Meijer Marketplace

[Designerguy24]

Do you think this would work in Downtown Detroit? yes or no? and why?

http://www.crainsdetroit.com/article...r-urban-store#

Meijer deploys urban strategy with trial run of smaller urban store

By Nathan Skid
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Courtesy Meijer Inc. Rendering of Meijer Inc.'s planned store in Melrose Park, Ill.
With a planned Aug. 25 opening of a pilot store in the Chicago area, Grand Rapids-based Meijer Inc. has embarked on an urban growth path that other national retailers are exploring.
Meijer announced this week that it will open Meijer Marketplace, a smaller version of its supercenter store, near Chicago area in hopes that it will become a successful format for urban development.
Robert Gibbs, managing principal of Birmingham-based Gibbs Planning Group and instructor of an urban retail course at Harvard University, said smaller formats for big-box food and retail companies is a trend being seen across the country.
"Publicly traded retailers need to show growth," Gibbs said. "Across the country, they are no longer going to the edge of suburban areas to wait for farms to become subdivisions. They're going into the cities and opening smaller stores in historic buildings."

Erik Unger, Crain's Chicago Business Photo taken in February of shopping center in Melrose Park, Ill., where Meijer Inc.'s new store is slated to open Aug. 25. Meijer's 96,000-square-foot, mini-supercenter is about half the size of an average Meijer store but will have most of the same departments as a full-size Meijer, including groceries, electronics, seasonal items, toys, sporting goods and a pet department.
Frank Guglielmi, director of public relations for Meijer, would not disclose the build-out cost of Meijer Marketplace but said the average cost of a supercenter is about $15 million.
Guglielmi said the new small-store format is a prototype for other urban areas and downtowns across the nation. The populous Chicago suburbs are a ripe proving ground for the concept, he said, and if successful, the company could build more stores in the near future, including in Michigan.
"Potentially down the road, we could bring this type of store to other urban markets," Guglielmi said. "The bottom line is, you can't take a 200,000-square-foot box and put it in a densely populated neighborhood. This gives us another option."
Neil Stern, senior partner at McMillan and Doolittle LLP, a Chicago-based retail consulting firm, said major retailers nationwide are looking at urban areas for growth because suburbia has become oversaturated.
"They are running out of room in traditional suburban markets," Stern said. "As retailers were building big-box stores in suburbia, they were ignoring urban areas because the real estate wasn't there or they were too hard to develop."
But Stern said that sentiment is changing as major retailers like Best Buy Co., Home Depot Inc. and Wal-Mart Stores Inc. are developing smaller stores to fit into cities.
"Urban areas are one of the last frontiers for them," Stern said. "But the thing about urban areas is they are hardly homogeneous. You have tremendous variations in income and ethnicity, but they are generally underserved."
Gibbs pointed to Bentonville-based Wal-Mart's 18,000-square-foot format as an example of the urban trend, with the company looking for ways to grow into urban areas that can't handle the size of a typical store, which can range from 50,000 to 200,000 square feet.
"Best Buy has gone with a half-size format, as have Office Max, Office Depot, Staples, H&M," he said. "They have to grow because they are public companies, and the best place to do that is in the urban areas."
Daniel Duggan contributed to this story.

[BrushStart]

Almost anything could work in downtown Detroit, unless they build it like a suburban strip mall. Right now, there is enough demand to fill downtown with high rise residential buildings. Downtown has the capacity to support numerous large retailers. Personally, I used to live under a philosophy that I needed always spread my money around to different businesses to help keep them in afloat. Recently, I've come to the conclusion that there are enough new people to float almost every business I was concerned about. The only businesses I worry about are restaurants because there are a lot of them popping up daily. We need actual retail. Make downtown a complete shopping environment.

[mwilbert]

There really isn't any reason to put a mini-Meijers downtown.

"Potentially down the road, we could bring this type of store to other urban markets," Guglielmi said. "The bottom line is, you can't take a 200,000-square-foot box and put it in a densely populated neighborhood. This gives us another option."

Detroit has plenty of neighborhoods which are not densely populated, many of them close to downtown. You aren't going to have a Meijer's in Detroit, even a little one, without a lot of parking, which is the last thing I want downtown. If there were no other place to put it, maybe they could justify the cost of building a parking structure into their site, but why would they do that if they didn't have to?

Downtown has the capacity to support numerous large retailers.

There is literally no evidence of this. Maybe it is true, and it is entirely possible will be true someday, but given that there still aren't that many people living downtown, that there are no large or even medium-size retailers downtown, and that there are none obviously anxious to locate there, this is a faith-based assertion.

[Rochelle St.]

I shop the Meijer in Roseville, great grocery section!

