Two regional grocery store chains each with hundreds of locations and a global retail giant apparently hoping to capture the urban-neighborhood niche will soon hang new shingles in Springfield. As local shoppers gain options, food retailers appear to be using convenience to secure their pieces of the evolving grocery market.
In a swirl of activity, Des Moines, Iowa-based Hy-Vee is finishing construction on its $17 million store at Battlefield Road and Kansas Expressway. Bentonville, Ark.-based Wal-Mart Stores Inc. is planning up to six of its smaller Neighborhood Market concepts in the city, according to Councilman Scott Bailes. Springfield-based Ozarks Value Food Stores Inc. is bringing a Save-A-Lot Food Store to the corner of National Avenue and Commercial Street. In addition, Price Cutter, a division of Springfield-based Pyramid Foods Inc., has recently remodeled one store with its urban bistro concept, and it is building another store west of a planned south-side Neighborhood Market.
Bailes said the city has had conversations with Wal-Mart Stores Inc. officials about building its roughly 40,000-square-foot Neighborhood Markets at six locations, though as of July 12 only plans had been submitted for two sites – the intersections of Glenstone Avenue and Bennett Street and Republic Road and Farm Road 135/Golden Avenue.
Renovations are under way at the Northview Shopping Center at the corner of National Avenue and Commercial Street to turn the 17,000-square-foot space into a Save-A-Lot grocery store. Ozarks Value Food Stores, a wholly owned subsidiary of Summer Fresh Supermarkets Inc., bought the rights to use the Save-A-Lot name and utilize its warehouse and distribution facilities, as well as sell approximately 50 private-label product lines.
Minneapolis-based SuperValu Inc. operates 1,290 Save-A-Lot stores nationwide. Brent Brown, CEO and president of Summer Fresh and Ozarks Value Food Stores Inc., said the company wanted to re-enter the Springfield market following the closure of the far south-side Summer Fresh store in fall 2007. However, he felt the Save-A-Lot model, which features quality produce and meat offerings alongside value-based groceries, might be the best fit for north-side residents, whom he believes are underserved.
“These economic times that have lingered for a few years now have really, I think, changed the spending habits of consumers for the long-term. Consumer spending habits may have forever been changed, and value has become way more important today than it was, say, 10 years ago,” Brown said.
He said Save-A-Lot staff worked with Brown’s team to identify underserved areas of town.
“In my opinion, this market is over-stored. I’m surprised that the other retailers that are coming to town – obviously, they see an opportunity – but I’m surprised that they don’t see that it’s over-stored,” Brown said, based on his knowledge of the market, having helped operate Smitty’s Supermarkets in Springfield in the 1980s and 90s.
Dan Shaul, state director for Springfield-based Missouri Grocers Association, said he believes in-coming grocery chains are willing to take a risk on Springfield because of its dynamic economy and growing population.
“From the grocery industry point of view, Springfield has always been a great market,” Shaul said, noting a good mix of national and local chains. “(New stores) are certainly going to change the dynamic, but the big winner here is the consumer.”
Shaul said the real industry trend is adding prepared foods. He said companies such as Price Cutter, which developed its downtown Bistro Market and has remodeled its Kansas Expressway and Republic Road store to expand its delicatessen, is being smart with those choices in its fight against corporate heavyweights such as Wal-Mart.
“Today’s generation is very much in a hurry,” he said. “Prepared foods are certainly not a fad; they’re a trend that I think is going to stay here for quite a while.”
He also noted shoppers are finding value in private-label options at grocers such as Save-A-Lot.
Brown said Save-A-Lot’s overhead costs are reduced compared to traditional stores. He estimates renovations and equipment would approach $1 million, and the company is only planning to hire up to 30 employees.
“I’d be really nervous if I was bringing a conventional grocery store to town,” Brown said.
Hy-Vee’s 86,000-square-foot store across from Dillon’s Supermarket on West Battlefield Road will feature a full kitchen, a food court with dining room and an on-site dietician when it opens by November, officials have said.
Spokeswoman Ruth Comer said Hy-Vee was not concerned about Springfield competitors.
“We face competition in every community we operate in. This is nothing new to us,” she said, adding that entering the Springfield market was part of the 233-store chain’s effort to expand within its eight-state area.
In recent years, Price Cutter, a subsidiary of Pyramid Foods Inc., has expanded its presence with the development of a Bistro Market downtown and the winter opening of a Price Cutter Plus Supermarket with expanded salad bar and hot food options at the corner of Chestnut Expressway and West Bypass. According to Springfield Business Journal archives, the company has plans to anchor Wilson’s Creek Marketplace at Republic Road and West Bypass, with a 52,000-square-foot store.
Price Cutter District Marketing Director Lacey Waters said the company declined to comment at this time. Calls to Dan Morales, a spokesman for Wal-Mart, also were not returned by deadline.
In applications for permits submitted to the city, the cost of Wal-Mart’s West Republic Road location is roughly $1.7 million, while its Glenstone Avenue and Bennett Street site is estimated to cost $1.6 million in construction.
According to www.walmartstores.com
, Wal-Mart operates 185 Neighborhood Market stores in the U.S. Products and services include grocery items, drive-through pharmacies, one-hour photo labs, health and beauty aids, paper goods and household supplies.