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December 11, 2003

Grocery stores cooking up more innovations

Changing lifestyles spark new designs and amenities

By TERRY STEPHENS
Special to the Journal

It's easy to be a part of today's supermarket revolution.

Grab a lemon-honey roasted chicken or an order of Chinese fried rice for tonight's meal as you fill your cart with groceries for future meals.

Whole Foods expands here

Whole Foods Market, the Austin, Texas, grocery chain that moves $3 billion a year in natural food products, will soon have a significant presence in the Puget Sound area.

Three years ago, the first Whole Foods Market opened at Northeast 64th Street and Roosevelt in North Seattle. A second store is being built in Bellevue at 116th Avenue Northeast and Northeast Eighth Street. Within the next three years half a dozen more stores are expected to open.

Company Chairman, President and CEO John Mackey said recently the Bellevue store is “particularly exciting” for the company since sales at the Seattle store make it among the chain’s top three stores. He said he thinks the Bellevue store “has the potential to quickly climb to those same ranks.”

Dean Trenery of DJT Real Estate Advisors represents Whole Foods in Seattle. He said when it opens next July, the 52,000-square-foot Bellevue store will be the largest Whole Foods Market in the 168-store chain. Twenty-three other stores under construction average 42,000 square feet.

“A store that was 25,000-30,000 square feet used to be a big store,” Trenery said. “Now, the average is moving up, as stores open with 50,000 square feet or more. They’re adding more specialty sections (and store tenants) and many of them have underground or covered parking areas.”

Trenery said he’s looking at two sites now for Whole Foods stores that will serve Belltown, South Lake Union and west Capitol Hill. Other locations to be scouted later include Magnolia, West Queen Anne, Ballard, Edmonds, Lynnwood, Redmond and the Issaquah plateau.

With 22-foot-high ceilings, the stores have room for graphics, color and “things that make shopping more colorful and interesting. We want to create the excitement of event shopping,” Trenery said.

One reason for Whole Food’s success is locating in areas with highly educated people. It’s not a snobbish standard, it’s a practical one, he said.

“When we study the demographics for a new store area, we look at the usual income and traffic pattern figures, for instance, but our primary criteria is to meet the right education levels,” Trenery said.

The chain looks for sites where 35 to 40 percent of the population within a three-mile radius has undergraduate or graduate degrees. “Those are the customers who will read labels, ask questions and get involved in understanding the natural products the store carries,” he said.

— By Terry Stephens

Save time in a hurried day by combining a lunch break and grocery shopping. Pick up a few items for the weekend, then relax at a cafe table as you enjoy a bowl of chili or a deli sandwich.

Just remember that your spouse's boss is coming for dinner tonight? On your way home from work, stop by your favorite grocery to pick up a marinated steak ready for the grill.

Today's super-sized supermarkets and specialty grocery stores are responding to changes in shopping and eating, particularly in households where both spouses work outside the home.

Grocers have responded to consumers' changing needs as well as creating new needs for them, adding not only fresh meals-to-go and in-store cafes but also coffee bars, flowers, wine and fresh seafood. Some supermarkets are even adding day care and display kitchens.

For many real estate developers, architects and interior designers, supermarkets have become a major source of business. New and larger markets are being built, amenities are being added and colorful banners, displays and merchandising are going up, part of trying to make grocery shopping more fun and exciting, according to Mark Simpson, vice president and principal of the Bumgardner/Carlson Alliance, a Seattle architecture group.

Many of these trends reach back to the Pike Place Market, Simpson said, where people shop frequently, know many merchants by name, enjoy the eclectic mix of specialties from fish to flowers and often take shopping breaks at the market's restaurants and coffee counters.

“Grocery stores, even decades back, have always meant more than just a place to get a loaf of bread,” Simpson said. “The guy behind the counter knew your name. It was a meeting place as much as it was a food shopping place.”

Simpson was the principal in charge of design for Epicenter, the new Fremont project that features a PCC Natural Markets at street level, underground parking and 128 apartments above the grocery. In dry weather, the market's large outdoor eating and gathering space is usually full, he said.

