What it takes to keep neighborhood grocery stores in business
(Originally published February 2019)
Some people, when they look at a nearly 50-year-old neighborhood grocery store like the one at 469 High Point Terrace, see a quaint slice of Americana.
A feel-good throwback to a time before smartphones turned commerce into the cold calculus of apps and one-click buying and digital storefronts. Compared to all that, it’s enough to make a legacy enterprise like High Point Grocery—founded back in 1970 by the father of current owner “C.D.” Shirley—look pretty uncomplicated. The fact of the matter, though, is that stores like this one and others in Memphis today stand in stark contrast to the reality of this particular retail segment. Nostalgia and tradition are all well and good, but it’s not like those sentiments are even remotely a bulwark against competitors with big-box stores, splashy websites and asset-rich balance sheets. Or are they?
Photography by Richard Lawrence (RL) and Chip Chockley (CC)
A store like High Point Grocery endures because it does a thing and it does it well.
If retail today is about bigness, from vast product assortments to coast-to-coast retail footprints, High Point Grocery is very much the antithesis of that. It’s basically one room, a few thousand square feet in size. Shelves stocked with the essentials—milk, cereal, toiletries, the usual grocery staples. There’s a meat counter, freezer and locally made products like cookies and an assortment of other baked goods. Handmade signs posted on the front windows announce the value herein, like two-liter Coke for $1.69, Angus T-Bone steak for $8.99 and “Best Choice Shredded Mild Cheese,” $1.49 for eight ounces. Children of parents whose grandparents were regular shoppers likewise push carts down its aisles today.
It’s cute and small and very much a High Point neighborhood institution—one that everyone involved, from the owners to the regulars, prefers just the way it is.
“A third to half of our customers, I’d say, come in every single day,” says manager Michael Shirley, who’s also C.D.’s son.
“It certainly doesn’t feel like you’re walking in to a grocery where people are just there to get a paycheck and clock out. We have one of the managers who works here who drives an hour-and-a-half to get to work, she loves it here so much.”
It’s easy to become attached to a place like this. But when you disenthrall yourself, you start to look at a business like High Point Grocery the way real estate consultants like David Laube do. Yes, ladies and gentleman, it’s time for a diversion about nobody’s favorite part of this or any commercial enterprise.
We’re talking, of course, about the math behind it all.
Getting a handle on what it takes to make an independent grocery operation run smoothly will actually help you make sense of—well, a lot.
Those of you who’ve been inside a Kroger recently don’t need to be reminded that there’s a veritable grocery war under way. One that we will see continue to unfold throughout 2019 in spectacular clashes, in well-planned campaigns and quick skirmishes at almost every level of the business. Kroger, to cite one example familiar to local shoppers, is rapidly kitting itself out with new tech and digital capabilities, the ability to now order online and schedule pickups. Likewise, the biggest retailers in the country—where grocery offerings aren’t necessarily the centerpiece of what they do—are lusting after the regularity of shoppers who need to come in for staples like milk and bread every single week. Which is why you see everyone from Target to Walmart and even Amazon shoring up their own takes on the grocery business.
So where does that leave a place like High Point Grocery? That depends on how well the store keeps executing on a number of fronts, but especially on the math behind an operation like this.
Laube, a principal with Atlanta-based Noell Consulting, walked Edible Memphis through the numbers associated with running a grocery business.
Listen up, because if the handful of independent grocery stores around Memphis want to stick around, or if anyone out there is thinking of opening a new store at a time when the biggest corporations with the deepest pockets are likewise getting into the grocery game, this is the dollars-and-cents framework they’ll all have to follow.
Here’s the first thing to understand, if you don’t already—a grocery is a very, very low-margin enterprise.
There’s only so much, in other words, you can charge for a gallon of milk, right? “So it has to rely on volume,” Laube explains.
The average annual sales per square foot for a grocery store, he continues, is around $400 to $500 that they have to bring in. Regardless of size. “You do the math on that. It depends on the economics of your area and what the average ticket price is, but generally, a small, independent store, they need to bring in anywhere from 300 to 500 people through their door every day to hit that,” Laube said. “If you can’t hit that, then economically it just never works.”
As he explains it, it’s actually a pretty simple economic model, one that lets you work backward to see if a grocery concern can be viable. The challenge is that because the business is so low-margin, the owners only have so much money they can pay for operating, for rent, for employees and the like. “And those are all relatively fixed numbers,” Laube said. “So it really just all comes down to volume.”
When you talk to the operators of many of these independent grocers in Memphis, you have to listen carefully.
They will talk to you about things like personalized service and paying close attention to customers, to the point of even remembering the names and predilections of regulars. What’s a byproduct of that attention? Those customers keep coming back. They tell other people, and other people come. Voila, there’s your volume.
“My grandfather is the reason the store is the way it is,” Michael Shirley said about High Point Grocery.
“He’d always been very hands-on with customers. And we’ve kept an old-timey-like, friendly feel. A lot of our customers, their grandparents came here and then the next generation and now the children shop here.”
