What would it take for a downtown Albany supermarket?

shoprite Albany produce dept

Maybe at the ESP? Maybe somewhere else?

By Alison Bates

Urban planning and development often prompt a lot of discussion here at AOA, so we thought it'd be interesting to have an actual urban planner look more closely at some of the topics that bubble up. Meet Alison Bates, who takes up the issue of a downtown Albany supermarket today.

As the discussion of downtown Albany's redevelopment progresses, the call for a neighborhood supermarket has become central to the conversation. A place close at hand to get good food if you live or work downtown, a way to avoid driving to a strip mall each week to do your grocery shopping -- many of us would like this.

Not only would it be a convenience, but it would speak loudly about downtown Albany. Downtown grocery stores are an important piece of a city's redevelopment. They're a classic urban amenity that sends a message that your downtown is doing well, and that breathing new life into your city is not only possible, it's already happening.

So what would it take to make this a reality? There are some sizable economic, political, and logistical challenges. But there is hope.

Let's look at some of the economics -- because urban planning usually comes back to the numbers (and because everyone secretly enjoys econometrics) -- and some different ways of thinking about the situation.

The economics

The truth is that right now a regional or national supermarket is not going to see much reason to expand into downtown Albany.

Most major supermarkets expect to generate about $15 million per location, per year in sales1, and the average household spends about $4,000 per year on groceries2. Some simple division shows that 3,750 households would need to do all of their shopping at this store to reach $15 million.

treemap supermarket households downtown albany

Right now, there are about 200 residential units in downtown Albany, with a 97 percent occupancy rate. Even if we assume that all downtown renters did 100 percent of their shopping at the new store, that would still only account for 5 percent of what the store would need in sales. Downtown would be still be 95 percent short.

So any viable grocery store would need to entice many non-resident state/downtown workers to spend their lunchtime and grocery dollars here too -- and lots of them. For a sense of how many: The additional $14 million in store revenue could be captured if 3,500 non-residents changed their shopping habits, and began doing 100 percent of the grocery shopping for their household here.

But enticing non-residents brings its own complications. A grocery store would need to compete with local sandwich shops and restaurants for the at-work crowd by selling quality prepared foods for breakfasts and lunches. However, these offerings increase costs for the supermarket because prepared foods have a one/two-day shelf life versus more "stable" items. Anything not sold within that window becomes trash. Dedicating space to items with a 24-48 hour window in which to sell before replacements must be purchased makes achieving the necessary profit margins -- which are already tight in the grocery business -- much more onerous for a store.

So, unless the numbers change, chains such as Hannaford or Price Chopper are not likely to set up a full grocery store in downtown Albany, unless they are feeling philanthropic. It's not an ideal situation right now -- but there are other options.

Other possibilities

One solution can, and should be, to think smaller. This is not to be mistaken as "lower your expectations." Never. Rather it's about picturing a grocery store that fits well with downtown. The area is not in the position right now to open a superstore, but what about a small corner market, or a co-op? What about an entirely new financing partnership model to make something happen?

Habitat for Humanity Capital District and a large grocery retailer are currently in the midst of negotiating a cooperative grocery store arrangement for Sheridan Hollow. Think franchise model -- without the franchise fee.

As Habitat executive director Mike Jacobson enthusiastically told me of the model they're pursing: "Whoever returns to the urban market with the right model will inherit the earth."

If the plan comes together, it would work something like this: Habitat and the supermarket company would co-create a non-profit -- or a benefit corporation (a business that operates with a social purpose). The supermarket company would then design and stock the store (selling the inventory at a mark-up to the non-profit/benefit corporation) and train the staff. The store would be run by a board of directors from the community, and all staff would be local community members.

This arrangement is a low-equity-stake concept for grocery, with community members handling the operation of the store while being able to draw on the existing expertise of the grocery retailer. And it could be a win, both for Habitat's multi-use development there and the Sheridan Hollow neighborhood as a whole. As Habitat executive director Mike Jacobson enthusiastically told me of the model they're pursing: "Whoever returns to the urban market with the right model will inherit the earth."

This model is based on the unique situation of the Sheridan Hollow community, its recent redevelopment, and its undeniable potential. All of the special realities of time and place went into creating this model. And that's the sort of creative restructuring that downtown Albany needs.