[Gannon]

I can only go to ONE Meijer comfortably...their tiny store on Dix south of I-75. At least I can easily find everything I need...and for some reason they are the most consistent store to have organic lemons and the better oranges.

Most of their stores are SO huge, they chase me out. Dashed into the one on Haggerty and 8-mile on the way to my 30th High School Reunion this past Saturday, and nearly broke into melt-down because I couldn't find anything...yet had to walk a few MILES to figure that out. Mega-stores just totally f-'in' suck. I have the same complaint with Home Depot...and CostCo, although at least they make it fun.

I wonder which'll be the first to have mandatory motorized carts. Probably CostCo, their super-sized ones can be a little tough to handle loaded. Then again, not everyone has to have a drink or two in order to suffer shopping, heh.


Cheers

[douglasm]

A couple of thoughts.....

There are two ways downtowns can grow retail. First would be the traditional way, by offering goods and services not available anywhere else. This would draw traffic to the stores, and has worked in smaller downtowns. Second would be to offer goods and services that area residents would use. As the population base in the CBD continues to grow, this is the more probable outlook for retail in the urban core.

The other thought in regards to shrunken Meijers, they're not the first to explore this idea. Fred Meyer [[a northwest Kroger owned operation similar to Meijers) and Target build half to 2/3rd sized stores in smaller markets that they feel would not support a full sized store, and Target in perticular is making a push into urban areas, having announced a store to be build into an exsisting building in downtown Seattle [[which DOES have a large downtown resident population).

Retail growth comes from expansion, and as many of the chains begin to suffer from the McDonalds problem of having locations everywhere already, they're beginning to explore urban areas where the traditional large footprint stand alone store won't work..

Lowell once posted a 2006 study that said the population of downtown [[and "surrounding neignbourhoods") was about 74,000 with an annual average income of about $45,000.....27% with incomes above $100k, and about half between $50k and $100k. Imagine Kalamazoo [[or 1 1/2 Midland's) in a denser area with a higher median income but with limited retail services available. Logic would dictate that retailers would find a way to service this population.

[Zacha341]

Yes, they are one of the few stores that carry organics a little lower priced than Whole Foods. I go the one on Middlebelt off of 96 in Livonia. At least it's a straight shot local. They're huge which is a bit annoying. You have to know what you're getting and learn the store so as to not walk around wasting time... yet their location signage is REALLY BAD... so you still wonder about looking for stuff.... LOL!

I can only go to ONE Meijer comfortably...their tiny store on Dix south of I-75. At least I can easily find everything I need...and for some reason they are the most consistent store to have organic lemons and the better oranges.

[wolverine]

I'm a little concerned about Meijer. Even while Target started building urban stores, Meijer still had the opportunity to compete and succeed. They have been slow to react. Now Walmart has slipped in and is opening small stores in neighborhoods....and none of them have parking.

It was an untapped market Meijer could have taken advantage of in the Midwest. They did not. Now their growth is limited to an area where they already have competition.

[iheartthed]

I'm a little concerned about Meijer. Even while Target started building urban stores, Meijer still had the opportunity to compete and succeed. They have been slow to react. Now Walmart has slipped in and is opening small stores in neighborhoods....and none of them have parking.

It was an untapped market Meijer could have taken advantage of in the Midwest. They did not. Now their growth is limited to an area where they already have competition.

Yeah, Meijer was surprisingly extremely slow to react. But Meijer also doesn't have a large presence in the markets where urban big box has taken off.. maybe excepting Chicago.

[wolverine]

Yeah, Meijer was surprisingly extremely slow to react. But Meijer also doesn't have a large presence in the markets where urban big box has taken off.. maybe excepting Chicago.

And the fact that they don't have that presence is a good thing I think consumers may be more willing to try something new. Walmart has a stigma attached to it. Target not so much. But if you never heard of Meijer and they suddenly opened a small grocery store on your block, you may opt to shop there as opposed to Walgreens or CVS [[which now have produce sections in larger cities)....reiterating the fact that the door has closed for markets they could have expanded into.

[bartock]

Almost anything could work in downtown Detroit, unless they build it like a suburban strip mall. Right now, there is enough demand to fill downtown with high rise residential buildings. Downtown has the capacity to support numerous large retailers. Personally, I used to live under a philosophy that I needed always spread my money around to different businesses to help keep them in afloat. Recently, I've come to the conclusion that there are enough new people to float almost every business I was concerned about. The only businesses I worry about are restaurants because there are a lot of them popping up daily. We need actual retail. Make downtown a complete shopping environment.

I've been entirely confused with your frrequent claims of downtown being full, waiting lists, etc. Not to mention the retail aspect. If there is demand, the demand will be met. People like to make money, and folks that determine retail and residential investments tend to know what they are doing. Yet, you've made these claims "matter of fact-ly" as if thousands of people have moved into downtown under everyone's noses and it is some secret known only to you, or perhaps to lead into some conspiracy theory against downtown Detroit as though [[significantly subsidized) shots at retail and residential development have never been tried before.

