By: Eric Price
The regional shopping center market is in flux. The enduring rise of e-commerce trends, lingering COVID adjustments, the increasing costs of rent and construction materials and other inflationary effects have made it difficult for the sector to settle. The resultant rising vacancy rates continue to dissuade customers from frequenting their old, standby centers. Under relentless pressure, many landlords are left struggling to figure out where to focus in order to remain competitive amid such volatility.
Even before COVID-19 made it overtly clear, grocery stores have always been an essential service and magnet for customer traffic. Grocery resources are an intrinsic need for every city’s survival, and they are a vital component to ensuring the health of any community. In addition, strategically positioned and well-designed grocery stores have the ability to lure customers, again and again, making them an ideal asset for anchoring other businesses nearby and, potentially, attracting new ones.
A New Player in the Lineup
Many shopping centers are in dire need of a big tenant or a big move to create a cohesive environment that attracts customers. Some older centers have odd property shapes, intersections, driveways, or a myriad of ad-hoc additions that don’t support a center’s broader vision. These conditions make it difficult to install a simple square, big-box grocery store. These centers also tend to feature a range of medium format stores, roughly 20,000 to 45,000 sq.-ft, and deep narrow shops, both of which are currently experiencing high vacancy rates. These existing footprints can accommodate thoughtful grocery formats without being disruptive. The strategy is looking beyond the foundational paradigm of a suburban big box store to the lessons we have learned designing in urban infill spaces.
Behind the Scenes of Grocery Operations
Designing the most effective grocery “intervention” strategies involve looking at backend infrastructure – loading, trash, and the food service component. Beyond streamlining operational logistics, proper infrastructure features also help position grocery store businesses as good neighbors to the local community (their primary consumer targets) by addressing concerns like traffic and noise.
Regional shopping centers may not be built to accommodate large trucks or high volumes of smaller delivery vehicles. Considering product exit/entry flow and time to refrigeration are vital, and exposing loading operations in plain view isn’t the best model for business appeal. Is there space to accommodate delivery trucks or vans? Where does it make the most sense for these vehicles to enter onto the property? How can noise be minimized and not disruptive to neighbors? Innovative technologies, such as BIM modeling and vehicle simulations can help answer these questions. Several dozen loading configurations were virtually tested to support a new, 40,000-sq.-ft. grocery store at Bay Street Shopping Center in Emeryville, bringing swift resolution on how to best maximize the space’s gross living area (GLA).
A High Parking Ratio is Not the Only Way to Win in Retail
Many cities in California are relaxing their parking rules, leaving it to developers to lower ratios where appropriate. Now, the empowered developer can balance parking necessities with other amenities that appeal to new customers. The relaxed parking requirements and new-found openness to drive-thrus have paved the way for innovative ways to fit new pad sites where regulations used to restrict property redevelopment. Acknowledging that parking is still a draw for many consumers, hiding a well-designed store or gathering space behind a sea of cars doesn’t do much for aesthetics, and conversely, an empty parking lot doesn’t provide a great image either. In some cases, rooftop parking is a smart solution that serves both functional and visual purposes. Parking on upper levels, rather than the ground floor, can create a more inviting atmosphere while limiting impact to the remaining center. Transitioning existing lots from “car spaces” to “people spaces” opens centers up to attract a more multi-modal customer base.
Many regional shopping centers have added EV charging stations in recent years – features that invite (or rather require) visitors to stop and stay a while. Adding a grocery component and outdoor seating areas to the existing retail mix helps broaden the array of options available while charging, while also making the center a regular destination.
Customers are seeking value and speed. Sensitivity to these needs is key in designing new stores to enhance end-user experiences without the disruption and expense of a major overhaul. Looking at a grocery program as a malleable collection of departments can help reconfigure layouts and optimize existing footprints. For example, buffets, which disappeared during the pandemic, have come back as limited features, and stores with existing displays have been reconfigured to accommodate prepackaged food offerings, boxed meals.
Outdoor connection is a theme that’s gaining traction, both in existing shopping centers and with newly developed properties. Windows along the store entrance with clear sightlines welcome customers inside, while outdoor seating invites shoppers to linger. Underutilized centers with vacancies might consider removing or renovating old structures, to incorporate open spaces with play areas and a variety of seating options. Taking the surrounding environment into account, seating areas might feature wind-breaking materials, such as screens or a trellis, or heaters in cooler climates. In areas where more controlled conditions are preferable, a balcony might be a creative enhancement. A new flagship Safeway currently underway in South San Francisco was envisioned with a second-level balcony seating area that only customers can access creating a buying opportunity, limiting leakage. The front doors of the Bay Street Shopping Center grocery store open onto a pedestrian plaza with ample public seating.
With soft goods fading out of neighborhood centers, “entertainment” concepts have gained popularity.
Entertainment venue Plank, in Jack London Square is bustling with post-COVID crowds, demonstrating a real thirst for establishments of its kind. Experiences like axe-throwing and indoor mini-golf bars have become great plays to incorporate into smaller- and medium- size spaces. Leveraging the necessity of grocery stores in combination with other experiences offers opportunities for community members to embrace local centers as their “Third Place” (perhaps second if they’re still working from home) to spend time.
Regardless of the route that is ultimately pursued, the key is to engage an architecture firm with urban grocery expertise early. Adapting the traditional, prototypical grocery box model into existing market conditions requires that customer experience, infrastructure and access must be handled with care. One size does not fit all.
Lowney Architecture Commercial Studio Director Eric Price has more than two decades of experience working on a wide variety of hospitality and retail projects throughout the San Francisco Bay Area. He is a Licensed Architect in the State of California.