When east Vancouver shoppers learned this month that they had bagged Clark County’s first New Seasons Market, which will open on Southeast 164th Avenue later this year, the announcement may have felt familiar. The high-end supermarket was hardly the first to show interest in selling food to those who earn higher wages in that part of town.
East-side grocery stores
Chuck’s Produce & Street Market
13215 S.E. Mill Plain Blvd., Vancouver
19610 S.E. First St., Vancouver
Fred Meyer – Fisher’s Landing
16600 S.E. McGillivray Blvd., Vancouver
11325 S.E. Mill Plain Blvd., Vancouver
New Seasons Market (opening in October)
2100 S.E. 164th Ave., Vancouver
2615 N.E. 112th Ave., Vancouver
13719 S.E. Mill Plain Blvd., Vancouver
16200 S.E. Mill Plain Blvd., Vancouver
305 S.E. Chkalov Drive, No. B1, Vancouver
221 N.E. 104th Avenue, Vancouver
430 S.E. 192nd Ave., Vancouver
905 N.E. 136th Ave., Vancouver
Whole Foods Market
815 S.E. 160th Ave., Vancouver
Just months earlier, Chuck’s Produce & Street Market opened its doors at 13215 S.E. Mill Plain Blvd. Along the 3.9-mile stretch of Mill Plain between Interstate 205 and 192nd Avenue, two Walmart Supercenters — which contain full grocery selections — act as bookends to Chuck’s, as well as WinCo Foods, Trader Joe’s, Fred Meyer, Safeway, Whole Foods and Costco. A Target store in the corridor will soon add grocery options of its own, and New Seasons will be a short hop to the south when it opens in October.
This lush abundance of supermarkets stands in stark contrast to Vancouver’s western, downtown and central neighborhoods, where some residents face grocery deserts and where activists have tried for years to lure new stores. And while east Vancouver shoppers have abundant choices today, low profit margins and fierce competition could pose businesses challenges to the competing markets.
In a race to be the last grocer standing, the stores are competing for the same pool of shoppers in an industry where sales generate about 1.5 cents for every dollar spent in the store, said Jan Gee, president of the Washington Food Industry Association.
“We are seeing a very competitive stage in the grocery industry,” she said.
That could translate to bargains for shoppers who frequent those sites, said Gee, whose 580-member group represents independent grocery stores. In east Vancouver, independent grocer Chuck’s Produce & Street Market checks its competitor’s prices weekly to stay in line with the pack, said Erik Blythe, store manager.
“Everybody does it,” he said. “The Fred Meyer guy comes to our store on Tuesday, and we go there on Wednesday. It’s just something you have to do.”
Just as shoppers weigh organics against bargains when evaluating where to shop, supermarkets shop for the densest population and the best customer profile when they decide where to sell their wares. Location is all about demographics, the characteristics of a the surrounding population, according to Gee and others.
Did you know?
For every $50 spent in a grocery store, operators keep about 75 cents in profit, according to the national Center for Economic and Entrepreneurial Literacy.
In east Vancouver between I-205 and 192nd along Mill Plain, an abundance of 30- to 50-something residents live in some of the city’s highest income-earning households. In the corridor’s western-most neighborhoods, the median household income is $44,643, while its eastern-most households pull down a median of $68,511 a year, according to 2009 data released by the U.S. Census Bureau. A large percentage of this area’s adults attended college. Many hold positions in management or work in professional careers.
“Stores like New Seasons, they really cater to a more affluent community,” Gee said.
The grocer carries mostly organic and local foods, along with gourmet take-home dishes in addition to standard products such as Bumblebee Tuna and Best Foods mayonnaise.
New Seasons shoppers generally pay a bit more for the store’s upscale atmosphere, packaging and organically grown produce, said Pam Lindloff, an associate vice president and retail expert with NAI Norris Beggs & Simpson.
East Vancouver also draws feeder traffic from high-income areas such as Hockinson and Camas, home to Clark County’s richest neighborhood, where the median income is $101,350. These numbers have helped attract Trader Joe’s, Whole Foods and Chuck’s Produce, Lindloff said.
New Seasons officials cited several other factors that led the company to lease a former Albertsons grocery store at Southeast 164th Avenue and McGillivray Boulevard.
The company liked the location for its cluster of nearby retailers, including the Fred Meyer grocery and variety store on the east side of 164th and a Target store on 164th and Mill Plain, said Lisa Sedler, president and chief executive officer of New Seasons.
