HomeNewsBusinessOpinion: Demographics Show Downtown Augusta Cannot Sustain Grocery Store Chain

Opinion: Demographics Show Downtown Augusta Cannot Sustain Grocery Store Chain

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If we as a community want a new grocery store downtown, we must first be honest with ourselves on why we have been unsuccessful in recruiting one so far, and what measures must be taken to bring a store to our community.

This is a very controversial subject, and many will disagree vehemently with me because of the philosophical arguments. My goal here will be to show the reality that the demographics of downtown indicate a full-service chain store is not sustainable, regardless of any other metric or community need.

My 16 years working in commercial real estate and partnering with users who make decisions based on demographic data gives me a unique perspective on the issue. Community activism and politics are irrelevant to the facts and figures. Companies make decisions based on profits and the best interest of their shareholders, not the residents of a local community.

For years, local politicians have claimed a store was coming soon. Many even made bringing a grocery store to downtown part of their platform. Just like with the Regency Mall, there isn’t anything government can do to compel a company to sell their property or to open a store. Grocery store ownership does not answer to the citizens of Augusta the way our local politicians should.

The decision process is quite simple. If there are enough people in a certain geographic region with enough dollars to buy the product to meet the company’s sales goals, they will open a store. If the potential to hit those sales goals doesn’t exist, neither will the store.

A quick analysis of the grocery dollars being spent per household shows that if another full-service chain grocery store opened downtown, it would not be able to be profitable.

I analyzed the population, household sizes and disposable income historically spent on groceries at the nine closest grocery stores to downtown.

MORE: Two Grocery Stores Proposed to Open in CSRA

Combined sales from those nine grocery stores are roughly between $110 million and $120 million. Those figures are not exact, as the radius around each customer zone sometimes overlap and the sales figures also include food purchased from non-grocery store chains such as gas stations, convenience stores and bodegas.

The average household located downtown spends roughly $2,500 per year on groceries while parts of West Augusta spend as much as $4,500 per household. My research indicated the average grocery store sells between $5 million and $8 million in groceries per year.

For a store to be able to sustain in the downtown area, the total dollars available to be spent on groceries must increase. That increase can happen from a boost in population density or an increase in income levels of the existing residents.

A boost in the minimum wage, however, would not help to increase those disposable dollars because grocery store chains will increase the cost of products proportionately as inflation occurs from the decrease in the value of the dollar that always follows an increase in the minimum wage.

Using Dyess Park as a starting point and drawing a one-mile radius in a circle shows an average of $2,120 per household being spent on groceries per year. In the North Augusta area, the average is just over $3,500, and the Washington Road area is just under $4,500 per household, or double what is spent by downtown residents.

Looking at the data on a more granular level, it’s easy to see why Whole Foods could not sustain its location on Washington Road. Whole Foods more than likely strayed from their normal demographic matrix, thinking they would gain customers traveling from further away due to the store’s proximity to I-20. With Publix, Kroger and Fresh Market located near Whole Foods, there were too many stores per household/disposable income for Whole Foods to survive.

If the Publix on Washington Road  ­— which was purchased by the Augusta National Golf Club  ­— closes at the end of their lease, there will be a significant opportunity for another chain to take its place.

Joe Edge is the Publisher for The Augusta Press. Reach him at joe.edge@theaugustapress.com.

17 COMMENTS

  1. Interesting and spot on….population shifts are affecting groceries locations too…they gos where the population grows…the Kroger in Grovetown is probably the most profitable store outside of Atlanta.

  2. for those young up and coming people who live downtown, they mostly eat out and if not the kroger, publix and lidl in north augusta are very close for them to shop. no matter what politicians think, private corporations who must make a profit and can not take from the tax payer, will only put a business where they can make a profit. their concern is not for people who have no transportation to the nearest grocery store. so the cycle of poor people being taken advantage of by small convenience stores in their neighborhood will continue. if the government wants to feed the poor, maybe they should look at a food distribution system instead of the current food stamp program.

  3. I take issue with the information presented because it’s a very shallow reading of a very nuanced and important conversation. The analysis could have gone further to sample national census data analogous to zip codes in the downtown area and understand what creative measures are being taken by municipalities to ensure access to healthy food is available. Also examine store footprint relative to those communities. We all know traditional grocers operate on razor thin margins but there are plenty of positive examples where local governments are creative enough to facilitate grocers, either through deep subsidies or public/private partnerships.

    • My goal was to show how national retail chains evaluate the data and make decisions. That decision process is done based on a local market and municipalities can do nothing to affect the decision making process, at least not for national retail chains. Smaller grocery stores have more flexibility but downtown can’t sustain a full service chain store based on current demographics.

      • Downtown doesn’t need, and can’t support, a large chain supermarket. We need to try to attract a smaller grocery store. Something about the size of the Gurley’s that used to be downtown. Or like the grocery stores we used to have in the 50s and 60s. Not just a larger convenience store. It should carry all the basic groceries plus some upscale items that would appeal to the newer residents of downtown.

    • So, with subsidies and public/private partnerships the problem is solved in Augusta. And like the cities who have done these things, the taxpayers who remain are left with the tab. Their cities are overrun wirh crime and corruption. Their police have become afraid to enforce the laws because of the edicts of ideologue mayors and councils. There is a revolution brewing, and it will begin and end with the ballot box.

  4. Excellent analysis using real data. This is the honest reality of the situation. Many people have been expressing this same opinion for years, but too many did not want to face the truth.

  5. When all of these apartments being built downtown are full of consumers, will that change? People paying over $1000 in rent certainly have the means to buy more than $2500 a year in food. Being just across the river to shopping messes up the rules too I suppose, although I myself do a great amount of shopping in that other state.

    • Granted, due to my age, I may not be the best to comment on all these new apartments they’re planning, but I really don’t think I’d want to live in this part of town.
      Going to work everyday, I see people walking around at 4 in the morning, laying under cardboard shanties, panhandling, going to the bathroom right along the side of the road….I just can’t see those folks not doing the same right beside those luxury apartments. But, maybe the “younger” crowd see beyond or through that.

  6. Absolutely no mention in this article about the former Kroger on 15th street closing because of it’s OUTRAGEOUS shoplifting problem? Come on folks, THAT is a major consideration when it comes to a new grocery store in the downtown area. Anyone who says any different is only fooling themselves.

  7. Seems like a great opportunity for a few citizens to gather together to do a start up small grocery in downtown…there was a recent article (I think in the press) of a consulting group to help Laney area folk learn how to do start ups….well here it is staring you in the face.

  8. Have long held this opinion and Joe backs it up with great analytics.

    It is the responsibility of those moving into the center city to know food shopping options prior to going there.

    There are several excellent grocery chains just across the river and up Washington Road.

    We live in the Petersburg Station area of Columbia County and over the past several years we lost Food Lion (a mercy killing), BiLo and that Whole Foods like store. Somehow we are surviving.

    I am tiring of the ‘food dessert’ talk as well.

    Grocery stores are built where they can make profits for the company and it’s shareholders.
    Throw around all the rhetoric, but this is the nut.

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