Cost-Plus World Market Looking for Growth in the Southern USA
Oakland, California-based Cost-Plus World Market, operator of 300 U.S. stores which sell imported and domestic specialty and natural foods, beverages, wines, craft beers, premium coffee and confections; along with furniture, housewares, gifts and related general merchandise items, is expanding.
The consumables-durables format retailer with an international flair, which operates stores of about 18,000 -to- 30,000 square feet, is looking for locations primarily in power retail shopping centers in the Southern U.S. states of Florida, Georgia, Louisiana, South Carolina and Tennessee, according to Boca Raton-based retail real estate firm Katz & Associates, which is working with Cost-Plus in locating store sites in these Southern USA states.
Cost-Plus World Market likes to locate its stores in power centers with tenants like upscale home stores and similar formats sharing the shopping center.
Key demographics for the specialty food, beverage and home-oriented products retailer include having a population of about 300,000 people within a 10-miles of it's stores, along with average minimum incomes in the $60,000 a year range.
Specialty foods/beverages, wines and related consumables are the largest sales category for Cost-Plus World Market stores. The retailer is currently expanding its World Market store brand line of specialty and natural foods products throughout all categories.
Current categories under the World Market brand include, but aren't limited to: confections, beverages, snacks, preserves, salad dressings and condiments, oils and vinegars, prepared foods, rice and pasta and numerous other categories. Many of the World Market brand items are produced overseas, keeping with the retailer's international theme.
Cost-Plus also is a pioneer in specialty wine and craft beers merchandising, offering a wide variety of both at discount prices in its stores, as it is in the premium coffee and confections category. The retailer's first store, opened in the 1960's at Fisherman's Wharf in San Francisco, was one of the first retail stores of any kind in the U.S. to not only sell premium whole bean coffee, but to roast it in-store as well.
Cost-Plus stores sell about an even mix of branded specialty foods and beverages produced in the USA and internationally. However, with the aggressive expansion of the retailer's store brand program, it's beginning to eliminate some of the branded domestic and imported specialty foods brands and items it sells due to space limitations. Imported specialty foods--especially unique items in popular categories--is a major merchandising focus for Cost-Plus.
Publicly-traded Cost-Plus World Market is currently losing money due to a combination of factors; primarily the economic recession or downturn in the U.S., which has dramatically slowed sales of furniture, housewares, gift items and related hard goods in the stores.
To combat this poor performance of late, Cost-Plus World Market is getting more aggressive in its consumables categories, including expanding its higher margin World Market private label line, demanding more stronger promotions from vendors, and featuring far more specialty food and beverage items in its weekly advertising circulars at discount prices than it has in the recent past.
Cost-Plus World market is looking to lock up locations in various cities in these five Southern U.S. states over the next 16 months.
Sacramento, CA-based Raley's in Growth Mode
Sacramento, California-based Raley's, a multi-banner and multi-format operator of 129 supermarkets and warehouse stores in Northern California and Nevada, is currently looking to expand its store count in both regions, Retail Whispers has learned.
Commercial retail real estate sources in Northern California first tipped Retail Whispers off that Raley's was looking for locations for new stores in the regions.
Kent Haggarty, who is heading up the search for West Sacramento-based Raley's, confirmed the grocery chain is looking for locations in Northern California and Northern Nevada, but says he isn't at liberty to say exactly where and how many.
Raleys operates four retail banners. It's number one banner is Raley's, which are 55,000 -to- 75,000 square foot combination food and non-foods superstores, featuring large natural foods departments, a wide-variety of in-store, fresh prepared foods, and extensive selections of specialty, gourmet and ethnic food and grocery products, along with basic groceries and lots of non-foods and general merchandise items.
The stores also have large in-store bakeries and pharmacy's. Most of the Raley's banner superstores also have in-store eating venues and cafes.
Newer Raley's banner stores also have gasoline fueling stations next to the stores.
The format is upscale but value-based in that the Raley's banner isn't a specialty supermarket but rather a combined basic supermarket and upscale specialty store. Raley's banner stores are located all over Northern California and Nevada.
The Sacramento-based supermarket chain, which is the leader in market share in the Sacramento Metropolitan region, also operates the Bel-Air Markets banner. Bel-Air stores are upscale supermarkets which average from about 30,000 -to- 50,000 square feet.
The stores carry a complete selection of food, grocery and non-foods items, lots of specialty and natural foods products, and in-store fresh, prepared foods. They have in-store bakeries, eat-in venues and cafes, all in an upscale but complete supermarket format.
Raley's acquired Bel-Air, which was the grocer's leading competitor in the Sacramento area, in the late 1980's from the Wong family. Most of the stores are located in Sacramento and surrounding areas.
The third supermarket banner Raleys operates is Nob Hill Foods. Raleys acquired then Gilroy, California-based Nob Hill in the 1990's from the Bonfante family, which operated the family-owned chain for about 65 years.
The Nob Hill banner is an upscale supermarket format similar to Bel-Air. The stores are about the same size on average (newer stores are in the larger range for both the Nob Hill and Bel-Air banners) and merchandised in a similar manner.
The Nob Hill banner supermarkets are located in the San Francisco Bay Area and central coast region, along with a couple in the Central Valley in Northern California. This is due primarily to the fact these were the chain's historical market regions when owned by the Bonfante family before the Raley's acquisition.
