As consumers turn against Big Box stores, supermarkets feel the heat

 

The death of the Big Box store (think Wal-Mart) has been widely predicted, as for instance here, here and here.

Just about every major trend we’re following right now bodes poorly for power center retail,” says the Business Insider article. Those trends include the facts that “Americans are driving less than they have in decades. Populations are flocking to smaller, urban communities over sprawling suburbs. And consumers in their 20s and 30s increasingly prefer small, local shops to big-box retail.”

It took a little longer for this rejection of the Big Box concept to spread to the big supermarket, but now, it has. The U.K. last year saw its first decline in supermarket sales in two decades, and America isn’t immune: “U.S. supermarkets are stuck in time-warp,” USA.com announced, adding, “The bland midmarket, hi-lo, be-all-things-to-all-men strategy is not working.”

Speaking of Mid-Market and supermarkets, today’s San Francisco Chronicle has a front page article, “Trying to mimic Ferry Building on Mid-Market” [link not yet available], that tells the story of how a big supermarket, Market on Market, faltered, precisely because it tried to “be-all-things-to-all-men.” A little background: The Mid-Market stretch of S.F.’s Market Street has for years been a sorry spectacle of homelessness, drug dealing, prostitution and low-end stores. That all began to change when San Francisco persuaded Twitter to headquarter there (in exchange for controversial tax benefits). Now, Mid-Market is becoming a yuppie haven: rents there are going up as fast as anywhere in the city. Mid-Market had never had a nice supermarket. So the owners of Market on Market thought the time was ripe to open one.

Turns out their assumptions were wrong. Those young tech workers don’t want a big supermarket. They want what Whole Foods offers: ready-to-eat food, often impulse-driven, and small, specialty cubicles run by independent purveyors: a pizzeria, ramen shop, créperie, sushi bar, fish monger, tea shop, microbrewery and so on. They want, in other words, to feel as though they’re in the marketplace of some old European village. So that’s what Market on Market will now offer them: similar to what famous Ferry Plaza has been offering shoppers for many years.

San Francisco being the trend-setter it is, this movement likely will spread around the country, first to other urban areas and then to hipper suburbs. It’s reflective of the same yearning for authenticity and quality we see in the wine industry and the consumer’s preference for wines of terroir, connected to the land and owned by a family—wines with stories that make people feel more human. I know that, speaking for myself, it’s almost unbearable to shop at Safeway anymore. The place just seems like, well, it’s stuck in a time-warp from 1965. Whole Foods is much more in my comfort zone (although it’s more uncomfortable from a dollar point of view); and Rockridge Market Hall is even more of a trip for me: I can’t exactly explain the exaltation I feel when shopping there, but where Safeway feels pedestrian, Market Hall feels like a trip to the Marché International de Rungis without leaving Oakland.

It always surprises me to see so many young people thronging my local Whole Foods: I wonder where they get the money. But they do, and whatever their financial situation maybe, it’s clear that they’re voting with the wallets for higher quality food, the feeling of being philosophically and organically connected to what they put into their bodies, and a more welcoming shopping experience. The wine industry could learn from this example.