31 May The market for a market – Why downtown wichita doesn’t have a grocery store and what it would take to get one
Ask just about any Wichita resident what they feel the city is missing, and a downtown grocery store is likely high on their most-wanted list.
New development activity in recent years has brought thousands of new apartment residents and office workers to Wichita’s core, leaving many wondering when and where a grocery store might follow; the closest supermarket with fresh produce is about two miles from the city center.
“When I give a presentation, the No. 1 question is, ‘When is Wichita going to get a grocery store?'” said Jason Gregory, who is executive director of Downtown Wichita, an affiliate of the Greater Wichita Partnership.The short of it is that downtown Wichita is closing in on the threshold of people necessary to attract a grocery operator, local leaders say.
But urban centers present unique challenges for the traditional big-box chain — predominately the logistics of delivery — and that’s only compounded by the rise in grocery pickup and delivery heralded by the Covid-19 pandemic.
“People have looked at (a downtown grocery store) for years, and for different reasons it didn’t come to fruition,” Gregory said. “I can tell you that people are actively looking at it right now. It’s just making it work and finding somebody, an operator, that’s willing to take that risk.”
It’s all about rooftops
About $1 billion in private and public investments in downtown Wichita in the last decade have resulted in several new office and apartment buildings that bring traffic to a once-dormant area. There’s now a total of about 4.8 million square feet of office space downtown, and at least 23 new residential properties have opened in the last 10 years, Downtown Wichita data shows. Among the newest, and largest, apartments:
- 240 units at ReNew Wichita
- 204 units at 225 Sycamore
- 202 units at River Vista
- 106 units at Colorado Derby
- 86 units at The Lux
“Every project that we build down there, that adds to the sustainability of something like (a grocery store),” Gregory said. “I know 100 (residential) units doesn’t sound like a lot, but each time you add another 100 units or 75 units, that adds to the viability.”
All told, Downtown Wichita estimates roughly 3,300 people live within the central business district based on the most recent occupancy and population data. But Gregory said big-box stores are typically looking for around 5,000 to 6,000 people. Brands themselves, though, generally keep specific real estate decision-making close to the chest.
But when it comes to site selection, Zach Zerbe, a sales associate at Landmark Commercial Real Estate, says retailers target food deserts — and there’s 44 square miles of food deserts in Wichita. That means there are other, potentially higher-density communities competing for a grocer’s attention.
“Every avenue toward getting a grocery store that I’ve ever approached is always the number of rooftops in close proximity, so it’s the number of residents that live down here, not necessarily the office number,” Zerbe said. “And so we’re literally just data on an Excel spreadsheet, and the math doesn’t work.”
Real estate challenges
Beyond a certain number of residents, grocery stores generally require at least some close and convenient parking, along with dock access and a delivery route that can support semi-trucks.
That’s where downtown urban areas often come up short.
“The logistics component is a big driver,” Zerbe said. “The ability to deliver — we have a lot of really cool architectural buildings in downtown, aesthetically, we’re fine — it’s just the logistics of getting the deliveries.”
It was the only reason a grocery deal fell through at the site of what is today the Spaghetti Works District, the new mixed-use commercial building at Naftzger Park, said Brad Saville, Landmark’s founder and CEO.
“Certain contractors were involved, and a really cool grocery store from Kansas City that I won’t mention was involved, and then a local wealthy person was involved,” Saville said, “and they basically wanted to tear up these plans and do this cool grocery store here.
“We could not get the truck path to work, because it’s like a 60- to 70-foot semi.”Saville said the store would have had to open a miniature distribution center nearby and use smaller box trucks to deliver product, which only complicates the logistics and wrecks the return on investment.
Downtown Wichita is also surrounded by four QuikTrip locations — one in each direction — that have evolved to closely resemble grocery stores. Gregory said around 10% of grocery sales are convenience-type items that shoppers can often find at a QuikTrip.
“That makes it really hard when the margins are so thin in the grocery business altogether … if they’re already having to start at a 10% to 15% disadvantage because somebody’s already undercut you there,” Gregory said.
Then there’s the reality that almost every Wichita resident owns a car, Gregory said, even the ones who live downtown and are just as likely to drive two miles to the closest supermarket as the ones who live in the suburbs.
“Most people, wherever you work or live, you’re going to shop primarily at the grocery store that’s closest to where you live,” Gregory said. “So even though those people work downtown… they’re going to still do that at the closest Dillons or wherever is near where they live.”
What kind of grocery store Wichita could get
With big-box grocers likely out of the question for downtown Wichita — at least for now — it’s a more likely scenario that Wichita will see a private developer or landlord take the initiative and open a local store themselves as part of a mixed-use project.
“It’s going to be somebody that wants to take the risk and somebody that is willing to underwrite that risk,” Gregory said.