I don't live downtown, I'm only downtown about 60 hours a week. I've seen a lot of activity in recent months at the Ren Cen, Chase Tower, and obviously the Broderick, among other smaller projects like the med student housing [[think it is housing) they are building across from the Harper Professional Building. I expect to see more as Gilbert starts investing in the buildings he's bought, and I expect retail to follow, as it follows in every single economic model where retail demand outweighs supply. I've not seen the things you claim to see from a residential perspective, unless all of these people you claim to see are working in the suburbs for the same 60 hours a week I'm working downtown, and I'm just not noticing similar traffic coming into downtown as I'm leaving downtown at night.

[wolverine]

Almost anything could work in downtown Detroit, unless they build it like a suburban strip mall. Right now, there is enough demand to fill downtown with high rise residential buildings. Downtown has the capacity to support numerous large retailers. Personally, I used to live under a philosophy that I needed always spread my money around to different businesses to help keep them in afloat. Recently, I've come to the conclusion that there are enough new people to float almost every business I was concerned about. The only businesses I worry about are restaurants because there are a lot of them popping up daily. We need actual retail. Make downtown a complete shopping environment.

Fact is, at the very least to reach the level of retail and restaurants downtown that people on this site tend to dream of, you'd need at minimum 100,000 residents living downtown. Certainly you could fill storefronts with less people. But to achieve the kind of vision many people want, you got to build a lot of residential towers.

I'm not all that convinced that anything can work. If anything can work, I should be able to pick any day I want like.....some Tuesday in February.....at 8:30 pm and see a packed sidewalk.

[DetroitPlanner]

Meijer relies on the same philsophy that stores like Walmart does. Pack the store with lots of stuff, open as few as possible, then have the shoppers drive a little longer distance and cover much of the transportation and distribution costs that it would take to have 4 stores instead of a larger one.

In order to do this cost effectively Meijers needs to have a sea of parking plus several bays for loading and unloading trucks. I can't see an existing store or sight that would be workable if they are trying to get 96,000 sq ft of retail. Its going to need to be newly built and economics of Detroit would make it much more cost effective to build it in a strip mall style. There are just not the places available to retrofit, and has parking.

There are probably sites near dowtown were this would be possible, places like Michgan and Trumbull come to mind, but I am probably going to get tarred and feathers for even saying that.

[corktownyuppie]

I've been entirely confused with your frrequent claims of downtown being full, waiting lists, etc. Not to mention the retail aspect. If there is demand, the demand will be met. People like to make money, and folks that determine retail and residential investments tend to know what they are doing. Yet, you've made these claims "matter of fact-ly" as if thousands of people have moved into downtown under everyone's noses and it is some secret known only to you, or perhaps to lead into some conspiracy theory against downtown Detroit as though [[significantly subsidized) shots at retail and residential development have never been tried before.

these are not "claims of being full". Most of the high end developments in midtown/downtown are at or near capacity. My friend at Lofts of Merchant Row has a lease that ends in August, and they are raising his rent by $500/mo. because the demand is there. So he is now looking for somewhere else to live. There are waitlists for many of the newer places. It's easy to say that if demand were there, development will follow. And you're right, they would.

But the markets in real estate, construction, and financing are not efficient. And you could make the argument that, right now, they are the most inefficient that we have seen in 30+ years or more all around the country. Housing developers are having a hard time getting loans on pieces of vacant land, let alone a tricky adaptive reuse project on a 1920s era building that's been in disrepair for 2 decades.

Retail will come, slowly but surely. The most successful retail, however, will be those shops that are hard to find throughout the Metro Area. For example, the traffic at Slow's BBQ is just simply ridiculous. It's unbelievable. It'll be a Saturday afternoon a 2pm and you'll still have a 30 minute wait.

This is why a Meijer/Kroger opening in Midtown probably wouldn't make it yet...while a Whole Foods probably could. If I'm a professor at Wayne and a new Kroger opens up...well lah-dee-dah. I'm going to pass by 5 grocery stores just like it on my 30 minute commute to Plymouth. But if a Whole Foods opens up, well I'd have to drive all the way out to Bloomfield to get to the closest one to my house, so I'll probably stop here.

The retail market in downtown Detroit is tricky and it's not going to work by the usual metrics of dollars spent per 5 mile radius...

[animatedmartian]

I would rather have a mall than any one box store. I keep thinking parking would be either a 4 story-parking garage, or underground. Though it seems kinda odd to have a parking garage just for a Mejiers, so I'd rather them build a complete mall with it. Even if Detroit's population density is relatively low, it still makes sense to build up rather than out.

