Robert Pela shared during Phoenix Urban Design Week that downtown flourishing can’t occur without two elemental ingredients. One of them is that the community has readily accessible public education; and the second is that dwellers must have sufficient opportunities for shopping locally, without leaving the immediate downtown area, however one defines that. For the purposes of this post, “immediate downtown” means the area around Central and Van Buren where one can walk or bicycle within 10 minutes of leaving one’s front doorstep. Yes, there’s a market at McDowell Road – but recall from my previous posts that to many, north of the I-10 leg between 7th Avenue and 7th Street, McDowell Road is simply “out of bounds” in downtown terms.
The problem for our city center has been that the “groceries” business downtown has been dominated by one player, Circle K, with its limited inventories for as long as most of the folks living and working downtown today can remember. When it comes to retail shopping, I’m libertarian. I think the market tells you where to build the market, so to speak. That’s the approach used by supermarket chains but their typical analysis is grounded in a rigid demographic matrix. Rooftops and houses under construction at the time of the analysis is what chains are interested in before vertical development of a store occurs. “Premature” opening of a supermarket is grounds to end a manager’s career in that business. So while a supermarket chain may purchase land, “banking” it for future development when a parcel lies in the path of eventual population growth, if the demographic analysis doesn’t deliver the arithmetic answer that enough middle class shoppers live within the desired radius, there’s no development. And that’s Robert’s paradox – he wants retail necessaries to be on offer, to spur downtown population in-migration; but supermarkets won’t participate in that “order of business.”
The notion that supermarket shopping is the only way to buy one’s necessaries is odd. If you travel in Europe, have you noticed that, even in the most capitalist societies, supermarkets are still relatively smaller players, and in some places the “supermarkets” are little more than bulked-up convenience stores? A 40-thousand square foot food store would be a large player in many major European cities. When I represented Fry’s during the 1990s, the template store was 62,000 square feet – and that was well before the “lifestyle” behemoths that you see among the major chains today in low-density areas. While Fresh & Easy failed in the U.S., Tesco’s failure wasn’t its modestly-sized stores. It was more the failure of misguided initiatives like (a) using self-service check-out stands that confused consumers accustomed to heavy “store-helper” presence; (b) eliminating vouchers and coupons, which turned off price-sensitive shoppers; and (c) pushing ready-made meals that were incompatible with local tastes. Tesco’s immediate competition came from Whole Foods and Trader Joe’s, chains with equally small footprints. Wal-Mart began experimenting with smaller stores after Tesco announced opening Fresh & Easy, making Tesco’s way a bit tougher. [Wal-Mart’s experiment has become a commitment of sorts; in 2013, Wal-Mart projects opening 125 “supercenters” but also 115 new stores of fewer than 60 thousand square feet of sales area.] Tesco’s other misperception was that American shopping habits were similar to European traits. I visited three Tesco stores in Ireland in March, two in Dublin. Any of those Tesco stores would have survived on pedestrian traffic alone. No Tesco store in Arizona or Nevada could have survived merely on pedestrian traffic shopping, due to uncooperative weather and ingrained shopping habits.
Enough of Tesco; in addition to brand issues, there is the dilemma of accommodating parking and drives. Supermarkets promote the expectation of wide-open parking fields where shoppers navigate their hauls back to their SUVs in their carts. This means that even a modestly-sized (40,000 s.f. of sales area) supermarket with loading docks and 200 parking stalls “needs” a minimum of 7 to 8 acres of developable land. Phoenix has a number of vacant and underdeveloped lots downtown; but not too many of these are sufficiently large to support a conventional suburban-oriented supermarket. That fact explains why Circle Ks are numerous between 7th Avenue and 7th Street south of I-10, and supermarkets are not. But downtown Phoenix doesn’t require supermarkets and warehouse-shopping concepts to induce local dwellers to move into and shop downtown. In fact, there should be a big experiment, featuring Phoenix as one investor, in developing away from retail “Taj Mahals.” More on this in the next post.