.bodytext {float: left; } .floatimg-left-hort { float:left; margin-top:10px; margin-right: 10px; width:300px; clear:left;} .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 10px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 10px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 10px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} After two years of listening to people talk about the need for a grocery store in the Court Avenue district, Full Court Press Co. finally took the initiative. The group of friends who own several bars downtown, including The Royal Mile, Buzzard Billy’s and High Life Lounge, bought the only building they could buy on Court Avenue, a structure that had a history of its front façade falling into the street in the 1980s and extensive damage from the Floods of ’93.

After spending $380,000 to buy the building and $500,000 for major renovations, Full Court Press opened River Bend Trading Co. in June. Owning the building and putting in Shorty’s Pub, a small bar in the basement, along with a wine cellar, has boosted the business while the owners wait for the small grocery market and deli upstairs to take off.

“A new bar is the hot bar in town. Everybody comes and you’re crazy busy from day one,” said co-owner Andy Massoth. “People don’t think about grocery stores as the hot new store. But if we just get the people that live here shopping here on a regular basis, that will support the business.”

Four specialty or neighborhood grocery stores have opened since spring, introducing a new concept to Greater Des Moines. The owners, many of whom lack prior retail experience, have found successes and challenges with the market concept. One store is already shutting its doors.

Jerry Fleagle, president of the Iowa Grocery Industry Association, said the specialty markets have become a nationwide trend that’s slowly catching on with Des Moines residents. “Consumers are always interested in looking at new products,” Fleagle said. “The question is, will there be enough volume to make it profitable? Oftentimes, it takes time to develop the habits.”

Trouble at Jordan Creek

When the Market at Jordan Creek opened in March, it attracted a large following, said Rich Donckers, a consultant on the project. But as soon as the weather warmed up, sales dropped, which Donckers said is typical during the summer. However, sales for the West Des Moines market fell so much that the store is now up for sale.

The staff has dropped to 30 employees, from more than 100, and the owners are in the process of liquidating their assets. Donckers predicts the store could be closed by this week. “We were hoping the store wouldn’t have to close,” he said, “because it’s difficult to get things started up again.”

Though the wine, deli, bakery and cheese departments met or exceeded sales projects, Donckers said it was not enough to make up for a lack of sales in its café, prepared foods, produce and flower sections.

“We had some things that stood out as doing what we expected or better,” Donckers said, “and then there were several areas that really dragged us down. The traffic that we initially had in the store and the response was very strong, and you always expect it to drop some after you first open, but we just dropped further than we expected, and then never really started recovering to any large degree.”

Plus, the owners had large overhead expenses from running a 24,000-square-foot building and managing a large staff. The amount of waste generated by throwing perishable items away also became a huge financial drain, Donckers said, and they faced competition from supermarkets, including Hy-Vee, SuperTarget and Wal-Mart stores, as well as from nearby restaurants that cut into the market’s prepared food sales.

Fleagle believes the residential market surrounding Jordan Creek Town Center is still underdeveloped, making the grocery store more of a destination. “They spent a lot of money and may have had a little start, but the fact of the matter is, it was a location people had to drive to,” he said. “It’s not very close to where they live.”

On the other hand, Fleagle points to the Gateway Market as a success, because “they have a well-researched niche market, have good strong management, plus they also had covered themselves by incorporating parts of the business they already had that were successful into it.”

The Gateway Market owners agree.

“The customer response has been incredible,” said Paul Rottenberg, co-owner of the market, which opened April 23 on the southeast corner of Martin Luther King Jr. Parkway and Woodland Avenue. Even after an initial rush had faded, all the departments “have met or exceeded our expectations,” he said.

Gateway is a specialty market in all aspects, from its produce to its grocery items to its wine, baked goods and café, with entrees prepared by six professional chefs. “We pretty much hand-select everything that goes into our market,” said co-owner and head chef George Formaro. “Everything you taste or see has been something someone said is a great product.”

The concept that has proved successful is to give people several ways to get a meal, from prepared entrees to the ingredients. “What’s been really uplifting is that they’re using all aspects of the store,” Rottenberg said. “We’re selling produce. We’re selling meat. We’re not just selling specialty items.”