Opening a grocery store is also an expensive initial investment, Gregory said, involving tenant finishes, freezers, coolers and inventory. In the opening of urban grocery stores, it’s often the case that subsidies or incentives are involved, or a local, family-owned store saw the opportunity within a food desert.
Wichita’s peer cities, for example, have taken a similar path. In Kansas City’s Power & Light District, the family operators behind Cosentino’s Market opened a location in the downtown Power & Light District. Downtown Omaha has a Wolhner’s Neighborhood Grocery & Deli. And in 2021, Tulsa approved the use of tax revenue bonds to incentivize the opening of a mixed-use project that includes a downtown grocery store.
“They’re almost always a local (store), it’s not a national, and they’re heavily subsidized,” Gregory said. “That could be that developer who’s just saying, ‘I want that amenity as part of my mixed-use development,’ or ‘I want it as a value-add, and so I’m willing to write off the rent and I’m charging it to the others.'”
Saville said owners of some of the vacant office buildings in downtown Wichita want to bring in a grocery store “in the worst way,” but the trouble with one-off stores is that they lack buying power, he said.
“If they don’t have the buying power and the suppliers, they’re not going to be able to keep up on everything,” Saville said.
It’s also likely that a downtown store in Wichita will have a smaller footprint and a scaled-back inventory, with grab-and-go-type items to attract the daytime office worker. “If they can locally source a lot of their product, if can you connect with the farmers’ markets and connect with the suppliers regionally, that’s a much better deal for them,” Gregory said.
Where could a downtown grocery store open
Grocery store locations require high-density areas that have strong foot and vehicle traffic, and good visibility.
That leaves Douglas Avenue as the main east-west corridor, and Broadway as the north-south corridor. And with the new Kansas College of Osteopathic Medicine and the adjacent National Institute of Culinary and Hospitality Education opening this fall, Gregory said downtown is about to see more foot traffic.
“Now, is there a site that meets that requirement? I don’t know,” Gregory said. “… I think the higher visibility, the better, the more successful it’ll be.”
When it comes to new construction, Zerbe said there’s potential for sites along the Arkansas River downtown. In 2020, for example, the Riverfront Legacy Master Plan had envisioned a grocery store on the site that is currently a parking lot on the south side of Waterman, across from the Hyatt Regency.
“As the new development along the river picks momentum back up after the Covid delay, you know, maybe there’s an identified spot over there that’s functional,” he said. “I mean, it’s not exactly walkable from down here, but six, seven blocks, some people would do that.”
There’s also mixed-use commercial development planned on the west bank of the river near Riverfront Stadium, including the Wind Surge’s plans to the east of the ballpark and Laham Development’s Riverfront Village concept to the north.
“We agree that a grocery store is important to the continued growth of our downtown,” said Amy Liebau, chief operating officer of Laham Development, in an email. “We believe that the ongoing residential growth in the downtown area is necessary to create a demand for grocery. We are continuing to evaluate the market for development on our site and would certainly consider a grocery store as an option.” The Covid-19 pandemic, though, has accelerated the evolution of the grocery shopping experience. With the emergence of pickup and delivery services, shoppers hardly have to set foot in a brick-and-mortar grocery store.
“Ten years from now, we may be looking at delivery service as being much, much more important than an actual footprint,” Gregory said. “What we might instead be talking about is a warehouse servicing center that’s proximate to the downtown core where you can deliver all those goods from.”
At least in the immediate future, the bigger question is whether downtown Wichita’s lack of a grocery is stifling its growth. Gregory said the answer — for now — is no, especially because Wichita is still car-centric and hasn’t transformed into a major metropolitan area.
“That’s not how we live, and so I guess until we get closer to that, it’s not going to hinder success or it’s not going to hinder future growth,” he said.
QUICK FACTS
- Approximately 3,300 people live in downtown Wichita
- 23 new residential properties have opened in downtown Wichita in the last 10 years, adding 1,462 new units
- There’s 4.8 million square feet of office space downtown
- 81% average occupancy rate in central business district office space
- 44 square miles of food deserts in Wichita
- 277 stores in the Wichita area, 14% are considered grocery stores that sell fresh fruits and vegetables
Sources: Downtown Wichita’s State of Downtown Report, 2020; Health and Wellness Coalition of Wichita’s Wichita food deserts study, 2013
WHAT THE GROCERY CHAINS SAY
Asked what factors they consider for new store locations and whether they’ve ever considered one in downtown Wichita, here’s what spokespersons from three big-box brands had to say.
Dillons
“Dillons, in working closely with our partners at The Kroger Co., considers a variety of factors when considering locations for new store in the communities we serve. This includes, but not limited to factors such as current population density and expected population growth. Additionally, we continue to carefully consider shifts in our customers’ purchasing behaviors with the substantial increased use of online shopping for grocery pickup, delivery, and ship-to-home services. Over the past few years and as a result of the pandemic, many Dillons customers have turned to online grocery shopping for added ease and convenience and continue to shop for their families using these methods. Today, Dillons currently operates 15 locations throughout the city of Wichita, as well as locations in the surrounding communities of Andover, Derby and Newton.”