An example elsewhere

elm city market new haven
The Elm City Market in New Haven, Connecticut. / photo: Amy Christensen

Let's look at what another city -- and one not unlike Albany demographically -- did to bring a grocery store downtown: New Haven, Connecticut, which is part Yale University college town, part low-income city.

A private developer wanted a grocery store to anchor a new residential redevelopment project3. The developer invited national and regional stores to occupy/invest in the space. All of them rejected the site, because the math did not support a grocery store downtown. So a co-op was formed -- the Elm City Market -- and after three years and more than 2,200 members, it's doing very well.

Co-ops have become the foot-in-the-door model for many mid-sized American cities which suffer from disinvestment and suburbanization -- like Albany.

What's next? Maybe something in the ESP?

downtown Albany from corning tower 2014-04-01
What's the right spot down there?

Speculation about the idea of scaled-down ShopRite in the Empire State Plaza concourse has been circulating recently. As someone who works in the plaza, and sometimes works hours that prevent a trip to an outside-world grocery store during busy season, this would be wonderful. Still, it probably will not get us where many people would like to be. This would probably be a store for the concourse connected to shop during the work week. In order to be of benefit to the greater downtown Albany neighborhood, the store would need to have weekend hours4, and would need to be easily accessible from the street, which could be a challenge for a concourse location.

The desire for a major retailer to move into one of the many vacant downtown Albany buildings and open a supermarket is understandable, but it's not realistic. Right now. We can either keep being frustrated by the reality, or we can start to have a real conversation about what can be done.

There will be significant challenges along the way. Any grocery store that invests downtown, large or small, will need to contend with narrow streets and large delivery trucks, with early morning deliveries and nearby sleeping residents, with Albany's existing tax structure, with the ongoing parking issue, and with the surprises you find along the way when rehabbing a 100-year-old building.

But it is possible if we start to think about our unique place, and come up with a unique model that will fit.

Alison Bates is an urban planner and city of Albany planning board member. She works for the New York State Senate doing fiscal analysis of infrastructure initiatives. She writes here in a personal rather than professional capacity.
____

1. Understanding the Grocery Industry. Financing Healthy Food Options Handbook: Implementation Handbook. By: The Reinvestment Fund. September 30, 2011.

2. Bureau of Labor Statistics. Economic News Release - Consumer Expenditures 2012.

3. There's a rumor that the city of New Haven told the developer something to the effect of, "We want a grocery store on the ground level of this building, and things will be a lot easier for you if you do this." But it's just a rumor. In any case, the developer was looking for a grocery tenant for the ground floor, below the new apartments.

4. I would be surprised if ShopRite planned to be open on weekends, but it sounds like nothing is set in stone with this possible store.
____

Earlier on AOA:
+ About retail in downtown Albany, and other local downtowns
+ Thinking about residential development in downtown Albany

Comments

Outstanding! Thank you AOA & Ms. Bates!

Great write up. Thanks so much Allison for explaining this issue.

Honest Weight was downtown's best shot. It's too bad they didn't go there.

Why do we want a "supermarket" anyhow? I work downtown now and I would much rather have a butcher shop, a green grocer, another bakery, etc... Any of these sorts of places would get massive "grab something for dinner on the way home" business without carrying the overhead of some monstrous and massive supermarket. Smaller independent food vendors are the direction I would like to see downtown going.

Also, the Shoprite on the concourse is prettying a done deal and from my foxhole it is a horrible idea.

This is great! As a lay-person, it's tough to know what the tipping point is for redevelopment into a more thriving 24-7 downtown (from a 9-5 area such as ours). It's appreciated that you took the time to lay out the numbers behind this part of the puzzle.

I'm in favor of grocery stores in downtowns. I think Price chopper has struck gold in Saratoga. Even Burlington with it's slightly higher end City Market is a great example. I just worry about a downtown grocery store being able to bring in enough people to sustain it. Our particular downtown is fractured geographically, with some people living at each end aND a more recent growth of condo couples in the middle. I just wonder if there's enough people. That is all.

I'm all in favor of this though.

Hilarious, I had just posted over at TU that a downtown Whole Foods would be a great addition (although understanding that economically that wasn't going to happen, but hey faceless commenters 'gonna faceless comment).

