Chic Shopping

Local grocery stores are taking on a big-city glow as companies spend millions of dollars to transform older buildings into trendy marketplaces that offer more choices, greater convenience and a warmer atmosphere.

Although today’s remodels can run upwards of $2.5 million a store, updating is less expensive than building from scratch and allows grocers to address changing customer needs and establish an identity in a highly competitive industry.

“We wanted to differentiate ourselves from Wal-Mart, and we wanted to differentiate ourselves from other stores in town. It’s not all about price anymore,” said Denny York, senior vice president and director of store development at Yoke’s Fresh Market.

Yoke’s, formerly called Yoke’s Pac ‘N Save, introduced its fresh market concept six years ago, when the chain was struggling.

The approach integrates community-oriented artwork, photos and antiques with expanded offerings of locally grown products, including organics, fresh seafood and the store’s own line of natural beef.

Remodels generate “double-digit” increases in sales, York said, and help protect a store’s territory when a competitor moves into an area. In the past five years, Yoke’s has grown to 13 stores and sales have increased by 39 percent. The company is currently remodeling stores in Sandpoint and Kellogg, Idaho.

Rosauers Supermarkets and Safeway Stores Inc. are also updating their chains. Renovations are transforming traditional buildings with boxy shelves into markets with tiny specialty shops, enhanced by soft lighting and enticing displays. Coffee bars are becoming standard amenities.

While busy shoppers might not spend much time admiring the soothing earth tones, they may stick around a little longer, and, in the process spend more money.

Rosauers recently spent nearly $4 million renovating its store on 29th Avenue in Spokane. The 21-store chain is owned by URM Stores Inc. and operates in Washington, Idaho, Oregon and Montana.

Mike Shirts, senior vice president for Rosauers, said the goal was to create a homey atmosphere while providing more of the products and amenities that today’s customers enjoy, such as wines, microbrew beers, natural meats, seafood and fresh, gourmet salads.

“So far our remodels have been very good investments,” said Shirts, adding that the updates typically increase sales by 15 percent to 20 percent.

The 29th Avenue project added a towering 44-foot façade and drive-through pharmacy. Murals painted by a Northwest artist that once hung near the front checkstands were framed and mounted in the entryway.

A food bar offers five fresh soups and 20 types of marinated olives. The deli has salads created by the chef at Huckleberry’s Natural Market, which is owned by the chain. A seating area with a gas fireplace was also added.

“We’ve got a pretty good coffee club here in the morning,” Shirts said of the group of regulars who frequent the new setting.

The 29th Avenue store is one of two local Rosauers that include mini-Huckleberry’s shops, with bulk foods, dry foods, health-related products and refrigerated and frozen food.

Across the street on 29th Avenue, Safeway is sporting the company’s latest “lifestyle” renovation, which incorporates a stylish environment with expanded assortments of fresh products.

“In our lifestyle environment we really look at catering to today”s shopper’s needs. We listen to our customers more than ever before” said Craig Johnson, district manager for 16 Safeway stores in Eastern Washington and Northern Idaho.

Lifestyle remodels cost about $3 million per store, depending on the size and condition of the existing structure, Johnson said.

Safeway owns about 1,775 stores and had sales of $38.4 billion in 2005, according to Hoover’s, a company that researches corporations. The corporation is about midway through implementing updates both locally and throughout the chain, Johnson said. For an industry that relies on a slim profit margin of 1 percent to 3 percent, remodeling hundreds of stores represents a huge cash commitment.

“It’s always a challenge in our business because we always operate on penny profits,” Johnson said.

Stores slated for updates include Safeways at Evergreen Road and Sprague Avenue, and Northpointe and Shadle shopping centers.

At the 29th Avenue Safeway, the floral department stands out with plank flooring and contemporary glassware displays that look like something from Pier 1 Imports.

Just inside one entrance, the deli has ready-to-eat and take-and-bake foods, including sushi, hot soups, pizza, salads and an olive bar.

The store’s line of take-out Chinese is being incorporated into many other locations, including the Market Street Safeway, which was recently renovated.

Johnson said shopping trends are changing as customers, who are increasingly pressed for time, try to come up with quick, healthy meals they can enjoy as a family.

Safeway even has a lifestyle coordinator, Mike Clutter, who ensures that the retail and remodel comes together smoothly as stores stay open during construction. Clutter also manages the Coeur d’Alene Safeway on Neider Avenue, which was renovated last year.

Some grocery chains made major updates several years ago. Albertsons remodeled its Spokane stores five or six years ago, a company spokeswoman said. The updates added coffee kiosks and expanded departments with natural, organic products and easy-to-prepare foods.

In 2001, Tidyman’s spent $1.5 million remodeling its Post Falls store to reflect the market trend. The project added a coffee bar, photo processing and other amenities.

Tidyman’s went under financially this summer, but that store and two others in the chain were purchased by Bonner Foods Inc.

For Yoke’s, being a small, independent grocer gives the chain greater flexibility when it comes to responding to changing customer needs and market trends, York said.

“The good ones (independent grocers) are surviving because they can make decisions quickly and do what their customers want,” he said.

Shirts of Rosauers, said the remodels are about positioning the company for the future in the highly competitive grocery business.

Most of the stores have been remodeled and six more are slated for major work, he said. It’s a never-ending process.

“By the time you get through the circle, you start again,” Shirts said. “If you’re really on top of things, you at least freshen things up every seven years.”