Adds his father, “We buy the best meat we can buy. Certified Angus choice beef. Our pork is the best we can buy. You can see your meat cut right in front of you. . . . A lot of our customers, we know by name. We just give them better service.”
Lest this make things sound particularly rosy for an independent grocer, the reality is actually quite the opposite.
It’s a grind mixed with the lingering specter of an existential crisis mixed with the hard slog of presenting yourself as a local, independent alternative that you hope you can convince enough people to choose over, well, the other guy.
In Harbor Town on Mud Island, meanwhile, staying small and independent doesn’t have to mean the past takes precedence over everything.
The grocery store that opened in 1998 as Miss Cordelia’s—named after real estate developer Henry Turley’s mother Cordelia Jones Turley, who died in 2005 at the age of 93—has been given a fresh coat of paint, in a manner of speaking. As 2018 came to a close, the store rebranded itself as Cordelia’s Market, which served to combine the store’s eat-in space that had been known as Cordelia’s Table with the grocery itself.
Twenty years is as good a time as any to take stock of how far a business has come and where it needs to go. Times change, and in this case the store decided it needed to change to meet them. For one thing, the store pursued a remodel as part of the update to make itself more of a neighborhood hangout via an expanded café section, where you can stop by for a beer or to get a bite to eat. Cosmetically, the store also changed its lighting and even the signage and logo.
Even so, a touch of the old-fashioned still remains. A sign was added to the cold section, which includes items like milk, announcing “Welcome Home.” The store added a quaint-sounding “Butcher” sign to the meat section. Those kinds of details are important, because it was a sense of heritage that was infused into the store from the beginning and gave it a personality.
Cordelia Turley herself was a fixture at the store during its early days—welcoming shoppers, sitting in the store and smiling and talking to whoever passed by.
Curb Market is another prominent independent grocery business. In 2018 its owner reconfigured the store inside Crosstown Concourse and gave up some of its space to allow a pair of new concepts—Lucy J’s Bakery and Global Café—to open there. “That’s made our space somewhat smaller,” said Curb Market owner Peter Schutt. “But we’re still able to stock 99 percent of the locally made and grown items as before.”
His grocery store, which takes its name from the old marketplace that used to operate on Cleveland Street north of Poplar Avenue, had actually opened first in Midtown in 2016, in the space formerly occupied by Easy Way at 596 South Cooper Street. A year later, he shifted the store to Crosstown, to a space roughly four times the size of the Cooper location before trimming it slightly last year.
The reason he feels stores like his often have the cards stacked against them has to do in part with the way people increasingly default to whatever is most convenient.
“I have come to realize that people of all ages are less and less interested in cooking at home, much less getting in their car to go shop,” Schutt said. “People, in general, have become addicted to looking at phone or tablet or TV screens, so while they’re doing that, they do their shopping and ordering out for food.
“The Curb Market now does about two-thirds of its business from the hot bar, salad bar and catering. We now do off-site catering. I don’t think there’s another caterer in Memphis that uses locally grown vegetables and meats. It’s the same quality that we serve on our hot bar.”
In terms of the future of stores like his? Schutt points to Walmart testing self-driving cars to deliver groceries. Plus the fact that Amazon owns Whole Foods, in addition to the fact that you can order your groceries from Kroger over the Internet. “People are losing touch with each other, except through virtual, digital means,” he said.
“The art of food is changing, mostly for the worse.”
Hamida Mandani, meanwhile, owns City Market with her husband Sunny. They have two locations of their small grocery store—one Downtown, at Main Street and Union Avenue, the other in Midtown, at 836 South Cooper Street.
She’s not as negative in her assessment as Schutt is, but she’s no less direct in the work required to pull off a concept like this.
“Hard work, that’s the secret,” she said.
“Knowing your customers. Having that personal impact. More than 60 percent of my customers that walk in, I know them by their name, and they know me. Winning their trust and loyalty, that’s the key. Would I prefer to go buy a box of cereal that’s probably 50, 70 cents cheaper at Walmart or Kroger, or buy it from you? I like to see who I buy it from and know that the tax dollars are going back into the same system. All those things help.”
It’s a pretty straightforward business, serving customers the groceries they need week-in, week-out. These and certainly other Memphis-based independent grocers are making a go out of it as best they can, at a time when “Buy Local” is a mantra, and yet convenient, bigger and digital alternatives are even more convenient than ever. Some will make it, no doubt some won’t, and about the only thing that’s certain is their collective story will only unfold slowly, in increments—unlike the lightning-fast pace of change at their bigger digital brethren.
In other words, one customer, one shopping cart, one sale at a time.
You can find Cordelia’s Market at the 2019 Craft Food and Wine Festival on June 23rd. Buy your tickets here.
Andy Meek is a native Memphian whose work during a nearly two-decade career in journalism has appeared in outlets like The Guardian, The Washington Post and Fast Company. Contact Andy at firstname.lastname@example.org.
Richard Lawrence takes pictures in and around the city of Memphis and the Mid-South. You can find him on Instagram @sundayinmemphis.
Chip Chockley, an attorney by day, has been a professional photographer since 2008. Things that make him happy include tacos, mai tais and his wife and kids.