Five minutes later, pop over to AOA and they have an incredible analysis on urban/downtown supermarkets. Well done, nice overview Allison

Excellent. Thank you for posting. The Co-op could do a satellite location downtown, but the prices may not bode well for all downtown residents.

You do know that Price Chopper and Shop Rite deliver, right? Why is that never brought up when it comes to downtown living? There used to be smaller grocery stores downtown see here:

https://www.flickr.com/photos/albanygroup/11468214506/in/faves-alaviano/

https://www.flickr.com/photos/albanygroup/11468124994/in/faves-alaviano/

And here is one where the south mall arterial is now:
https://www.flickr.com/photos/albanygroup/11450873054/in/faves-alaviano/

What can we learn from the past markets that got bulldozed?

There is a downtown grocery store. Price Chopper on Delaware Avenue. Unfortunately they do little to attract residents from the nearby neighborhoods like Hudson Park and their store experience is dismal and the offerings are as well for the most part.

There is a huge pile of money in Hudson Park and Center Square that apparently the business people at Price Chopper have no interest in pursuing. That money currently goes to Central Ave and Honest Weight and very shortly will be going to Whole Foods. Interesting approach by Price Chopper management. That Price Chopper is a punchline to many a joke in the area.

I'm sure if you compare the del ave Price Chopper to their one in downtown Saratoga, the couldn't be more different.

Also, it doesn't make sense to look at downtown albany and say there are 200 residential units. What about Ten Broeck Triangle? And the Mansion District? And if you put a viable store in downtown you will attract Center Square and Hudson Park as well. That is a lot of people. More than 3500, I'm sure.

The money is there. Even in north Albany. That new gas station downtown in a completely deserted part of downtown across from vacant buildings had to add a bunch of high end beers to their offerings because that is what their customers wanted. And now they just opened up a Wine and Liquor store. Now, I know Albanians are known to prefer alcohol to food at times, but if that guy is moving expensive beer in that location, it would seem that downtown could support some food stores. (Times Union did a store about this downtown store but I can't find the link)

It seems the biggest issue is management with a suburban mindset. My household spends a ridiculous amount of money on high quality food and drinks. And we can walk to the Price Chopper on Delaware Ave. But they don't offer any of the beer we like to drink. And we can probably get 10% of the items we normally buy at that store. Why is that?

I realize it's not exactly *downtown* but there is the Delaware Ave Price Chopper within walking distance of Center Square. When I lived in the neighborhood I regularly walked there to pick up a few items. It was pretty crummy then (I would do my "big" shop at whatever store Hannaford used to be--Shop n Save I think...) and I don't know if it's been renovated. Based on the insight of this article it seems more realisitic to convince Golub to improve that store than to get a retailer to start from scratch.

Did I miss something? Does the Price Chopper on Delaware Ave not count? I understand that location doesn't help Sheridan Hollow residents, but let's not leave it out of the discussion entirely. I will admit it's not the most amazing supermarket, but I shop there several times a week, and I live in the Mansion neighborhood. I know that a lot of my neighbors shop there regularly too.

I am confused. Is the Price Chopper on Delaware Ave near Lark Street not considered downtown? I always thought that was the heart of downtown.

"But enticing non-residents brings its own complications"

All of the people who currently live in downtown and the neighborhoods listed above currently do 100% of their shopping as "non residents" based on this description? They have to get in their cars and drive somewhere to shop. Or take the bus.

I would wager that a lot more people live in close proximity to the Empire State Plaza than live in close proximity to Honest Weight or the new Shop Rite. So how do they entice people? Why is it that suburban stores can entice people to travel many miles but a downtown store is held to a standard where everyone has to live within a few blocks of it?

We need some new thinking.

The Delaware Ave Price Chopper is a joke, and is in Center Square, not downtown. Downtown Albany is in the middle of trying to redevelop itself in a way that is different from Center Square, and this article addresses that point. Center Square has restaurants that are open on the weekends, whereas downtown Albany is a 9-5 area. They are on different paths, and downtown needs to be brought along in a big way. A grocery store would help with that, but as Alison points out, will take some creative thinking.

