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Local Grocers Stepping Up to Provide for Underserved

New Orleans
[gn_note color=”#6666ff”]The 2011 Lousiana & Mississippi Profile originally ran in the July 2011 edition of The Shelby Report of the Southeast. Due to reader requests we will be posting our Profiles from each edition of The Shelby Report. The profile will be published on theshelbyreport.com one month after it has run in print.[/gn_note]

by Katie B. Davis/staff writer

Since Hurricane Katrina hit the Gulf Coast in 2005, New Orleans has been, according to The Times-Picayune, “plagued by a grocer shortage.”

David J. Livingston, who analyzes supermarket sales in underserved areas for DJL Research, his grocery industry consulting firm in Wisconsin, told the paper that roughly 70 percent of ­residents have returned, but just half of the grocery stores have, especially many of the neighborhood stores, meaning long trips and a lack of options for consumers.

“Gentilly lost a real pistol of a store when Zuppardo’s did not reopen. The city lost a number of successful neighborhood stores from the hurricane, never to return, such as Circle and Meme’s,” Livingston said to the Times-Picayune, referring to the 7th Ward, Treme and Lakeview communities in New Orleans.

It’s difficult for the small grocers to come back because of the current credit situation, New Orleans Food Co-op President Michael Smith was quoted as saying. “Smaller stores can’t get the credit, and banks can’t lend to people who don’t have a lot of money.”

In an effort to solve the problem, New Orleans city officials rolled out plans for the Fresh Food Retailer Initiative, which will offer $14 million in loans to spur the development of grocery stores in some of New Orleans’ most underserved communities.

Money for the loans, according to The Times-Picayune, will come from $7 million that the city has received in community ­development block grants and $7 million in matching funds from Hope Enterprise Corp., a nonprofit community development ­financial institution.

Regardless of the proposed funding, however, longtime New Orleans retailers already are making grocery availability to the underserved a priority, and Rouses Supermarkets has been at the forefront.

The Thibodaux-based company, which according to its website is the ninth-largest independent retailer in the nation, is in the process of building a new supermarket in downtown New Orleans—set to open at the end of October—that will help fill a void that existed even before Katrina.

The 60,000-s.f. site will be a renovation of the former Sewell Cadillac building at Baronne and Girod streets.

“The Baronne Street location is two blocks from the Super Dome and the (New Orleans) Arena, so we’ll be a big part of all that activity,” said Donald Rouse, managing partner and son of company founder Anthony Rouse, to The Shelby Report. “This will be a unique store with three separate entrances. You’ll be able to enter into the fresh side of the store, or you can enter from elevators—we’ll have parking on the second floor—and then there’s an entrance from one of the streets as well.”

According to Rouse, the store’s fare will emphasize food on-the-go in the form of prepared foods and chef-inspired meals. The Baronne Street Rouses also will have a large wine selection; a floral department; sushi, burritos and fresh tortillas made in store; and beef will be dry aged there.

“We’re going to really have a fun time with this facility,” Rouse added. “A lot of the historic portion of the (Sewell Cadillac) building has remained, and we’ll bring in some new. I love the new and old mixture and I’m excited about this facility.”

Rouse said he and his company “continually hear how thankful people are that we’re opening a store in downtown New Orleans. This is an area that did not have a store—it’s called the Warehouse District—and there has been so much residential development around this area in recent years, and now there is even more on the horizon.

“The people who live here deserve a great grocery,” he said.

Rouses, aside from the new downtown store, has been busy remodeling existing New Orleans and metro New Orleans locations, including the store on Tchoupitoulas Street, the one on Franklin Avenue, one in North Shore and the 62,000-s.f. Carrollton Avenue location in Mid-City.

“We also have a couple of new stores going up in North Shore,” Rouse told The Shelby Report. “We’ve designed a special type of store for those two locations that will take it up another notch. Let’s just say that if most stores have seafood in the back, maybe our seafood will be right at the door when you enter the store.”

Rumored to be building a store on Carrollton Avenue to anchor a shopping center right across from the existing Rouses, according to The Times-Picayune, is Winn-Dixie.

Winn-Dixie had a store in the Mid-City area of New Orleans before Katrina, but it’s since become a Home Depot.

“I will acknowledge that there has been some media around a possible Winn-Dixie in that development (on Carrollton Avenue); unfortunately, none of that has come from us,” said Joey Medina, Western Regional VP for Winn-Dixie, to The Shelby Report. “I just can’t really comment on it one way or another at this time.”

Dealing with disaster

Since Katrina, the Louisiana/Mississippi region has faced its fair share of hardship.

With every disaster, however, from hurricanes to oil spills to flooding, local grocers have been there to help pick up the pieces both from a morale standpoint and an economic one.

“Fortunately or unfortunately, we have a lot of experience with managing through hurricanes, and over the last few years one of the things we’ve learned is that preparation is survival,” said Medina.

In that light, Winn-Dixie on June 1—the start of the sixth-month hurricane season in the Atlantic—began highlighting items necessary for a hurricane kit and during the first week of the month promoted a “stock up and save” sale in stores.

