Market fits trend for smaller stores
On most afternoons, Jason Ergen, project manager at Katy’s new Harvest Natural Market, can be found in the grocery store’s “Bistro & Bar,” sitting on one of the black wooden chairs typing on his computer or texting back and forth with business partners.
Ergen has invested most of his time in making sure his market is exactly what its Texas-based investors envisioned — a Whole Foods-type of store with a smaller, even more specialized food offering, the type that Ergen is eager to say has taken over the grocery business.
“Customers, they’re now more than ever aware of what they want (in their grocery stores),” Ergen said as he checked his phone.
“You go into a huge supercenter, no one has time for that. People want to go in and out; so we give a smaller shopping experience. We fill our stores up by the trends that we find in what people want, like organic (products). We want to give the ultimate customer experience. Your neighborhood kind of store.”
Building that neighborhood feel is not just the business model embraced by Natural Harvest Market.
Grocery giants such as Whole Foods and Walmart are digging deeper in the smaller-store concept, with Walmart rolling out more of its neighborhood stores and Whole Foods announcing in May that it, too, would begin to build smaller retail facilities.
For grocery retailers, a large target through this concept are suburban towns such as Katy.
“The growth in Katy … and also the value of the homes around here, the families, and the kids — fit this market,” Harvest Natural Market director Gary Golden said.
The first store in its franchise, Harvest Natural Market had its grand opening on July 25. Inside of its 25,000-square-feet facility, shoppers will find what Ergen and Golden call a European market layout. This means most stops along the store — the bakery, seafood station, pasta section, wine room, “Italian corner,” deli, frozen yogurt store — are designed to seem like shops of their own.
The market only buys supplies from the top 10 most popular brands for food categories, according to Golden. It’s meant to bring in families and draw a younger crowd that has selective food trends.
“Sometimes kids or younger people get bored at big grocery stores. In stores like this one, they don’t, with what we offer and our size,” Ergen said. “It catches their attention.”
Drawing to more suburban shoppers is partly what Whole Foods is doing with its plan to roll out its “365” project aimed at opening smaller stores in 2016 for quick access and draw to younger customers.
One of the first five stores announced to lead the project around the nation will be in Houston’s Oak Heights area.
Katy already has one of the Houston area’s 10 Whole Foods locations, and the company values the small-store concept.
“It offers convenience,” said Whole Foods spokeswoman McKinzey Crossland, noting that the concept will find its way quickly to suburbs such as Katy.
Catering to suburban customers and building smaller stores is nothing new in retail. Retailers have had to cut costs and adjust to online competition.
Although aesthetically Golden and Ergen’s market is more comparable to stores such as Whole Foods and Trader Joe’s, which also has a location in Katy, Walmart has built two of its “neighborhood” stores in the community.
Walmart considers itself the pioneer of small-concept grocery stores in the United States, introducing them in 1998, according to communications director Anne Hatfield.
In the 2015 fiscal year, Walmart built about twice as many small stores than it did supercenters. For the 2016 fiscal year, which runs to Jan. 31, 2016, it will open approximately 200 more Neighborhood Walmarts, which are about 142,000 square feet smaller than supercenters.
Included in the 2016 fiscal year openings are the Katy Westheimer location, which opened in March half a mile from New Harvest Market, and a location on the corner of Highland Knolls and Westgreen that will open this fall, Hatfield said.
At least 11 Neighborhood Walmarts are in Houston and 640 in the nation.