Imagine you own two small grocery stores, well positioned in University Place and Gig Harbor.
Your emphasis is on fresh and local, appealing to those looking for just the right cut of meat, great produce or new IPA.
Then Whole Foods decides to open its only store in the South Sound near your University Place outlet in 2015.
Good thing your Gig Harbor store was its own island of fresh, local honeycrisp apples and specialty Greek yogurts.
That is, until 2016.
That’s when Kroger decided to introduce its only Main & Vine concept grocery store in the nation, within walking distance of your store.
Kroger will see your fancy yogurt and raise you an in-store farmer’s market.
Welcome to Chad Roy’s world. He and Scott Teodoro own Harbor Greens.
Both of their stores are just under 11,000 square feet. (The median U.S. supermarket is 42,800 square feet.) The University Place site at 2620 Bridgeport Way W. opened in 2013. The Gig Harbor store at 5225 Olympic Drive just marked its 10th anniversary.
“I’ve been in grocery for 24 years,” Roy, 41 recalled in a recent phone interview with The News Tribune. “Scott (39) and I were best friends, and it all started over a ping-pong game. A lot of talk and then we said let’s do it.”
“I started in the grocery business in 1993 in Lakewood at H & L produce,” he said. “I always loved the change of seasons in this business, so I quit college and I went on to manage Tacoma Boys for 10 years more before opening my own.”
Then, when Whole Foods, then Main & Vine and Fred Meyer started moving in on the partners’ territory, “It was just like, ‘Wow. That’s an interesting turn of events,’ ” Roy said.
“It hurt us in the beginning,” he noted. “Any new store coming will hurt. ... Everyone wants to go see the new shiny place. But if you continue to do what you do right, people come back.”
His store aims to be an experience for customers.
“Our UP store has a brand new tap room with lots of craft beer,” he said. “You can drink right there while you order a hot and ready pizza or take a growler to go.”
Its array of prepared food items has grown.
“It used to be a lot of fresh produce and we still do our part but not what it was 10 or 12 years ago,” Roy said. “... now it’s cut or chopped items rather than straight-up fruit so much, although we still sell a lot of that.
“Our entire pizza program is new. We have $9.99 gourmet pizzas now and gigantic Bavarian pretzels with dipping sauces to go with the cold beer or wine of your choice.”
But the digital revolution is upending the grocery scene, as much as “experiential” stores such as Harbor Greens, in driving consumers’ buying decisions.
Efrain Rosario, chief customer officer with Retale, a mobile app for store circulars, sees a path forward for traditional grocers to compete with entities such as Amazon.
“ ‘Old school’ grocers, or incumbents, can ride the wave of their lives by starting to think digital, embracing mobile and investing in web and app capabilities to engage shoppers across the entire shopper journey and drive them into their stores,” he wrote an opinion piece published in August on the FoodDive grocery industry monitoring website.
A recent Facebook post noted that “now we have over 100 grocery items every month that go on sale for the best price anywhere. ... Look for the monthly sale tags throughout the stores.”
As for home grocery delivery, that’s a wait-and-see issue for Roy.
“You may have a market share who wants that but I don’t think it’s here yet,” he said.
Roy sees Tacoma shoppers as having a little more time to come in and browse as opposed to online grocery cart filling.
“If you live in Seattle as a two-income family, something like a Whole Foods completely prepared meal goes over well,” he said. “I don’t think we’re caught up with that. People still enjoy cooking and barbecuing here.
“I think people still want to compare fresh lettuce versus some dinky thing that’s been sitting in a warehouse.”
Industry observers tend to agree.
“Depending on their financial circumstances, locals of the Seattle area have access to local vegetables delivery subscriptions, pre-made meal subscriptions, and third-party companies who will deliver goods to their front door,” Larry Costich and Cecilia Jeong, wrote in a recent piece for Schwabe Williamson & Wyatt law firm analyzing the Amazon/Whole Foods’ effect.
“The idea of a drive-through grocery store is not far off.”
In the Tacoma area, the cycle continues for revamping brick-and-mortar grocers for enhanced shoppers’ experience and modernization.
The new 60,000-plus-square-foot Fred Meyer in Gig Harbor, still awaiting its opening as traffic mitigation work continues, will be Harbor Greens’ newest neighbor.
There’s still room in the neighborhood for both, Roy thinks.
“I think Gig Harbor is unique in that they want to support small, locally owned businesses,” he said. “I think we can compete when it comes to produce, deli and meat, but I don’t think we’ll be selling a lot of toilet paper.”