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.
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.