Winn-Dixie currently has 65 stores in Louisiana and Mississippi, mostly in the southern part of both states.

“Every year we do refresher hurricane training for all of our management team to make sure that generators are checked, the store’s storm shutters are checked and ­because communication is such a challenge during hurricanes, we make sure our phone lists and so forth are updated,” Medina said.

“We have a pretty thorough ­­pre-hurricane season training and huddle program that’s really benefited us and our team members the last ­couple of years.”

Still recovering from the oil spill

But there was no way for grocers to be prepared for the April 2010 ­explosion of the Deepwater Horizon oil rig and the aftermath.

“Right when the oil spill happened, we were severely affected,” said Rouse, “because we are the largest retailer of Louisiana seafood.”

And thanks to Rouse and his team’s efforts in the aftermath of the oil spill, the grocer still is.

“My son and coach Sean Payton of the Saints have been doing spots to promote Louisiana seafood and we’ve been really involved with the Seafood Marketing Board and getting the word out that Louisiana seafood is safe and is plentiful,” Rouse said. “We have a seafood cookbook that we’ve put out with a number of the local chefs, and we’re selling that cookbook in our stores with all the proceeds going to fund the fishermen around here. It’s a fund that we’ve raised money for a number of times with our goal this year being $100,000.

“We’re involved no matter what,” Rouse said. “We buy directly from the local fishermen, we know them all, we live here, we’ve been here for 50 years and we grew up with them, doing business with them. I think that’s what separates us from all our competition here—we’re the local company when it comes to Louisiana and Mississippi and the Gulf Coast. We’ve been here for over 50 years and we have all the contacts and all the friends and when someone thinks of a Louisiana product or Louisiana seafood, they have to think of Rouses and we want it that way.”

While the natural, or not-so-natural, disasters get most of the national and round-the-clock attention, in Louisiana and Mississippi grocers are community-minded no matter the circumstance or severity.

In celebration of its 50th anniversary in the Shreveport/Bossier City area, Brookshire’s and Super 1 Foods donated $1,000 to 50 local nonprofit organizations.

Organizations receiving donations included the adopted schools of each of the 13 stores as well as the Council on Aging, Boy Scouts of America, Salvation Army, Lions Club, Veterans of Foreign Wars, soup kitchens and food pantries, and other groups.

In 2010, Walmart stores, Sam’s Club locations and the Walmart Foundation gave more than $21 million combined in cash and in-kind donations to local organizations in the communities they serve in Louisiana and Mississippi.

“I think whenever you’re successful you should give back to the community,” Rouse said. “We have to be a part of the community and we have to give back. I grew up with my father running the business and that’s all I know, that’s what I saw him do. We love what we do and we’re passionate about what we do and we love to give back equally.”

Competition ‘rational,’ but still tough

Outside of the New Orleans area, both Rouses and Winn-Dixie are finding success with new formats, but facing some battles as well.

“I don’t think these markets are overstored,” Medina said. “I think that the market is right sized and I think it’s competitive, but it’s rational.

“I will tell you, though, from a competitive point, the thing that we’re dealing with just like all of the grocery chains in this market is the erosion from dollar and drug (stores).

“Every two miles there’s another Dollar General or Family Dollar and certainly the CVSes and Walgreens of the world, they’re trying to sell more and more groceries. That’s a huge challenge for us, these small stores that are coming in to erode our sales.”

A little more than a year ago, Winn-Dixie opened a 55,000-s.f., state-of-the-art supermarket at 70431 Hwy. 21 in Covington, La., that features a 24-foot-tall open entranceway highlighted by an outdoor farmer’s market featuring fresh produce from local growers.

The location, just across Lake Pontchartrain from New Orleans, was the Jacksonville, Fla.-based grocer’s first newly constructed ­location since 2004 and the first grocery store in Louisiana to receive the Environmental Protection Agency’s (EPA) GreenChill certification.

“The Covington store has been extremely well received,” Medina told The Shelby Report. “It’s been a big success for us, and specifically, the outdoor farmer’s market. I’ll give you an example of what I’m talking about: When we opened the store I was at a gas station across the street with my Winn-Dixie nametag on and a lady pumping gas asked me, ‘Do you work at that new Whole Foods Winn-Dixie?’

“That is a true story that my CEO has repeated several times,” Medina added.

“We’re continually looking for opportunities to open new stores in all of our five-state markets. We have announced plans to do 17 transformational remodels that will be similar to Covington if not nicer,” he said. “As time passes, you improve on what you learn and there wasn’t a lot that we had to improve on from Covington, but we will ­continue to upgrade, so 17 of our existing stores will be remodeled with all of the amenities that Covington has.”

In mid-May this year, in Lafayette, close to the University of Lafayette-Louisiana, Rouses opened the doors on its newest and most innovative store yet.

The new location on Bertrand Drive across from Cajun Field is run by Donald Rouse’s son Donny.