Target
“We are continually evaluating potential store locations to serve new guests, but I don’t have any new-store news to share at this time…. At Target, we consider a number of factors when evaluating new store opportunities, such as population density, site accessibility and how we can fill a need in the community. We work closely with local leaders to identify locations where we can best serve a neighborhood and offer a convenient and inspiring shopping experience.”
Trader Joe’s
“We consider many factors for each of our locations. In our Podcast – Inside Trader Joe’s – Episode 5 – Please Won’t You Be My Neighborhood Store, (executive vice president of finance and administration) Bryan Paulbaum shares that population is really important. We need a certain number of households in the neighborhood to support a successful Trader Joe’s. For our first store in Wichita, we chose a location outside of downtown.”
Representatives from Walmart did not respond to a request for comment.
WICHITA’S FOOD DESERTS
City Council member Becky Tuttle, whose district encompasses much of northeast Wichita, has long been involved with the Health and Wellness Coalition of Wichita, which in 2013 found there are 44 square miles in which residents lack access to healthy food options. The WBJ spoke with Tuttle about what work is being done to address Wichita’s food scarcities, and what role the city has — and does not have — in bringing a grocery store to downtown. The following excerpts have been edited for brevity and clarity.
What is a food desert and where are they located in Wichita? A food desert, according to the Department of Agriculture, is an area with limited and/or no access to healthy food. So maybe not just all food, but healthy foods, so specifically lean proteins, fresh produce, and it’s normally in areas of lower income. So for example, a ZIP code would have to be majority of under the poverty level…. We found in the study that every City Council district does have food deserts, but obviously some areas are more predominant. But every aspect of our community is impacted in some way.What is being done to address the scarcity of fresh food in Wichita? The first goal that we hoped for is that we would have a publicly appointed food policy council…. The city and the county staff are working to make that come to fruition.
The first goal is to foster food system coordination and education. So just even building community awareness around the issue, building community awareness around food waste, which is a huge issue when you’re dealing with people in food deserts, trying to help them to understand how to better use the food that they do purchase that’s fresh.
Support coordination between food system partners. There’s a lot of people working on this issue, but are they all working in collaboration?
The next goal is to improve access to healthy foods and that’s really talking about getting people to food and food to people, and if there’s one gem for me that came out of Covid, it’s that people first of all became more aware of this issue, and maybe not even the food desert issue but just food…. So we tried to use that as an opportunity to try and raise awareness. But it also taught us during the pandemic that there’s different ways to get food than the traditional way of going to a box store, going through the store, loading up your groceries and taking them home. People became more familiar with being able to purchase online and have it delivered, being able to go and pick it up, so it helped us to think a little bit outside of the box of how we have access to food.
And then the last goal is to increase local food production…. We found that $1.6 billion is spent annually on food in Sedgwick County and less than 1% of the food that we consume in our community right now in Sedgwick County is locally grown…. And so what if we had a lofty goal of trying to get 5% of the food that we consume in Sedgwick County to be locally grown or sourced, that would mean an $80 million boost in our economy annually.
What about efforts to address the food desert in downtown Wichita? If that’s something that private industry is interested in leaning into, I think that that would be fantastic. There are many food deserts throughout the community, we can’t solve them all at one time. And sometimes people have concerns that if they go downtown, maybe they won’t go to other lower-income areas, but my thought is as long as we’re taking little steps to look at how we address food deserts, they all should be addressed.
One concept that could work in the downtown area is called a healthy corner store initiative, where helping entities that sell food to make it easier to also sell healthy food, or it’s used by like the food bank or let’s say our federally qualified health centers, that maybe have some sort of food pantries, but they just need a little help with refrigeration or they need help with freezers so that they could also distribute lean proteins and fresh produce. So we’re trying to think outside the box of not just getting everyone to a full-service grocery store, but where else can they have access to healthy food that’s closer and more accessible to them?
What’s the city’s role in addressing the lack of a grocery store downtown? In this case, it’s an example of this is probably something the city can’t fix. This is something that private industry will drive. And if an entity wanted to start a grocery store downtown and they needed to utilize our economic tools or something like that, that’s something that we certainly could help in some capacity… Private industry will drive if a grocery store goes downtown or not. That’s that’s not something that the city would do. But I know many of my colleagues on the Council, as well, would do everything that falls within our purview to make it easier.
Why is having a downtown grocery store important? It’s not only an exciting option because it’s a food desert and we want to address that, but then we’re looking at the development on the west bank, and we’re looking at what could happen on the east bank, and as more people are moving down to the core, we have to make sure that we provide quality of life initiatives for our residents and I think that not having a grocery store downtown right now is certainly an issue.
Article by Shelby Kellerman from the Wichita Business Journal.
No Comments