@Chopper, the mention of what is traditionally called "downtown" units is relevant for exactly this point. I took this to mean that the immediate market is not where it needs to be at this time, and that's just where downtown Albany is. She points out that people who don't want to drive to strip malls to shop would want this store too, which I took to mean the potential to draw Center Square residents who refuse to go to the Delaware Ave Price Chopper (me included, that store gives me the creeps).

All, Center Square is NOT downtown Albany. Albany is divided into many neighborhoods, including pine hills, the mansion district, the south end, and so forth. Each neighborhood is different and has a very unique situation. This article is about the downtown Albany neighborhood. I read comments regularly, here and on the TU, saying that a grocery store should rehab a downtown space. This article is about that conversation, and not the city of Albany's grocery market overall. Downtown. Not Center Square. Can we move on now and think about what we want to happen downtown?

"Center Square has restaurants that are open on the weekends, whereas downtown Albany is a 9-5 area. "

I live in Center Square. And regularly go to restaurants downtown on nights and weekends. Pump Station, City Beer Hall, Hollow Bar, Merry Monk, McGearys, Old English Pub. And I walk there.

I think it is critical to include the surrounding neighborhoods in a discussion of ways to support a downtown grocery store. If you don't, than you have 200 residential units and it is a non starter.

Walking to bars is not the same as walking to buy all your groceries and carry them back home. One is responsible and nice, the other is drudgery. This piece clearly talks about capturing surrounding neighborhoods, and breaks down the numbers necessary. Once you get further away geographically, then your ability to capture that market decreases, and a whole lot of people who don't live in the downtown neighborhood would need to shop here (if we're talking about a supermarket), which is why the model doesn't hold water. Heck, even Honest Weight decided not to move downtown, despite a huge push from the community to do that. Allison is saying that the immediate market isn't there on it's own, but there is potential for the market to capture people who don't like driving to Colonie and other places for groceries (mansion hill, center square residents), but those numbers are still very large, and not realistic with a supermarket model.

If Price Chopper wanted to, they could rehab the Delaware Ave store and capture more business from us who live in Center Square, but avoid that place like the plague. But they don't, because the costs don't justify the renovation expense to them, and that store already exists!

I recently moved here from Cleveland and still read my home news. This story ran recently about a grocery coming to downtown:

http://www.ohio.com/news/local/heinen-s-hoping-to-transform-downtown-cleveland-with-new-grocery-store-1.460519

If you're like me and don't actually click links in comment sections often, just know that they say that the rule of thumb is 25,000 residents in the immediate neighborhood for an urban store. Urban stores do use different models than non-urban stores.

As someone who has watched Cleveland grow and tick upward, I'd say Albany can do the same by doing something new. This was enjoyable to read, thanks to Allison for putting this together for us.

200 residential units in downtown Albany

You must be kidding. This must be off by an order of magnitude if not two orders.

Your "200 residential units" is not accurate. The downtown census tract has 1,169 people. And this does not include the Ten Broeck Triangle which has about 300 residents. TBT is fairly middle class. I don't know why people are talking about a full-blown supermarket. I don't think that's realistic at this point. However, it would be great to have a nice smaller, limited-offering market with meat, produce, and dairy. Census numbers are below.

http://projects.nytimes.com/census/2010/map?ref=us

Wonderful article! Would love to know 'econometrics' about revitalizing Pearl Street - i.e pedestrian walk, bring in retail, incentives for small business owners, etc. - why can't Albany become an incredible small city like Burlington, VT, Alexandria, Va or Madison, WI.

From the city that has developed all things progressive and successful:

http://mystreetgrocery.com/about/

Hint: It's a mobile grocery store and it's awesome!

Amen Jennifer Amen. The main reason, beside taxes and zoning, is the complete lack of awareness on behalf of the people around here that small city life can be great. The minute people around here encounter the word CITY in conversation they think urban blight, crime, smog, pollution because that is all they know. There needs to be an awakening of the mind here that I don't think will ever happen. When I see people around here thrilled to take a horse ride around Stuyvesant Plaza parking lot at Christimas time or outdoor dining in the parking lot of Colonie Center, I see there is no hope for the future! People here actually like Mainstreet Disneyland more than the real thing! It is beyond my comprehension but it is what it is!

