, which opened the $10 million store in 2011.

The store is less than a mile from The Oval, a green space at the center of Ohio State’s campus. It is 2.2 miles from the Ohio Statehouse in downtown Columbus.

“Our store was able to bridge the gap between the Short North/downtown and what Ohio State was doing on South Campus,” Taylor said. “We were able to revitalize an entire city block and really change the landscape of High Street.”

Lindsey Taylor, Kroger real estate manager

 

The store is an example of how urban-format retail is different than the suburban templates that Cincinnati-area Kroger customers know so well, with their big box ambience and large parking lots in front, a place to load up for the week then drive home with the trunk full.

Urban stores are pedestrian friendly, with parking lots hidden above or below the retail space. They’re a place to shop daily, buying only enough to carry home – or eat on the premises.

“The most successful urban stores address their community very closely,” said Michael Zaretsky, an associate professor in the School of Architecture and Interior Design at the University of Cincinnati. “They include the community in the design process and they make sure the store includes what the community needs. They need to have a very committed clientele.”

Zaretsky and his students have been working with Kroger for about two years, gathering a set of best practices that the company can use to develop urban locations. Students visited more than a dozen stores during their research – including Short North – praising it as having “a strong urban street presence” and strong links to pedestrian traffic.

“A store that you can’t comfortably walk to ... is not an urban store,” he said. The Columbus store has the parking to the side. It’s a good compromise because it still has a strong urban street presence. When you walk inside, you’re not just looking at shelves but produce, nicely displayed. There’s a lot of great design choices that were made, things that make it appealing for the urban shopper.”

Kroger’s unique design was partly inspired by a series of focus groups with surrounding residents and required by city zoning standards in the district, known for its art galleries and Bohemian atmosphere.

“I don't think you could put this store anywhere and have it be as successful as it is right here,” said Taylor. “It's a combination of all of the neighborhoods that make up this community that make this store successful.”

The store has tried to strengthen those ties to surrounding communities with business practices. It accepts Ohio State student ID cards, which double as debit cards that parents can pre-load. And it established a gift card program for low-income families looking to buy freshier, healthier food.

Store Manager Richard Pond is a 33-year Kroger veteran has worked in all kinds of retail formats, including Marketplace stores, which are typically four times bigger than Short North. But Pond said the urban format is busier, with shoppers who buy smaller quantities but make daily trips.

“It’s a great way to be able to communicate on what their needs are,” he said. “We listen to what they want and are able to build on that.”

Kroger Store Manager Richard Pond

 

At another Columbus location, Kroger has approached downtown dwellers and office workers with a Tap Room that hosts after-work happy hours, corporate meetings and tailgate parties. The enclosed party room has its own liquor license. It was added as extra seating at Kroger’s 63,000-square-foot Brewers Yard store because its bistro was regularly getting 200 to 300 lunch customers from large employers in the Brewery District just south of downtown.

“Most stores are busy a couple times a day. We’re busy pretty much throughout the day,” said Store Manager Tom Heise. “As more folks make the transition to downtown, now it’s a place to live. Ten years ago it wasn’t. Now, it’s literally the place to go.”

The Columbus stores may have some urban-format features worth imitating but they would be hard to duplicate in the compact blocks of downtown Cincinnati. Short North, for example, sits on 3.4 acres and its manager says the store could definitely use more parking. Brewer's Yard has ample parking on its 7.58 acre lot.

That is about ten times larger

than the block where Rookwood Properties is exploring ideas for a Kroger-anchored residential tower that could accommodate a Kroger store half the size of Short North. The project is at an early stage, but the size differential points to the logistical challenges Kroger might face if it builds new store downtown.

In the meantime, Kroger is already selling to downtown dwellers.

Kroger declined to make local managers available for WCPO interviews, but spokeswoman Rachael Betzler said the company is making improvements at stores that serve downtown customers – investing $5 million each since October, 2012 in its Queen City, Bellevue and Hartwell stores.

Dining area at Newport Pavilion store

 

Like Short North, the Kroger Marketplace store at Newport Pavilion has a sushi bar, bistro and seating area for dine-in guests, plus a Little Clinic health center and extensive home furnishing merchandise.

Even the tiny Vine Street store in Over-the-Rhine is making changes within its 12,000-square-foot shell to accommodate downtown’s changing demographics.

“The store replaced the produce fixtures this year allowing for more organic varieties and produce space overall,” Betzler said. “The new cases allow for more space vertically rather than horizontally. Also, customer requests (led to new stock items like) craft beers, Gallo & Woodridge Wine varieties, Chobani Greek yogurt, Cape Cod Kettle Chips, Starbucks Iced Coffee, curling irons for the first time (and) baby supplies to name a few.”

Organic section at Kroger Vine Street store

 

Zaretsky applauds such changes and calls Newport Pavilion a great store, but he adds neither is an urban-format store.

“I personally think our city would benefit greatly from a fantastic, truly urban grocery store,” because it would demonstrate “a commitment to downtown,” he said. “That’s our cultural core. If we believe in that, and we want people to live there, then we also need to recognize that people live differently downtown in terms of how they get around, how they want to shop.”

After getting his architecture students involved in a series of research design projects, then presenting that research to Kroger executives, Zaretsky is convinced Kroger will build that “truly urban grocery store” when the time is right.

“They know it’s important and they’re looking at lots of ways to do it,” he said.


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