Still the owners, who previously had been involved only in restaurant and hospitality businesses, never in retail, are still working out management kinks, including how many employees are needed, what products sell best and how to stock more products in a 1,000-square-foot grocery-store space.

“It’s harder than we thought it would be,” Rottenberg said. “It’s just a lot of employees and a lot of inventory. It’s just figuring out how to get everything priced right and get the right amount of people in the right place at the right time.”

Already the owners are looking at how to expand their 4,000-square-foot bakery, which is starting to outgrow its space now that it also produces bakery items for La Mie Bakery. Working with 200 vendors, they also are adjusting the grocery mix, and will add 60 more linear feet of grocery space to add organic baby food and expand the selection of bulk grains and nuts.

Neighborhood markets

In addition to specialty markets, two neighborhood grocery stores have emerged: River Bend at 208 Court Avenue and The Village Market at 325 E. Fifth St. in the East Village.

These markets have fared well, the owners say, but have not had the huge stream of customers that Gateway and the Market at Jordan Creek had when they first opened. They have focused more on standard grocery items with a few specialty products mixed in, and have attracted customers through special features, such as a gourmet deli and large wine selection.

River Bend’s primary goal is to have the 600 people who live within three to four blocks each spend $55 a week at the store. The owners are working with condominium and apartment building owners on being able to advertise directly to their residents. They will then look at attracting people staying in hotels or working downtown as bonus business to their residential base.

Wine has been the biggest success, with tasting on Thursdays and during the Downtown Farmers Market on Saturdays. The deli and meat departments have also been strong, however, not strong enough to support the meat selection Massoth would like. The owners have scaled back their meat offerings slightly with the hope that they will expand as sales grow.

Like meat, produce has been hard to sustain. “It’s very hard to keep perishable goods consistent,” said River Bend manager Tim Grimes. “Some weeks people hit us up and it’s great. You try to establish buying patterns.” The owners hope to bring in more locally grown products from Massoth’s 20-acre farm in Winterset.

The other challenge has been working with vendors. Some of their primary vendors visit the store once every two weeks, which means they cannot quickly restock an item if it sells out. The market currently employs about 12 people.

The Village Market has had results similar to River Bend’s, with the deli driving most of the business, said store manager Marcus Walsh. It features gourmet sandwiches, salads and wraps, such as the porco rosso (Italian for red pig) sandwich, drawing a lot of professionals working nearby.

“It’s been a positive response,” Walsh said. “The community obviously wanted a market here, and as we predicted, there would be small purchases, such as soda pop and candy bars, on a regular basis, and there would be the occasional toiletries and grocery items. But the lunch sales are the driving force.”

Wine sales have also been strong, Walsh said. And he has worked hard to draw people to the store with events such as “market hour,” where people can get a plate of food and glass of wine and enjoy it in the store. He recently began hosting a monthly wine and food pairing night. Within 48 hours of the notice going out, the event was full with 27 people.

To accommodate the number of people dining in-store, Walsh said he has had to add more tables and chairs. He also has cut down on the amount of soft drinks and candy the store carries after overestimating how much would be sold and has halted juice and smoothie sales after seeing a need to better train employees. He hopes to reopen the juice bar soon, offering more exotic non-alcoholic drinks with a variety of juices, herb-infused syrups and soda water.

The small market has been aided by low overhead expenses and waste-reduction measures, such as taking the locally grown produce that doesn’t sell by its peak and using it in the deli.

Walsh has eight employees now and would like to bump that up to 12.

Taking on the chains

The independently owned markets have the task of breaking into an industry dominated by supermarket chains.

For a specialty market like Gateway, the owners believe that many of their customers will still do their regular grocery shopping at the larger supermarket and then pick up their specialty items from the store. But the neighborhood stores need to sell standard grocery items to sustain the business.

“It’s hard for people to completely change their shopping habits overnight,” Massoth said.

“You can probably go to a specialty place and get everything you need. But it’s easy to go to Hy-Vee or Dahl’s knowing that you’re going to walk out with everything you need.”