Paul, Census tract 11 has 1.169, but the barriers are very much not the downtown neighborhood. The census tracts are a Federal designation, and different than the on-the-ground neighborhood divisions that we have. Which is why I didn't use that data.

The 200 number is from here:

http://www.downtownalbany.org/living-downtown

I also mention that it would take 3,750 households total. This includes mansion hill, center square etc. The point is to show what the draw from surrounding locations would need to be for a traditional supermarket to work. Of course, if households are not doing 100% of their shopping at this theoretical new store, than your number increases from 3,750 upward. That's really the take away, and there was never an assumption that people from other neighborhoods would not go here. I live in Center Square and would love to not have to go to Central Ave for anything, especially a weekly grocery shopping!

The burden from surrounding areas is so high that the conversation becomes much more realistic if we think of other models than just traditional supermarket. Major grocery store chains are in the habit of looking at the immediate neighborhood numbers for an urban store, and when they see 200 units, they will see the conversation as over. The have a different metric for urban locations, and that's just the reality of their business model. We know otherwise about potential demand, but to me, that means reshaping the conversation to talk about a co-op model or a unique financing structure like the Sheridan Hollow example.

Wow it's always surprising how many people can miss the whole point! Great article Alison!

This article is referring to the downtown business district, the traditional downtown...I'm not sure how so many people fail to grasp that.

Obviously there's already a (terrible) grocery store in Center Square. That isn't downtown. Obviously the South End and Ten Broeck have residential units. They aren't downtown either.

Downtown business district - roughly, the river to the east, Eagle to the west, Clinton to the north and the 787 arterial to the south.

Here's a map:

http://www.downtownalbany.org/about-bid/district-boundaries

All the yes to this superb number crunching! Now I know why Whole Foods hasn't taken up one of the open buildings downtown despite my prayers.

@ BS - There are plenty of people aware that small city life can be great. Just look at all the comments on this post and on AOA in general. What's missing is more people actually opening up small businesses downtown. I see many people posting the ostensibly simple solution that we just need more small shops and grocers in a walkable distance that are open on the weekends and then POOF! Albany is transformed! Well, go ahead. Open something.

I'm not trying to be a troll about this, but I'm tired of everyone professing about what others have to do to make their fantasy of Albany become a reality. What you need is more people DOING something.

And, finally, everything doesn't have to be distilled down to some black and white, us vs. them argument. Stuyvesant Plaza doesn't have to fail for downtown Albany to thrive. Look at Saratoga Springs, which has a thriving downtown but also surrounding shopping centers. Both can exist!

@BS. Oh my god, I'm not only one who thinks sitting out in the Colonie Center parking lot (essentially what it is) at The Cheesecake Factory will never substitute for a real, urban sidewalk cafe! Thank you.

Realizing it's not really relevant to the article, I'm going to respond to the Delaware chopper comments.

I live near that store and shop there regularly (not exclusively) because I like the convenience. For my neighbors who refuse to shop there under any circumstance, it is VERY unlikely that there is anything Price Chopper could do to satisfy them. Their standards are simply too high. The store would have to be completely bulldozed and rebuilt. It would have to be twice the size so more land would have to be acquired, which would mean destroying historic buildings. The same people would fight this to the bloody end.

These people will come up with every excuse they can find to explain why they refuse to shop there, but when you talk to them, you find that while they may not admit it to themselves, in reality there are a few true reasons. One or more of these usually applies:
1- Xenophobia/Peniaphobia. They don't like shopping near people who are different and/or of lower social class.
2- Luxury/entitlement. They feel they are entitled to a certain shopping experience. They want the best and they have cars and can afford to go wherever they want. They also may want the best "deals" so they "need" to waste gas driving from one big store to another "saving" a few pennies at each one.
3- Laziness. This applies to a smaller group, but they do exist. Lazy people would not be caught dead walking with groceries If they're getting in the car anyway, they'll drive 10 more minutes to get to a larger store. These are the people who will get upset when they get ticketed for parking in front of a fire hydrant "just for a few minutes" to unload their groceries.

"...A large proportion of the people shopping at the Delaware Avenue store are low-income Albany residents. It’s almost certain that Price Chopper knows what proportion, because those Price Chopper cards do more than give customers a discount on their groceries. As with similar discount cards used by most grocery chains, they also tell Golub how many people from any particular zip code are shopping at which store."