“He came at it from a more youthful angle,” the senior Rouse said of the Lafayette location. “The décor—when I designed the last store in Youngsville it had more warm, natural and earthier tones—he went more with stainless and lighter colors, lighter tones and just a different feeling.

“The layout is a little different as well. He really wanted to emphasize the fresh departments. Donny has the front of the store open and you’re able to merchandise on the porch outside the store.”

According to Rouse, upon entering the store is what’s called “Kitchen Central,” where chefs will cook throughout the day and evening.

“It could be a chef from a local restaurant or even one of our vendor chefs,” Rouse said.

The store will offer barbecue, panini sandwiches, artisan ­pizzas, a bakery, a seafood department, a natural and organic lifestyle center, a Reserve Wine Room, a world-class beer cooler and an extensive selection of fine wines, spirits and imported, local and craft beers.

“He’s really taken fresh to the next level with this store,” Rouse said of his son.

The Lafayette Rouses was the second of four new stores on the company calendar for 2011. A new store in Lockport, La., opened earlier this year, and along with the downtown New Orleans location opening in late October, a brand new store in Diamondhead, Miss., just started construction about 30 days ago and should be completed by the end of the year.

Also, Rouses will be opening up a store with a format similar to the Lafayette store in Covington, La., near the new Winn-Dixie.

“If everything continues to go right, we’ll be getting started on that in six months or so,” Rouse noted.

“The new store for us in Diamondhead is our first independently owned store that’s opened in Mississippi in some time from ground up,” Rouse added. “We’re excited about it. We were in a smaller facility that we’d bought—a transaction that we did a few years back. This will allow us to upgrade and do all those things that we love to do in a store.”

Also, in what Rouse called very ­exciting and good news for ­independent grocers in the Louisiana and Mississippi markets, a new warehouse is being built in St. Tammany Parish by Associated Wholesale Grocers (AWG), with the groundbreaking taking place at the end of June.

Openings and remodels abound

Albertsons LLC’s Southern Division held the grand opening of its newest store in Denham Springs, the company’s 20th in Louisiana, on May 4, and revealed its plan to remodel its Baton Rouge store base.

Albertsons’ new 57,500-s.f. grocery store at 402 South Range Ave. is the company’s first new store this year, and its second new store in Louisiana since Albertsons LLC was formed in 2006.

“We know what Louisiana ­customers want in a grocery store, and we’re well positioned to offer it to new customers in Denham Springs,” said Wayne Denningham, president of Albertsons’ Southern Division, in a press release. “Our store offers a full-service butcher block, fresh Gulf seafood shipped in three times a week, custom cakes, specialty cheeses, and made-to-order party trays.”

Store Director Mike Leggett added, “The Denham Springs store also has a fantastic selection of Louisiana ­staples. We’re sourcing some produce from Guidry’s Produce, as well as offering Zapp’s Snacks, Cousin’s Salad Dressings and Manda’s Fine Meats. And we couldn’t open an Albertsons location in Louisiana without offering Community Coffee, Blue Runner Beans, Chef John Folse Entrees and Tony Chachere’s Famous Creole Cuisine.”

The store has offered approximately 140 new jobs to Livingston Parish residents.

“Albertsons LLC remains strongly committed to the Louisiana market area, and our Denham Springs store is just one part of that equation,” Denningham stated. “In the coming months, all of our Baton Rouge stores will be refreshed and remodeled, making changes that we know Louisiana customers will love, and bringing a fresh, new look to our stores in general. So not only are we creating new jobs in the area, we’re also bolstering other local Louisiana companies with new work.”

Albertsons LLC operates more than 200 stores under the Albertsons banner in Arizona, Arkansas, Colorado, Florida, Louisiana, New Mexico and Texas.

In both Louisiana and Mississippi, Wal-Mart Stores Inc. has not only been busy with remodels, but also opened a new Supercenter in Many, La., bringing approximately 175 jobs to the area. The 150,000-s.f. Walmart, located at 5800 Hwy. 171, officially opened Nov. 10.

Aside from the opening in Many, in recent months Walmart has taken major steps to refresh the look, merchandising and customer experience in Louisiana and Mississippi stores.

As of June, Walmart’s presence in Louisiana included 80 Supercenters, four traditional discount stores, six Neighborhood Markets, 12 Sam’s Clubs and two distribution centers.

In the state in the last year, the retailer unveiled new store designs in Leesville, Bogalusa, Monroe, Natchitoches, Winnsboro, Westside, Pineville, Jennings, Baker, Denham Springs, Vivian, Franklin, New Orleans (on Tchoupitoulas) and Baton Rouge (Cortana Place).

In Mississippi, where Bentonville, Ark.-based Walmart has 60 Supercenters, five discount stores, one Neighborhood Market, seven Sam’s Clubs and two distribution centers, remodels were unveiled during the past year in D’Iberville, Oxford, Tupelo, Pearl, Beaumont, Batesville, Petal, Horn Lake, Houston and Waynesboro.

Walmart employs, in the two states combined, more than 61,000 people.

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