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Sunday, 12 April 2015 22:00

Meijer has considered urban stores ‘but we’re not there yet,’ executive says

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Walker-based Meijer Inc. has no current plans to shift away from its traditional big-box format in favor of smaller stores located in urban areas.

Despite many of its larger national retailing competitors turning to stores with smaller footprints in urban neighborhoods or even downtown areas, one Meijer executive says that option is not on the table for the company in the immediate future, but it has been discussed.

“We talk about that, but we’re not there yet,” said Erik Petrovskis, director of environmental compliance and sustainability at Meijer. “I won’t even speculate (on a timeline), but we have looked at that as an option.”

Petrovskis spoke about the company’s sustainability initiatives at a Michigan’s Great Southwest Sustainable Business Forum event held in late-March in St. Joseph, Mich.

His comments come as urban planners and developers continue the years-old debate of how best to attract a grocer to locate in the central business district of cities such as Grand Rapids, which is in the midst of a residential building boom. More than 20 multifamily apartment projects are currently under construction or have been proposed in downtown Grand Rapids and its near-neighborhoods, totaling more than 1,400 units. (See story on opposite page.)

Developers and local officials have long discussed the southeast corner of Wealthy Street and Division Avenue as a potential location for a grocery store. Grand Rapids-based nonprofit Inner City Christian Federation, the site’s developer, has spoken with grocers about locating there, sources told MiBiz. However, it was not clear if Meijer was one of the companies who had been considered for the location.

Likewise, a spokesperson for Byron Center-based SpartanNash Co. recently told MiBiz that the grocery chain does not currently have plans to develop urban stores across its footprint.

But even if Grand Rapids were to land a food retailer, just one grocery store is likely not enough to serve the entire downtown market, Rockford Development President Kurt Hassberger told MiBiz for a previous report. Hassberger, whose firm has been active in the downtown area for years, said that people will only walk so far to get groceries, meaning that several smaller stores will need to be spread across the city to best serve residents.

By comparison, current designs for Meijer superstores call for approximately 190,000 square feet of space, and the facilities are typically located in highly-trafficked suburban retail corridors, similar to many of the company’s big box competitors.

But lately, some of those national rivals have been experimenting with significantly smaller store designs.

Last summer, Target Corp. opened its first smaller, urban store — dubbed “Target Express” — in 20,000 square feet, according to a report in the New York Times. Target has since opened four more Express locations.

Target’s first Express store opened in Minneapolis — where the company is based — in the ground-floor retail space of a new apartment building. Target executives cited the increased demand from urban areas as the main driver behind the smaller format. The stores carry a much smaller selection of items, and inventory is typically geared toward the specific area surrounding the store.

Similarly, Wal-Mart Inc. has tested smaller footprint stores, largely as a way to compete with dollar store competitors, according to a report last summer in Forbes.

In recent years, Meijer has also experimented with smaller formats, including a 102,000-square-foot retail store that opened in 2010 in a Chicago suburb. Unlike other Meijer superstores, the smaller format — about half the size of a traditional Meijer store — is mostly focused on groceries.

While Meijer may not be considering small urban stores at the moment, the retailer is paying attention to corporate sustainability efforts, Petrovskis said during the event.

The company has focused in recent years on decreasing energy use, better managing its logistics and building all new stores to Leadership In Energy & Environmental Design (LEED) standards. However, it only certifies one store a year, Petrovskis said, largely to make sure that Meijer is keeping up with the standards.

“Our design teams found that LEED provided a pretty good framework for doing what we were already doing,” Petrovskis said. “When we made a conscious decision to build our stores to LEED certification and criteria, we didn’t have to realize some big change in the construction budget or big changes in the way we do business. … This is really nothing new to us.”


Read 4443 times Last modified on Monday, 13 April 2015 11:08

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