Minneapolis-based Target said this month that it plans to add more grocery selections to three Vancouver stores.
Rather than competition, Sedler said she views the neighboring stores as destinations that will complement the New Seasons Market when it opens at Fisher’s Landing Marketplace.
“Fisher’s Landing specifically has a lot of retail synergy, so that people don’t have to drive too far to get their shopping done,” Sedler said. “The site has good visibility and plenty of parking, too.”
Even so, Gee predicts competition will eventually leave one or more competitors out in the cold.
“Stores don’t move into other people’s markets to enhance the other person’s sales. They move in thinking they can take their sales away and knock them out of the market,” she said.
Lindloff said that New Seasons, with its organic selections, will compete for customers with the area’s other grocery stores.
But “the amount people spend on groceries isn’t going to change,” she said, so if shoppers add a stop at New Seasons, they might drop a visit to another supermarket.
When looking for sites, grocers also try to avoid barriers that might keep shoppers out, which can be anything from a street median to an aspect of the community’s population.
“If the area has a high number of military families, they will probably shop at a commissary instead of the grocery store. That’s a barrier,” Gee said.
Other barriers can include the cost of locating a store in an area, she said.
“The cost of starting a grocery store is extremely high” because of the required investment in the shelving, equipment and stock, Gee said. New Seasons will spend $4 million to $5 million to revamp its new store’s interior, at the same time as the shopping complex’s owners spend $4.5 million to $5 million on the exterior.
But some stores save money and time by locating in existing buildings, said Deborah Ewing, a retail expert and vice president of Eric Fuller & Associates Inc. commercial real estate firm in Vancouver.
“That way they can get in right away. It expedites the process by about two years,” she said.
As a resident of west Vancouver, Ewing said she also wonders why New Seasons hasn’t committed to opening a store on the west side of Interstate 5. She speculated the store might be considering another former Albertsons site, west of I-5 at the Northeast 99th Street exit at Hazel Dell Avenue. The property, like New Seasons’ east-side location, is also co-owned by Tualatin, Ore.-based Gramor Development and Vancouver’s Steve Oliva.
“That location is prime for a New Seasons store,” Ewing said. “It’s on a major arterial, and it’s right off an I-5 exit, so it could serve Ridgefield and beyond.”
Residents of central Vancouver appear to have the least chance of drawing an upscale food market. Just two supermarkets — the St. Johns IGA store and Albertsons — serve patrons along the 22-block stretch of East Fourth Plain Boulevard between Interstate 5 and Stapleton Road. The sector also includes an empty Fred Meyer building, vacated in 2008 when the company opened a newer store off of Grand and Columbia House boulevards.
As one of the city’s poorest neighborhoods, where household incomes lag 40 percent below the rest of Vancouver, the central sector’s lack of grocery store options are not unlike other low-income areas throughout the country, said Gee of the Washington Food Industry.
“Nationally, they’re called food deserts for a lack of grocery stores with healthy, fresh-food options in less affluent locations,” she said. “It’s interesting, some states have started to adopt legislation to provide financial incentives to grocery stores to locate in food deserts.”
Long-term efforts to attract a grocery store downtown Vancouver also have been unsuccessful because food purveyors say the area lacks population density, although grocery and variety chain Fred Meyer foresees potential growth in the area.
The company’s store at Grand and Columbia boulevards sits just off state Highway 14 near a wide base of residents from downtown, the waterfront and central Vancouver, said Melinda Merrill, a spokeswoman for the Portland grocery and variety chain, which is owned by Cincinnati-based Kroger Co.
“We got in on the ground floor,” Merrill said. “That area is growing still with the (waterfront) condos across the highway.”
But critics say the Grand Boulevard store off the freeway is not as accessible to residents of downtown’s urban core, people who often travel by foot, bicycle or bus. Downtown apartment and condominium dwellers also complain about the next-nearest store, a Safeway at Main and East 38th streets. The aging store is smaller than the company’s newer models, which often feature sushi bars, fueling stations and in-store natural markets.
Analysts say they don’t expect Safeway to update its Main Street store unless there’s an increase in the area’s population — and its income. At the same time, trendy food sellers such as New Seasons aren’t likely to view downtown Vancouver as a good location for the store’s higher-priced, organic product model.
Median household incomes in downtown Vancouver’s three central Census tracts ranges from $29,661 to $33,000, making it less attractive to the grocery chains, Ewing said.
“Look at how many people live in this section versus another, and look at the income,” she said. “Then, you’ll see the strategy.”