Grocery Outlet's opening in east Portland brings promise to an area lacking supermarkets
Mar 09, 2013 (The Oregonian - McClatchy-Tribune Information Services via COMTEX) --
Can a grocery store turn around a community Can Twinkies help
A crowd waited outside Feb. 28 for the doors to open for the first time at the new Grocery Outlet Bargain Market at Southeast 122nd Avenue and Division Street. Some came to celebrate the arrival of a new retail option in east Portland. Others came because a TV news report the night before had touted one very special product that would be on the shelves when the first customers filed in: Twinkies, that all-American snack cake with an uncertain future after its maker, Hostess Brands, went belly up last year.
"Right now I'm just happy that we have a good crowd," Mike Shaffer, who with his wife, Tiffany, owns the store, said between bagging groceries and shaking hands with Grocery Outlet executives. "You get people in the door, you show them what you have, and they'll keep coming back."
Five groceries have closed in the past three years in east Portland, including the Albertsons that occupied the anchor spot in this Division Street shopping center until late 2011. Neighbors have spent years fighting for better access to public services such as sidewalks, parks and libraries and more recently have begged city planners and development officials to help them lure more shopping alternatives.
The new store sits at the northern edge of what the U.S. Department of Agriculture describes as a "food desert." It's one of five poor, grocery-deficient tracts the federal government has identified in the city and east of Interstate 205, almost a third of the total number of food deserts in the entire region.
Demographics drive where groceries locate, a business reality that presents a long-term challenge for east Portland and other food deserts. Neighborhood activists dream of attracting the kind of high-end or big-name retailer that can woo other businesses by its mere presence, say a New Seasons or a Trader Joe's. But those sorts of companies, which spend millions of dollars on new stores, aren't going to expand where preliminary fiscal models show a low return on their initial investment. East Portland is denser than most other parts of Oregon, but the median household income in the new store's census tract is $20,000 lower than the region as a whole.
"If I'm being honest, I really want a Trader Joe's, but I know how they decide these things," said opening-day shopper Paula Stiefbold, who lives near the Portland-Gresham line. "I am glad this is here, though. I shop at several different stores depending on what I need, so more competition is a good thing for me."
Grocery Outlet, a Berkeley, Calif.-based company, competes with WinCo and Walmart for the same pool of discount-minded shoppers. The chain buys items that are being discontinued, repackaged or otherwise altered in some way -- think Christmas-themed soda cans in January, for example -- and offers the closeout goods at steep discounts. For customers, that means a new shopping experience on each visit, which can be fun or frustrating depending on how wedded your kids are to certain brands or types of food. For company executives, the model works: The chain is adding about 20 stores a year.
"What we're seeing right now is that the two ends of the spectrum -- discount grocers and your higher ends, your New Seasons or Whole Foods -- are both expanding," said Bill Coyle, Grocery Outlet's fast-talking vice president for real estate. "The middle-range stores -- your Albertsons or Safeway -- they're getting nipped at from both ends."
Two years ago Mayor Sam Adams tasked the Portland Development Commission, the city's economic arm, with launching a "grocery store initiative" to help bring more markets to poor parts of the city. He noted that 40 percent of Portlanders live more than a mile from a market, which makes walking or biking to the store difficult.
But the city initiative wasn't involved in landing the new Grocery Outlet, and Adams' grocery store project is essentially dead, said PDC executive director Patrick Quinton. Instead, city economic development officials say they're focusing on smaller efforts that will bring more food options to specific neighborhoods and demographic groups, such as their work to help bring a Latino-themed market called the Portland Mercado to Lents.
Grocery Outlet executives found the Division Street location through a commercial real estate agent in town who suggests potential sites. They're leasing about half the space Albertsons occupied. A new gym took the other half.
"This is going to be a wonderful area for us," Coyle said. "I like the density, and I think there are a number of people living around here who are probably frugal shoppers. You're going to see other empty storefronts get occupied because this space is occupied with businesses that will draw a regular flow of people."
Shaffer, a longtime Safeway manager, sounds as if he understands why a who's who of Portland leaders showed up at a ceremonial ribbon-cutting for the store. He's talking about sponsoring Little League teams, donating to local food banks and generally making his store an active participant in community life.
"I know some people would like a New Seasons or a Trader Joe's, but I hope a lot of people come to think of us as their neighborhood market," he said. "We want to make things better, more neighborly, by being here. We want to make things happen."
On opening day things were certainly happening: The market's glass doors slid open at 8 a.m. The last box of Twinkies disappeared at 8:06.
-- Anna Griffin
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