Wednesday, November 12, 2008
Phoenix, Arizona Metro Market Region Report: 'The Big Surprise' -- Surprise, Arizona Ground Zero For New Food and Grocery Store Openings
Surprise, Surprise......Surprise, Arizona that is.
Welcome to the city of Surprise, Arizona, in the Phoenix Metropolitan region's west valley area.
What's so interesting or surprising about Surprise, other than its name, you ask?
Well, the city just happens to be ground zero for new food, grocery and club stores this year and next. That's all. There's a whole lot of competition brewing in Surprise.
On Friday, the residents of Surprise, Arizona ,which has about 100,000 people and is located 45 minutes from downtown Phoenix, finally got a grocery retailing surprise they had been hoping for since 2007. That new, much desired, grocer is Trader Joe's, which the residents of Surprise voted as the city's "most-wanted" new retailer of any format in a survey conducted by the city's economic development department in 2007.
The city's economic development department conducted the survey to gauge residents most-desired retailers. Trader Joe's topped the list overwhelmingly at number one.
And surprise, just one year later, the residents of Surprise have had their retail wish fulfilled.
On Friday, November 7 a new Trader Joe's market opened in Surprise, Arizona.
The specialty grocer, known for selling low-cost natural and specialty products and fresh foods, closed its Sun City, Arizona store at 13602 N. 99th Avenue and moved 7 miles to 14095 W. Grand Ave. in the fast-growing city of Surprise.
Retailer Jo-Ann Fabrics and Crafts and club store chain Costco took second and third on the Surprise Economic Development Department's 2007 survey, the results of which city officials printed out on postcards and distributed at the International Council of Shopping Centers conference in September 2007 as a way to market Surprise to retailers, a spokesperson for the city's department explained to Fresh & Easy Buzz recently.
Trader Joe's was one of the retailers given a postcard, showing them at the top of Surprise residents' choices, at the conference. A mere two months later, Trader Joe's officials announced they would open in the Surprise Valley Station plaza shopping center near Parkview Place and Grand Avenue in the city, and close the Sun City store.
But just because they didn't score at the top of the Surprise residents list in the 2007 like Trader Joe's and Costco did, that isn't stopping a host of other food and grocery retailers from attempting to surprise the residents of Surprise, Arizona by opening new stores in the city.
For example, Tesco will open its first Fresh & Easy combination grocery and fresh foods market in El Mirage, next door to Surprise.
And mega-retailer Wal-Mart, which also likes to surprise, opened one of its 40,000 -to- 45,000 square foot Neighborhood Market supermarkets at Reems and Greenway roads in Surprise, in April of this year.
It therefore shouldn't be a surprise then if when the Fresh & Easy Neighborhood Market opens early next year, the residents of the Surprise area will see a battle of the "neighborhood markets," Tesco's and Wal-Mart's respective versions, perhaps taking the town by surprise.
But Wal-Mart isn't just going "neighborhood" in surprise. The retailer also is building one of the Wal-Mart Neighborhood Market's big brothers, a Sam's Club club store, in Surprise. The Sam's Club big box store, which will open next year, is being built at Bell Road and Loop 303 in Surprise.
That the Sam's Club is coming to town was actually a surprise to many of the residents of Surprise, Arizona. As you recall, at the top of their survey wish list, right after Trader Joe's, was their desire to have a Costco club store come to Surprise. And since they got their Trader Joe's so fast, just a year after the survey, many residents just naturally thought a Costco would come next -- and soon.
But, a Sam's Club is pretty close to a Costco. Same format, same size, same merchandise mix. Both sell lots of fresh foods and grocery products. Some differences though, but not all that many in the bigger scheme of things retail.
But guess what? Word is Costco is looking into Surprise. Perhaps the residents won't be unpleasantly surprised after all. They just might end up getting that Costco, retailer wish list item number two, right after Trader Joe's.
Meanwhile, residents of Sun City, which is primarily a retirement town with lots of high income retirees, are mourning the loss of their beloved Trader Joe's, which was the very first Trader Joe's store to open outside of California where the chain was founded and still is headquartered.
We're told groups of Sun City retirees already are putting together once a week, regular car pools so they can travel the 14 mile round trip from Sun City to Surprise so they can continue to stock up on specialty and natural food and grocery items.
This won't come as a surprise to Trader Joe's. The knew that by closing the older store in Sun City and building a new, larger and more modern Trader Joe's in fast-growing Surprise, they would gain an entire new core of shoppers, the Surprise residents, while still maintaining most of their existing customer base in Sun City, since it's only seven miles away.
Shoppers regularly drive 30 -to- 60 miles round trip throughout U.S. metropolitan areas to shop at Trader Joe's stores. They've become a regional food shopping destination far beyond a local one.
The Surprise Trader Joe's will also draw shoppers from the nearby cities of El Mirage, Peoria and others close by in the metropolitan region.
Are only question is, with all of these new food and grocery stores open and opening in Surprise, along with the city's existing supermarkets, will they all be able to make it? (Well, we know Trader Joe's will based on that survey.) That's a surprise none of these retailers want to discover.
In the case of Tesco's Fresh & Easy, it appears to us the grocer needs to do plenty of pre-opening marketing and PR in Surprise. After all, the vast majority of the city's residents, as evidenced by their choices in the 2007 survey, are Trader Joe's fans and lovers.
Then there's Wal-Mart's Neighborhood market, which is already open. Then the Sam's Club coming to town. Lots of competition.
Wal-Mart is popular throughout Arizona. It operates over 100 Supercenters, Sam's Club's, Wal-Mart Neighborhood Markets and its newest format, Marketside, the small-format grocery and fresh foods stores similar to Tesco's Fresh & Easy, in the state.
Wal-Mart is becoming the dominant multi-format food and grocery retailer in the Phoenix region -- and in the entire state of Arizona. That shouldn't come as a surprise though since Arizona, and particularly the Phoenix Metropolitan market, has been one of the mega-retailer's top-five strategic growth markets in the U.S. for the last five years -- and continues to be for the next few years.
Wal-Mart has numerous stores in all of the formats mentioned above set to open next year. The retailer also has numerous stores in the pipeline set to open in 2010.
Additionally, Wal-Mart currently has four Marketside stores in the Phoenix Metro region cities of Gilbert, Mesa, Chandler and Tempe. A fifth Marketside is being built in Peoria, Arizona at present. Peoria is just a few miles from Surprise. But if you've been reading closely, that probably doesn't surprise you. Critical mass all around, for Wal-Mart as well as Fresh & Easy.
But Tesco is building a strong presence in the Phoenix Metro region as well. With 26 Fresh & Easy stores to date in the region -- and more coming -- it's beginning to build significant retail critical mass.
But -- can the upcoming Fresh & Easy store win the love of the residents of Surprise (and El Mirage), Arizona, like Trader Joe's has? That is the question for Fresh & Easy...and the others who didn't make the top of the survey list but want to offer residents of the city a food and grocery retailing surprise anyway.