A reader emailed to ask when I would be writing an "I told you so" blog entry regarding the recent closing of Sendik's at Shoppes at Wyndham Village.
While my apprehensions were public and frequent (and early), I certainly take no pleasure in seeing the Sendik's at Wyndham Village close. But, the bottom line is, you can't buy a Batmobile at Sendik's.
A year ago, I wrote:
I stopped at Target because it was opening day, but also because I really wanted that Hot Wheels '60s-era Batmobile that just came out (lost my childhood Corgi version in the flood). I ended up getting some cereal and a Starbucks coffee at the same time. Didn't go near Sendik's - - you can't get a Batmobile there, you know. (Nor can you loiter in an aisle examining dozens of varieties of pens, another favorite pastime of mine.)
Don't think this is significant? Think this is all "great competition?" Then you haven't studied closely the reasons people shop where they shop and buy what they buy. As it happens, I've spent twenty years of my life squandering brain cells on exactly those questions. I'm good enough at it by now that companies regularly pay me decent money to advise them on those exact issues. (Heck, spend a weekend with a book and you'll start to get the picture very quickly. Just don't horn in on my client base).
Grocery stores like Sendik's don't make their real nut on you going in and getting exactly what's on your list. The real money is in incidentals that you suddenly decide you need while you're there - - and that's where the higher mark-up is. On everything else, they have to remain competitive and therefor maintain thinner - - sometimes murderously thin - - margins.
Example: Computer nerds and audio jocks know that you should never buy cables or cords at Best Buy. A nominal length of USB or ethernet line is just outrageously expensive there (recent example from The Consumerist website: Three generic 6-foot optical audio cables from online retailer Monoprice.com for $10.79, shipped. Same product from Best Buy [the cheaper, Acoustic Research brand], shipped price was $97.47 for three).
But Best Buy still manages to make really big money on high mark-up cords because it's an incidental purchase made while picking up a DVD player or iPod. (Best Buy managers encourage their no-commission floor sales crew to push the cables, of course; they sold my mom a $100 cord she could have gotten at Radio Shack for $5.99). And, you guessed it, they don't make much - - if anything - - on the sale of that DVD player; it's the cables that excite the Best Buy bean counters.
Bottom line: We are about to watch a seasoned nation-wide predator slowly and efficiently absorb its locally-owned prey over the course of a couple years; it has overtly configured itself as if Sendik's does not exist, much less live right next door.
However...
It's interesting that the central and controlling presence of Target in Shoppes at Wyndham Village seems to be the elephant in the room ignored by the Milwaukee Journal Sentinel (see below), Business Journal, and other bloggers.
In fact, the preceding examples do not once even mention the name "Target" in their reports of Sendik's closing.
"Succumbs to economy."
Perhaps. But, by all accounts, the other Franklin Sendik's at 51st and Rawson - the one not chained to a grocery-selling Target store - is doing a great and growing business, as are the other region-wide Sendik's locations. They face the very same economic pressure, but are not hindered by a site plan dominated by a big box that, in effect, eats their lunch each and every day.
That's not to say there's anything wrong with a Target store. At the same time, one must recognize the implications of making a big box like Target the center of a strip mall whose site plan discourages cross-shopping. And all that talk of a "high-end lifestyle center" and "high standards" is coming down to earth. It's ubiquitous Cousin's Subs rather than a Potbelly's or even a Jimmy Johns; it's econo-cut SportClips rather than a spa/salon. Let's hope Ferch's, the one remaining "as advertised" tenant, takes hold.
The happy surprise in this story? The immediate entry of Roundys into this market space. While this is much better news than ending up with a vacant building (or a Target Greatland as I predicted), one can only hope that Pick n' Save is a "serious shopping" draw in a way that a more upscale grocer is not.
However, there are rumors (already?) that Roundy's may install their "Metro Market" upscale configuration, which is largely a matter of re-signage; same market appeal, different name. Perhaps Roundy's can muster success through its huge economy of scale.
Otherwise, there's a Target Greatland in our future.
(See also Shoppes at Wyndham Village: Part 2 - The issue of site design; "My part of the development, which is the Sendik's and all the outlying buildings..."; A tale of two Sendik's stores;
From the Milwaukee Journal Sentinel:
Franklin Sendik's Succumbs to Economy
A sinking economy, combined with heavy competition, is leading one of two Sendik's supermarkets in Franklin to shut down after just one year of business, the store's co-owner said Tuesday.
"Over the last year, we've struggled to gain market share in Franklin," said Lori Balistreri Barczak, whose family owns the Sendik's Fine Foods at The Shoppes of Wyndham Village at the southeast corner of Highway 100 and Drexel Ave.
Despite a "gorgeous facility" and "tremendous staff," the store has been unable to draw enough sales to cover its costs, Barczak said.
The store will close at the end of July, Barczak said. Roundy's Supermarkets Inc. will reopen it as a Pick 'n Save supermarket in November, said Roundy's spokeswoman Vivian King.
Roundy's is buying the store's equipment and will assume the lease for the building, King said. She said the store's 141 employees are being encouraged to apply for jobs at the Pick 'n Save.
The Sendik's store opened July 9. Since then, the recession deepened, which hurt sales, Barczak said.
Also, the store has a lot of competition, Barczak said. That includes a separately owned Sendik's Food Market at 5200 W. Rawson Ave., Franklin, which remains open.
The two Sendik's stores in Franklin - which are about a 10-minute drive from one another - are owned by different branches of the Balistreri family. The group that owns the Wyndham Village store also owns a Sendik's at 18985 W. Capitol Drive, Brookfield. That store opened in 2001 and is performing "extremely well," Barczak said.
The Rawson Ave. Sendik's opened in fall 2007 and is owned by a branch of the Balistreri family that owns seven other Sendik's Food Markets in Elm Grove, Germantown, Grafton, Greenfield, Mequon, Wauwatosa and Whitefish Bay. (Yet another family branch owns three Sendik's stores in Bayside, Brookfield and Milwaukee, while the Shorewood Sendik's is owned by John and Anne Nehring).
The Rawson Ave. store, located in the Fountains of Franklin development, "is doing quite well for us," said co-owner Nick Balistreri.
"Our business has been growing at a very steady rate," he said, "and we are very happy with its performance."
Sendik's stores have won customers partly because of their reputation for providing higher-quality fresh meat and produce. Several new Sendik's stores in recent years have filled gaps left behind by the departure of the Kohl's Food Stores and Jewel supermarket chains, along with other grocery store closings.
Pick 'n Save, however, remains the Milwaukee area's dominant supermarket chain. Roundy's doesn't plan to close any of its Franklin stores despite the conversion of the Wyndham Village store to a Pick 'n Save, King said.
"We think this store will fit in with our network of stores very well," King said. "Franklin is a growing community."
Industry consultant David Livingston said, however, that the Wyndham Village location is "entirely inadequate for a supermarket." .
"The primary reason is the lack of population density. This is due to much of the trade area being composed of lakes, landfills, golf courses and farms," Livingston said. "While there are a few small subdivisions of higher-income housing, there just isn't enough to support a high-end supermarket."
I happened to grab a sandwich over there yesterday afternoon and it was explained to me that the shut down period between Aug. and Nov. would be to overhall the entire store layout of the current Sendik's design. If that's true, I would have to believe that we won't be seeing a MetroMarket in our future. I guess we'll see.
Posted by: J. Strupp | July 01, 2009 at 04:06 PM