That's a quote from an excellent article in the Metroland in '08. See the full article about the history of the Delaware Ave Price Chopper here: http://metroland.net/back_issues/vol_27_no08/features.html

If you choose not to shop at the Delaware Ave Price Chopper, you're choosing to keep it the way it is. Until they see more 12210 zipcodes coming into the store, it's not going to change.

I agree with "argh" 100%. I live on State and Lark streets, and I shop at the Delaware Ave Price Chopper for convenience . It's there, in my neighborhood, and I don't have to play musical chairs with my car when I get back with my groceries (try to find a parking space in the neighborhood after 9pm).

Who owns the land that the Delaware ave Price Chopper sits on? Neil Golub. The Golub corporation pays him rent every month, so he gets his money. Isn't that what business is all about? Doubt if he cares much about the shopping experience the neighboorhood residents have.

The old Jillian's building is still vacant. Hint, hint, someone with more investment capital than me.

A local grocer is about to open in downtown Rochester, where a similar conversation has occurred for years. This neighborhood of Rochester is much more vibrant than downtown Albany - more like if you took the Delaware Ave business district, complete with the Spectrum, Mingle, New World, and some retail, and put it on North Pearl Street near the Palace. Of course, DANA has Cardona's, which is a great neighborhood grocer.

http://www.hartslocalgrocers.com/about/

Re: Del Ave PC

I have lots of friends who live in Center Square and have had to make many a run there to grab last minute items. I used to run a non profit in the neighborhood too and would head there if we began to run low on snacks or other necessities during events.

It was filthy.

Look, I get it. Low income, college kids with no cars. That's your market. It's still disgusting to shop a dirty store with rotting produce on the shelves, which has happened to me there. Yes, it was several years ago and maybe management changed, but it turned me off from Price Choppers for years. It affected my decision on where to live when I relocated there. As a parent looking at apartments for my kids, I wouldn't let them move into that neighborhood based on the grocery store. It shows something is wrong there. Knowing the area, I know it's nice but a family from out of town? Not likely.

And yeap, while this is not a downtown comment, I think it's critical to plan for a downtown market. Failing to do so will just either result in an empty building or worse, the Del Ave Chopper.

Good article to get a discussion going on the merits of having a supermarket downtown. Whether luring a market to the downtown area is economically viable, is open for further research and discussion.

I particularly liked Alison's reply to the commit offered by "Paul" where she provides additional information clarifying comments is her article.

Succinct, cogent, and informative article.

RDB (Regional Planner, by education)

Regarding the possibility of a Shop Rite at Empire State Plaza - it confounds me how any of the ESP underground stores survive - there is no indication of this underground mall from the outside street level. I'm not saying that we need big, neon signs, but some kind of tasteful indication that there are places to shop and eat inside. You can't simply rely on the state employees and the lobbyists to support a grocery store or anything else. The neighborhood and passers-by need to have some sign that the underground shops exist. It would be interesting to know what percent of the neighborhood residents move every year - are the apartments rentals or permanent homes? The shops need to connect with new customers all of the time.

Anyone ever been to the Lark Natural Food store? It's great! people should shop there more.

@Grif, I'm late to the game commenting on this, but was going to suggest that Lark Natural Food is an excellent example of a small scale grocer that can be replicated down town. When I don't have time to get off the bus to stop at the Honest Weight Food COOP, I'll stop here while waiting for my next bus on Lark. For a tiny space, they have a comprehensive selection of many of the natural, healthy brands offered at the COOP. Yes, the produce section is tiny and they don't sell a lot of dairy/meat products, however, you can find a whole lot here in a pinch.

@argh, I pick stuff up at the Delaware Price Chopper occasionally when I’m in the area, but completely understand why anyone with the means to avoid it might. It’s not the size/ selection that’s the problem, it’s the verbal harassment from other shoppers/ loiterers, the long lines, and the overworked employees. I see folks within walking distance take the bus to the Hannaford in Delmar instead of going there, despite the enormous hassle of busing with groceries (and often little kids). While snobbery may be part of the problem, it’s not the largest one.

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