Food Courts, Restaurant Circles . . . Why Not Discount Grocery Plazas?

I suspect the kind of setup you suggest would not be appealing to the retailers in question. The profit margin on groceries is razor thin. The goal is to lure shoppers into the store and encourage them to stay long enough to pick up (and buy) enough of the things that will keep the store's rent and suppliers paid for another month. Why make it easy for shoppers to go directly from store to store buying the loss leaders and skipping the profit centers? Especially since the customers at the discount grocery stores tend to be very price-conscious and they'll know which store has the cheapest X this week and which has the cheapest Y.

It might work with more of a variety of places, though. A discount grocery, a higher-end grocery to cover the basics at both price points. Maybe an Asian grocery, a vegan place, a butcher shop, seafood shop, a bakery? A liquor store, a candy shop. Bring back the days of specialty food shops, with the convenience of only having to park once. And, by being around a shopping center's parking lot, it's not like you wander down a couple of blocks, then walk back with the groceries. (I was in one like this last week, a nice mix of shops and restaurants - miles from where I live, though.)

Australian shopping centres often have two or even three different supermarkets within the same building. I've noticed this is rarely the case in the USA. No idea why.

Albedo said:

Australian shopping centres often have two or even three different supermarkets within the same building. I've noticed this is rarely the case in the USA. No idea why.

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It's likely due to non-competition clauses in the lease. Most companies here will insist on a provision that other spaces in the same shopping center not be leased to similar companies, or dissimilar companies with similar products (i.e. a shoe store may be peeved if a sporting goods store with a large shoe department opens up right next door). The property owner can decide to decline the deal, since it restricts their pool of potential renters for other spaces, but generally they're pretty cooperative (the whole "bird in the hand is worth two in the bush" mentality).

The rationale behind it is pretty simple. You cut down direct competition and instead offer a variety of business types which, hopefully, pulls in a wider range of clientele. Maybe a customer's shoes just got chewed up by a new puppy, so they go to the shoe store to get some new ones. And look! There's a pet store right next door. Maybe if they buy some new chew toys, the puppy will stop eating their shoes. So the pet store benefits from the shoe store clientele, and vice-versa. If it's shoe stores all the way down, there's less chance of that sort of impulse visitor.

On the other hand, there's definitely something to be said for similar stores all in close proximity, so that someone who's REALLY into something can see a lot of it in one place. They get fewer of those "happen to be in the area" customers, but the excellent selection may draw in people from further away, which makes up the deficit. Outlet malls come to mind, and where I live, there's one street that's pretty much nothing but art galleries for several blocks.

I think groceries would be tricky to have in this format, unless it's more a collection of specialty shops: bakery, butcher shop, frutteria, etc. each business providing a restricted range of products, or a collection of sellers who provide something special and unique (like you'd see at a farmer's market), because groceries are everyday purchases. People are willing to drive two hours to an outlet mall for bargains, or to a farmer's market for special locally-grown whatevs, but they probably don't get out there that often. Your average grocery store has to draw the bulk of it's clientele from the people who live nearby. It's the place you swing by to grab milk on the way home. It behooves that sort of store to gather as much of that business to themselves as possible.

Lol, I waaay overthought that.

Interesting observation! In college, we did an exercise where we were to decide where within a population to place businesses depending on if they were cooperating or competing. Cooperating businesses were best dispersed throughout the population for customer convenience, and you didn't need to do as much marketing or pay as much attention to service or product quality. However, competing businesses were best clumped together in the population center. In this scenario, all customers have to travel the same distance, and you get them to buy from you through your marketing, product quality, price, service, etc.

Tazlima said:

It's likely due to non-competition clauses in the lease. Most companies here will insist on a provision that other spaces in the same shopping center not be leased to similar companies, or dissimilar companies with similar products (i.e. a shoe store may be peeved if a sporting goods store with a large shoe department opens up right next door). The property owner can decide to decline the deal, since it restricts their pool of potential renters for other spaces, but generally they're pretty cooperative (the whole "bird in the hand is worth two in the bush" mentality).