His firm is now working on a similar project in West Seattle: 16,000 to 20,000 square feet of retail space anchored by a grocery. The Carlson side of the architectural alliance is also involved in developing creative grocery marketing concepts, having designed all of the Larry's Market stores.

“We're seeing more emphasis on fresh products and the idea of combining the dining experience with the shopping experience,” Simpson said. “The newer grocery stores in urban areas are proving to be a perfect fit for urban development, attracting people who want a more enjoyable grocery shopping experience as well as being able to live downtown and walk to the grocery.”

A major draw for specialty supermarkets is fresh seafood, said Larry Andrews, the retail marketing director for Alaska Seafoods in Seattle.

“A number of stores, including Larry's Markets, Thriftway, Haggen, Top Foods and QFC, do a tremendous job in marketing seafood, with a wide variety in their counters. Many value-added products are marinated, ready to cook. There has been a 25 percent growth in these value-added products between 1992 and 1997. Also, people are becoming more educated about the health values of seafood as an alternative to more fattening foods,” he said.

Andrews said Americans only consume about 15 pounds of seafood a year, compared to more than 60 pounds per person in Spain and other countries.

Seafood counters also generate more interest in trying new types of seafood, including scallops, black cod and Alaskan spotted prawns.

“They are seeing the seafood consumption numbers creeping up," Andrews said. “Also, more people are discovering that fresh frozen seafood has the flavor frozen in and that it's as good as fresh seafood that's not frozen. Then they can keep a freezer full of seafood, ready for any occasion.”

Major players in Washington state's grocery industry are all responding to changes in food marketing.

Albertson's, founded in Boise in 1939 by Joe Albertson, was a forerunner of today's emphasis on specialty products and customer service, introducing a scratch bakery, magazine racks, home-made ice cream, popcorn, nuts and an automatic donut machine.

In 2002, the chain's nearly 2,500 stores produced revenues of $37.9 billion. Over the next five years, Albertson's plans to build 1,850 food stores, stand-alone drug stores and gasoline stations, and remodel 730 existing stores.

Quality Food Centers will anchor Vulcan's mixed-use development in the South Lake Union neighborhood, on the site of the former Quinton Instruments facility. It will also add Starbucks stores and specialty product sections in its existing stores.

Safeway is planning to convert an older, 15,000-square-foot store on lower Queen Anne into a 35,000-square-foot grocery and 3,800 square feet of other retail, topped by 50 condominiums. The company is also planning to redevelop its grocery in downtown Bellevue. The new Safeway will have 350 to 392 apartments above it, plus an additional 20,000 square feet of retail.

Larry's Markets, a national leader in grocery innovation, has found success with its Market Cafe, Produce Row and Market Deli, plus new sections such as Lorenzo's, a soda fountain and espresso bar, a floral shop and B.I.O., featuring natural, organic and environmentally friendly products.

Courtesy of Vulcan Inc.

The QFC logo is featured prominently in this sketch of Vulcan’s proposed 2200 Westlake mixed-use project in South Lake Union. The grocery story is expected to have many innovative attractions, but designers aren’t tipping their hand yet.

Larry's food courts now include cooked-to-order menus for breakfast, lunch or dinner, including Taqueria Aprisa, serving authentic Mexican burritos, tacos and salads made from scratch, and Panizza, offering grilled Italian sandwiches.

Haggen, the Bellingham grocery chain that also owns Top Food & Drug stores, last year opened a store in Auburn with a child care center, restaurant, fresh seafood and 15-foot-wide doorways without doors, using new technology to keep heat in and cold air out, according to industry sources.

The newest player in the highly competitive grocery market in the Puget Sound area is Whole Foods Market, the Austin, Texas, company that has proclaimed itself the world's largest natural foods supermarket chain.

With a three-year-old store in north Seattle and another under construction in Bellevue, the natural foods marketer is expanding here, with five to six more stores planned within the next three years, according to the firm's Pacific Northwest real estate representative, Dean Trenery of DJT Real Estate Advisors in Seattle.

Terry Stephens is a freelance writer based in Arlington. He can be reached by e-mail at features@gte.net.

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