Downtown grocery stores ride a wave of consumer hunger for convenience

Consumer demand for convenience and value is driving big changes in the grocery industry — from the availability of prepared meals in the stores to the location of the stores themselves.

"It's got to be convenient," said Jean Kinsey, a professor emeritus from the University of Minnesota. "That's one of the things that putting stores like this in the center city is speaking to: the convenience of having high-quality food, or high-value food, fairly close to where a lot of people are living."

Kinsey and David Livingston, a supermarket location analyst, joined The Daily Circuit to talk about the new Lunds store coming to downtown St. Paul and trends that favor high-end supermarkets. People are willing to pay more, they said, for better products and shopping experiences.

"Sometimes it's not so much price as value," Livingston said. "If you can go to a higher-priced supermarket and feel you're getting a good value out of that store, sometimes price isn't as important."

"Lunds, Byerly's, Kowalski's, Whole Foods, Trader Joe's," he said. "These stores obviously are not price-competitive, but they're very successful. And they're successful because they offer the consumer a good experience when they shop the store."

Kinsey said the rise of high-end grocery stores "isn't new. We're just seeing it increasing. And now we're seeing it in the Twin Cities, where these upscale stores are moving into the center of the city."

"One thing it tells us is that there are people in the center of the city," she said. "We've had a rather robust development of condominiums, both in Minneapolis and in St. Paul, over the last few years, and that brings a lot of people living in the core of the city. They need to have groceries, just like everyone else, and it provides a market for the stores to operate in."

A caller in Blaine, Cheryl, said she was motivated more by quality than the desire for a nice experience when she chooses a store. She is particularly bothered by produce that isn't fresh. "You would never walk into a Whole Foods and see strawberries that are moldy, out there for people to buy."

Kinsey agreed: "In the produce aisle, [quality] is particularly important. Most stores now, when you walk in, produce hits you first. So that's important."

Livingston said "produce is probably the most important department in the store." He drew a distinction between the canned and boxed goods in a store's center and the fresh food on the store's perimeter.

"People are going to these upscale stores and particularly focusing on the perishables," he said. "See, anybody can compete on the center store. A can of Heinz baked beans is going to be the same in Walmart, it's going to be the same in Kowalski's. If you're a center store shopper, Target or Walmart, you're going to be fine there. But when you come to the perishables, that's where the big differentiation is."

Some people, he said, shop for canned goods in one store and go for produce to another. But Kinsey suggested that convenience works against that kind of cherry-picking.

"Let's say you're shopping in an upscale store," Kinsey said, "and you're in the cereal aisle. You know that box of national-brand cereal is probably 25 cents more there than it was at a price-point store. But is it really worth your time to get in the car and drive over to that other store for a box of cereal?"

The downtown St. Paul Lunds will be part of the Penfield development at 10th and Robert Sts., near Interstate Hwys. 94 and I-35E. The retailer hopes to build on the success of other new Lunds locations in downtown Minneapolis and across the river in Northeast Minneapolis.

Writing in MinnPost in 2008, Steve Berg described the St. Paul Lunds store as a "very big deal" and observed that the Northeast Minneapolis Lunds had been a great thing for him and his neighbors. "There's something special about a supermarket — especially a high-end store like Lunds — coming into a developing urban community. For residents carving out new lives in and among old factories and warehouses, it's a signal their neighborhood has finally arrived. And for potential newcomers, it's an invitation of sorts to move back into the city."

LEARN MORE ABOUT URBAN GROCERY STORES:

• Urban grocery: an important step in neighborhood revival
In 2006, three blocks away from our loft building, Lunds opened a new store at University and Central Avenues S.E., the first of three upscale supermarkets slated for downtown Minneapolis. Immediately the store became the focal point of everyday life. Lunds is the place where you run into friends in the frozen foods aisle, chat with the cheese lady and trade jokes with the butchers. Aside from the astounding convenience of buying groceries a short walk away, having a human-scale store so close at hand makes you feel grounded and comfortably at home. The massive anonymity of suburbia — and the need for all that driving — is replaced by the realization that the best small towns are sometimes in big cities. (Steve Berg, MinnPost)

• St. Paul has an appetite for upscale, and Lunds plans to deliver
The 27,000-square-foot store at 10th and Robert streets will carry more than fresh-squeezed orange juice and French cheese. It carries St. Paul's hopes for a livelier downtown and a spur to future growth.

"It's a community anchor point," said Matt Kramer, president of the St. Paul Area Chamber of Commerce, who cites studies about "the importance of a grocery store in creating a sense of neighborhood and a sense of place." (Pioneer Press)

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