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Excellent point! I knew a coffee/sandwich shop/book store owner who set up in a strip mall. She specified no other coffee shops, but didn't specify no other food. In comes Subway and nukes her lunch crowd. The store didn't even last a year after that.

I really like the idea of lot where there are several boutique stores serving different specific food needs:

Dry goods shop: toilet paper, paper towels, napkins, etc.
Non-perishable shop: pastas, rice, etc.
Produce shop: Lettuce, tomatoes, peppers, potatoes, garlic, carrots, celery, etc.
Butcher shop: steak, chicken, pork, venison, bison, elk, etc.
Seafood store: salmon, bass, walleye, shrimp, crab, lobster, etc.
Bakery store: breads, pastries, etc.
Confectioner store: candies, molasses, syrups, etc.

Well crap, now I'm hungry! LOL

CBJason said:

I really like the idea of lot where there are several boutique stores serving different specific food needs:

Dry goods shop: toilet paper, paper towels, napkins, etc.
Non-perishable shop: pastas, rice, etc.
Produce shop: Lettuce, tomatoes, peppers, potatoes, garlic, carrots, celery, etc.
Butcher shop: steak, chicken, pork, venison, bison, elk, etc.
Seafood store: salmon, bass, walleye, shrimp, crab, lobster, etc.
Bakery store: breads, pastries, etc.
Confectioner store: candies, molasses, syrups, etc.

Well crap, now I'm hungry! LOL

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Following on from Albedo's post: That's how malls are set up in Australia. More than one supermarket, a couple of butchers, greengrocers, bakeries, health food shops, book shops etc.

Tazlima said:

The rationale behind it is pretty simple. You cut down direct competition and instead offer a variety of business types which, hopefully, pulls in a wider range of clientele. Maybe a customer's shoes just got chewed up by a new puppy, so they go to the shoe store to get some new ones. And look! There's a pet store right next door. Maybe if they buy some new chew toys, the puppy will stop eating their shoes. So the pet store benefits from the shoe store clientele, and vice-versa. If it's shoe stores all the way down, there's less chance of that sort of impulse visitor.

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Malls operate on a phenomenon known as the Gruen Transfer, something I did not know had a name until I watched The Gruen Transfer.

Helix said:

Malls operate on a phenomenon known as the Gruen Transfer, something I did not know had a name until I watched The Gruen Transfer.

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Interesting!

I never knew there was a name for the concept.

Chris P said:

Interesting observation! In college, we did an exercise where we were to decide where within a population to place businesses depending on if they were cooperating or competing. Cooperating businesses were best dispersed throughout the population for customer convenience, and you didn't need to do as much marketing or pay as much attention to service or product quality. However, competing businesses were best clumped together in the population center. In this scenario, all customers have to travel the same distance, and you get them to buy from you through your marketing, product quality, price, service, etc.

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This can be seen in operation in big cities, where you often see concentrations of specialized stores in one area. It actually makes things easier for consumers: what you lose in having to travel to the Doodad District you gain in being able to compare prices without excessive shoe leather costs, as well as from all the other benefits of competition.

Um, isn't this kinda how food shopping used to be? You went to the butcher, then the bakery, then the green grocer... until someone came up with the idea of a combined market... a "super market", if you will.

The thing with the little specialty shops all within walking distance exists lots of places -- they're called cities, heh.

Within three blocks I have the regular market, the fish market, a chocolatier, a couple of bakeries, a produce-centric market with a big cheese dept... etc.

jennontheisland said:

Um, isn't this kinda how food shopping used to be? You went to the butcher, then the bakery, then the green grocer... until someone came up with the idea of a combined market... a "super market", if you will.

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Lol, yep. I can totally imagine back when one-stop shopping became a thing, people getting really excited. "You can buy everything in ONE PLACE?! Only one checkout line? That's awesome!"

It's like cars vs. horses. Wherever one is common, people think the other is extra nifty (Or is that just me? I would love to live somewhere where a horse could be my main form of transportation).