[DetroitPlanner]

animatedmartian, downtown malls have mostly been failures. For every Water Tower you can a Columbus City Center. Many of the other malls around Water Tower are not even half full and there are a lot more people living around Michigan Ave than there are living around Woodward in thier respective CBDs.

Canada is better known for having revialized downtowns than the United States is, yet this list of downtowns in Southern Ontario is exhaustive. Remember Trappers Alley failed, the RenCen failed, its a tough nut to crack.

[animatedmartian]

But for Detroit, wouldn't it survive at least while people are moving into Midtown/Downtown? I wouldn't expect it to be huge, just something for a half sized [[or whatever urban size they're talking about) Meijer with some smaller stores attached. The particular design I'm thinking of is similar to Brooklyn's Atlantic Center, if not a little smaller. I understand there's a lot of risk involved, but I have optimism that if it's done right it would be profitable for as long there were enough people moving into the area.

To me this area seems like the only logical spot to build anything [[strip mall or whatever) if whatever company wants to build a supermarket in the Downtown/Midtown area without demolishing whole blocks of buildings and getting the most traffic. Don't burn me too hard.

[bartock]

But for Detroit, wouldn't it survive at least while people are moving into Midtown/Downtown? I wouldn't expect it to be huge, just something for a half sized [[or whatever urban size they're talking about) Meijer with some smaller stores attached. The particular design I'm thinking of is similar to Brooklyn's Atlantic Center, if not a little smaller. I understand there's a lot of risk involved, but I have optimism that if it's done right it would be profitable for as long there were enough people moving into the area.

To me this area seems like the only logical spot to build anything [[strip mall or whatever) if whatever company wants to build a supermarket in the Downtown/Midtown area without demolishing whole blocks of buildings and getting the most traffic. Don't burn me too hard.

That's Illitch's land. Going to be a hockey stadium.

[animatedmartian]

That's Illitch's land. Going to be a hockey stadium.

Are you serious? I forgot all about that.

[bartock]

Are you serious? I forgot all about that.

That's been the expectation. Of course, nothing's been announced and may not be for awhile. But it is Illitch's land and I'd be surprised if he attempted the sort of retail being discussed here on that location.

[DetroitPlanner]

animatedmartian, I don't see anything wrong with your ideas however the key is getting enough major retailers interested in the project to build it that way. I took a look at streetview of the Atlantic Center. The developer has a great spot in the center of highly populated Brooklyn to work with. That makes selling the space easier. It also seems to be a typical mall that get be dropped just about anywhere with Familiar Names of stores emblazoned on the outside. Target, Marshalls, Old Navy, and Office Depot could do well in Detroit, but to get these independant companies sold on the concept may be difficult.

It is also the rail hub which brings folks into the area.

[animatedmartian]

That's been the expectation. Of course, nothing's been announced and may not be for awhile. But it is Illitch's land and I'd be surprised if he attempted the sort of retail being discussed here on that location.

IMO, Brewster is a better site for a stadium. But I don't have millions of dollars to spend. Ironically, Brewster is where retail could be considered, I read, for a full size Mejiers.

animatedmartian, I don't see anything wrong with your ideas however the key is getting enough major retailers interested in the project to build it that way. I took a look at streetview of the Atlantic Center. The developer has a great spot in the center of highly populated Brooklyn to work with. That makes selling the space easier. It also seems to be a typical mall that get be dropped just about anywhere with Familiar Names of stores emblazoned on the outside. Target, Marshalls, Old Navy, and Office Depot could do well in Detroit, but to get these independant companies sold on the concept may be difficult.

It is also the rail hub which brings folks into the area.

I guess. I figure crime might not be as big as a problem as once thought [[but still a problem), but then I don't know anything about that other than big news stories.

The Woodward Rail could sort of act something similar to that, though no where on that scale. But I realize that having a transportation hub greatly helped in Atlantic's case since that's where you get the most concentration of people. That's why I figure a Detroit retail center wouldn't be as huge or busy.

[Junkin4Life]

I think they should open a Meijer Market place on East Jefferson and Saint Jean. That is a perfect site for it

[kryptonite]

There are so many nearly-abandoned shopping centers in the older suburbs and a few in Detroit that I would think Meijer or any other retailer would be able to find a location with parking without much trouble.

Downtowns and areas near downtowns present a bit of a problem if substantial parking space is needed. But that problem doesn't much exist in Detroit, there are areas within a mile or two of downtown that could accomodate a retailer with some amount of parking. And the old New Center complex not only had retail [[Crowley's), but it also was adjacent to a parking garage.

[Hypestyles]

build one at Livernois & I-94... vast abandoned factory grounds..