On September 19, a new Star Market grocery store opened inside the Hub on Causeway, a mixed-use shopping facility in the TD (Boston) Garden. However, this brand-new supermarket was opened without any dedicated parking—an interesting decision to retailers like grocery stores, as well as to professionals in the parking industry. The decision to build a new supermarket without dedicated parking was made after developers researched habits of their urbanite customers—a much more site-specific developing tactic
Parking availability could become a determinant to whether a person shopping for groceries will buy in-store versus online.
“That’s a pretty bold statement—they haven’t provided any dedicated parking. It’s probably too early to tell. But, what does that mean to their business?” Asked Guy Stutz, Vice President of Real Estate Development for Stop & Shop.
The industry professional used the new Star Market opening at TD Garden as an example when speaking to parking trends for American grocery stores. Stutz is familiar with parking development for supermarkets—for customers parking in a city versus a suburb, or when parking at a stand-alone location versus a mixed-use facility.
“There are a lot of conditions you have to look at… Who is the shopper, where are they coming from, how close by are they? Are they doing shopping for a family or for a single person? Are they walking? Is it on their way home from work? All of these things play a part to how the customer will react,” said Stutz.
Making the Most of New Options
It seems developers have more options than they’ve ever had in the past—requiring companies like Star Market or Stop & Shop to look more specifically at the needs of their local customer base. What’s more, Stutz agrees that if parking is part of a vertical development, it had better be done efficiently.
“If you have bad design, difficult access, or it’s just a pain to go to, then that’s going to be a negative parking experience,” said Stutz. “I think you are seeing more vertical development with [smarter and more efficient] parking divisions. You’re finding more and more retail centers where you have multiple levels—that wasn’t a common environment even 10 years ago for most supermarket companies.”
However, vertical development in urban areas won’t spell the end of parking for grocery shoppers in cities—quite the opposite, actually. Supermarket companies will simply have to do more research to find out what type of parking is right for their customer base.
Hundreds of miles from TD Garden, in a setting not so different from Boston—a Washington D.C. Harris Teeter supermarket has invested in more convenient garage parking for their customers. The mixed-use facility in D.C. is offering new subsurface parking for free as a value-add for their customers’ convenience.
“[Harris Teeter’s] concern is that revenue at mixed-use developments is typically less than in strip malls. In part, due to the complexity of parking and the fact that parking is usually less visible in these areas,” explained Rupesh Patel, owner of Kyosis Parking Technologies.
Patel and his team at Kyosis have been enlisted to transform parking at the Harris Teeter complex into a smart and efficient experience for shoppers. Development of this parking area should combat the revenue disadvantage that can plague stores in mixed-use structures by making it easier for customers to access this supermarket.
“We’re adding signage to be visible on the street to show how many spaces are available in the garage,” said Patel. “Inside the garage, we are putting sensors above each space to improve navigation. When customers come in, they will know exactly how many spaces are open and how to get to the open space.”
Parking availability (especially in metropolitan areas) could become a determinant to whether a person shopping for groceries will buy in-store versus online. Currently, 3 percent of American grocery sales take place online, according to CNBC. While that number is growing, Americans are still frequenting their local supermarkets almost twice a week—a statistic that displays how important grocery shopping in a physical store can be for U.S. residents.
Competing with Online Sales
“By investing in and improving parking, [Harris Teeter is] creating an experience you cannot get online. You can’t smell or touch the food you like when shopping online,” said Patel. “Parking can be one determinant why someone would choose to grocery shop online. When I shop online, I know what I want. But, when you’re in-store, your eyes can be bigger than your stomach sometimes. So, you have the potential to make more money if you can save in-store purchasing by improving parking.”
Still supermarket companies like Stop & Shop and Harris Teeter offer e-commerce options via Peapod and Expresslane. As of now, these services may not have much of an effect on in-store purchasing. However, this may become yet another factor for grocery store parking development in the future.
“[Peapod] reduces demand for parking and people coming to the center. But, if you’re used to shopping with your car, you’re not going to change those habits,” said Stutz. “While there’s directional evidence that parking demand is going down, I don’t think it’s significant enough that you would design different than you would today—but that’s clearly gonna happen over the next 5-10 years. It’s just difficult to predict when that happens and to what magnitude.”
Despite all the fuss over supermarkets in densely populated places, businesses like Stop & Shop don’t necessarily make their lion’s share in these areas.
“We have a lot of high-volume stores that are suburban with surface parking in more traditional strip centers or neighborhood centers. Our busiest centers are not in the city at all,” said Stutz.
Providing parking in a single-location, suburban grocery location is more of a straightforward equation. Grocery stores are having their biggest parking challenges in cities—most likely the setting for parking companies like Kyosis who work with these grocery stores.
“Our sister company, Giant in D.C. is more engaged in vertical development. [Stop & Shop hasn’t] seen a lot of vertical development in parking—in Boston there is a handful,” explained Stutz. “But, certainly our experience in D.C., we’ve seen that you absolutely need a parking management system whether it is ticketed, reimbursement, or controlling how long one can park there.”
It’s clear that the hardest battles for proper parking will be fought in the nooks and crannies of densely populated American cities. Grocery store development is an animal all its own inside the American parking industry. As a result, retail developers will continue to assess the parking provisions they must make for their ultra-specific customer base. Moving forward, smart parking management will be a difference-maker with implications for revenue in grocery stores nationwide.
Ryan Gallagher is the Marketing Coordinator for 20 Lemons, LLC– A strategic marketing company out of Woodbridge, NJ. He can be reached at Ryan@20lemons.com