Lastly, Raleys operates about a dozen warehouse format discount stores under the Food Source banner. These stores are essentially basic warehouse format stores--cement floors, warehouse shelving--with a slightly upscale twist compared to a Food-4-Less or similar warehouse stores, for example. The focus of the Food Source stores is price and value.
Raleys, with about 129 stores currently in the four formats, does nearly $4 billion in annual sales. Our sources tell us the Raleys banner will be the one the grocery chain expands primarily in Northern California and Northern Nevada.
The new generation Raley's banner stores are big: about 65,000 -to- 80,000 square feet, and as mentioned include fueling stations as part of the format.
Raley's recently opened two new Raley's banner stores in the Northern San Joaquin Valley in Northern California. These stores include a new service the food retailer is trying out, which is a drive-up quick customer pick-up service for grocery orders. Customers can place their grocery orders online and then pick them up curbside at a special location outside the store. A clerk wheels the grocery order out and puts it in the customer's car. The customer pays for the order as part of the online ordering process.
Tesco's Fresh & Easy and Trader Joe's: Side-by-Side
The next new Fresh & Easy Neighborhood Market small-format grocery store Tesco is set to open will be in a shopping center in Manhattan Beach in Southern California. That Fresh & Easy--which when it opens on July 2 will be the first store Tesco has opened since its Fresh & Easy Neighborhood Market USA took a three month new store opening pause which began in April and ends with the store's opening on July 2--will not only be located very close to an existing Trader Joe's grocery market in the shopping center, but the two small-format grocery retailers will even share the same parking lot. The Fresh & Easy is at 1700 Rosecrans and the Trader Joe's is at 1800 Rosecrans in the shopping center.
Since the two formats--Trader Joe's and Fresh & Easy--are so similar in look and merchandising, this should be an interesting upcoming head-to-head food retailing battle. Tesco's stated positioning for its 10,000 -to- 13,000 square foot (same size as Trader Joe's) grocery stores is as everyday neighborhood grocery stores for all consumers, while TJ's positioning is more specialty and natural foods-oriented.
Despite this key difference in format positioning, the two store formats look very similar inside and out: both have cements floors, fairly no frills design elements, use warehouse style shelves, and focus on store brands primarily.
Both retailers' store formats also carry fresh, specialty, natural and organic foods and groceries, as well as specialty wines and craft beers. Tesco's Fresh & Easy though, unlike Trader's Joe's, sells an assortment of basic everyday grocery products. Read more about the Fresh & Easy Manhattan Beach, California location close to the Trader Joe's, as well as view photographs of the two stores in the shopping center here.
Having the Fresh & Easy grocery market within easy walking distance from the existing Trader Joe's might be a good test to see if consumers "get in" in terms of Tesco's positioning of Fresh & Easy as a mini supermarket for everyday shopping (primary) rather than being a clone of Trader Joe's.
Starbucks Opening First 'General Merchandise' Outlet in SoCal Mall
Starbucks CEO Howard Schultz said he was going to innovate when he took back the CEO title and position in addition to retaining his Chairman's title earlier this year.
First, Schultz closed every Starbucks cafe in the United States for three hours in February for combination training sessions/motivational sessions for store associates as a way to make a statement that he was back, and bringing with him the old Starbuck's culture he created as the coffee retailing chain's founder and long time leader.
Schultz also jumped-started the introduction of Starbucks new line of branded gourmet chocalate items, which are being sold at upscale supermarkets and specialty stores throughout the U.S. and introduced internationally. The line had been in development for sometime but its introduction stalled under the company's former CEO and senior management team.
Now it appears Schultz and company are introducing a brand new Starbucks retail format; a Starbucks merchandise outlet store.
The first of these stores--they aren't Starbucks cafe's that sell Starbucks branded merchandise as a sideline but rather stores dedicated to the proposition--is set to open today at the Ontario Mills Mall in Ontario, just outside of Los Angeles.
Ontario Mills is a premium lifestyle shopping mall operated by the Simon Company. The mall has numerous upscale outlet stores in it, including many operated by some of the world's most upscale specialty retailers.
Below is the sign Retail Whispers' intrepid Southern California correspondent IFN spotted on the window of the Starbucks general merchandise outlet yesterday:
STARBUCKS MERCHANDISE OUTLET OPENING JUNE 11TH!@ THE ONTARIO MILLS MALL LOCATED IN NEIGHBORHOOD 8
EVER WISH YOU HAD A WHOLE SET OF THAT CERTAIN STARBUCKS MUG OR TUMBLER?
EVER WISH YOU HAD A WHOLE SET OF THAT CERTAIN STARBUCKS MUG OR TUMBLER?
NOW YOU CAN?
FIND MACHINES, MUGS, TUMBLERS AND MUCH MORE AT DISCOUNTED PRICES!
The Starbucks general merchandise outlet is located in Neighborhood or Section 8 of the mall, close to "Off-Saks Fifth," the outlet store for the upscale department store chain Saks Fifth Avenue. [View the mall floor plan here for the location.]
The Starbucks general merchandise outlet, the first of its kind anywhere we are able to find, will sell everything Starbucks: from coffee mugs, coffee makers and apparel (probably that new Starbucks gourmet candy as well), to whatever else Schultz and company can dream up.
There's a Starbucks cafe located in the Ontario Mills Mall not far from the new Starbucks general merchandise outlet. Can we smell some synergies brewing? Or is that just a Dark Italian Roast blend?