Key Food Market to Replace FreshGrocer in September

[ruhudsonfan]

Purchasing power of students is irrelevant.

This is really quite simple.

The Grocery business is a low margin business--like 3% low. There is no margin--pardon the pun--for error.

So, when you run a grocery store you rely on a few things to combat the low margins.

1. Prepared foods--there is value add there and margins approach the mid teens.

2. Private labels--You think Stop and Shop sells Stop and Shop bbq chips for half the price of Lays because they want to do you a favor or because the margins on private label items are in the low 30s?

3. Bakery--see # 1

4. Volume. Volume. Volume. I can live on 3% margins if I put a few THOUSAND people through my store everyday.

Coming back to Key Foods

1. If they focus on this, people in NB will go for it.

2. They don't private label

3. See # 1.

4. No chance they do big numbers.

Run that analysis through your flux capacitor and you'll have a business that is on the ropes from jump street. I hope they make it, but I wouldn't feel confident about it.

 

[Upstream]

4. Volume. Volume. Volume. I can live on 3% margins if I put a few THOUSAND people through my store everyday.

You can get away with lower volume if you have higher margins. But while Stop & Shop and Shop-Rite, 3 miles away, are selling Campbell's soup and Kellogg's cereal at 3% margins, you can't be successful if you rely on selling the same at 20% margin because your customers will just get into a car and drive 3 miles to save 17%. So the only options are to use prepared foods, fresh foods, and bakery to drive your sales and margins. And that's only possible if you aim toward the higher-end of the market, not the lower-end.

 

[NotInRHouse]

In my experience having lived there (off campus junior and senior year and buying food) that prepared food would do well. In my time there, yeah I at at Wendy's in the student center probably once a week but you can be sure that not everyone was doing that or would do that now with all this gluten, organic nonsense going on. I went to Stop n Shop, and I had a driveway but not everyone has a car and also, not everyone wants to move it because it's so crazy to get a spot.

A prepared lunch or dinner in the $5-10 range, your semi prepared stuff like mac and cheese or frozen food, cups and plates, fruits, snacks, and "chasers" like soda and juice will move. Yes RU isn't a rich kid school, but again, people have to eat and some of the meal plans a decade ago were like $12 a meal. Inevitably, even then, and I like to eat, I was not going to eat Wendy's or APB or Giovanelli's or what have you, every day.

 

[Jonny S]

In all honesty, as presently constituted New Brunswick won't have a supermarket that lasts more than a year. The numbers just won't work.

But that's just it. Luxury complexes are going up. Look at where Morristown was 20 years ago. The surrounding area in NB isn't as rich, although solidly middle class, but it's much, much denser. If a supermarket can just hold on for a bit, then the construction continues, and a lot of the non-citizens in NB change that and start getting food stamps, which is what ultimately doomed the Fresh Grocer's projections.

 

[retired711]

Was Morristown really that New Brunswick-like twenty years ago? It's hard to believe.

 

[NotInRHouse]

Yeah I don't think Morristown was that bad off 20 years ago, maybe ever.

Jersey City or Red Bank would be a better analogy, maybe Hoboken 30 years ago.

 

[ruhudsonfan]

Yeah I don't think Morristown was that bad off 20 years ago, maybe ever.

Jersey City or Red Bank would be a better analogy, maybe Hoboken 30 years ago.

Morristown circa 1995 looked NOTHING like NB does now.

Jersey City in 1995? maaayyyyyyyybe. But there was already much more high end housing stock established in Jersey City in 1995, than NB now.

I'm not familiar enough with Red Bank.

Hoboken in 1985 is more interesting. I would say that Hoboken was more solidly middle class in 1985. THe worst areas were probably comparable. Lack of access to basic amenities is probably close. The gentrification of Hoboken really hadn't started yet in 1985. It was about 5 years away.

 

[srru86]

Run that analysis through your flux capacitor and you'll have a business that is on the ropes from jump street.

The Eighties are strong with this one.

 

[ruhudsonfan]

Well done...well done indeed

 

[lawmatt78]

I really hope it succeeds. I think a big key will be selling value-added stuff to downtown workers and commuters. They should be killing it at lunch time and w/ "grab and go" stuff for people on their way home. Whatever else happens, there's no excuse not to get that stuff right.

 

[Leonard23]

When I was at Hopkins, I lived in a university apartment 1 year and off campus 2 years. I didn't have a meal plan those years. Although I ate in restaurants a lot (including university owned cafes), I also bought food at a supermarket. Most of my daily shopping was at Eddie's Market, a small, overpriced supermarket about a block from where I lived. But about once a month, we'd get into a friend's car and drive to Giant (now part of the same chain as Stop & Shop) to stock up on non-perishables.

I have to imagine that New Brunswick would in a similar situation. From the College Ave Student Center, there is a Stop & Shop 1.7 miles away in Highland Park, another 2.1 miles down Easton Ave in Somerset, and another 3.2 miles down Somerset Street. People looking for a midrange supermarket will get in their cars and drive to one of these nearby Stop & Shop's or a little further to ShopRite (especially since they'll need a car to get a large volume of groceries home). A midrange supermarket in downtown New Brunswick is going to have problems competing against these other nearby midrange markets that have lower rents and plenty of parking.

A low-cost supermarket in New Brunswick would serve poorer residents, but this doesn't need to be located in a high-rent building downtown. The downtown location is too expensive, and also remote from the center of the poor neighborhoods it is looking to serve. Also, I don't think that a low-cost supermarket would really serve Rutgers students, since typically low-cost markets don't provide the freshness and quality that young adults want or are used to from when they lived at home.

So that leaves an upscale market, with quality fresh options and a wide selection of ready to eat (or quick to prepare) options. Certainly this wouldn't serve the needs of the poorer local residents. It would serve wealthier residents living in the new luxury apartments being built. It would serve the needs of Rutgers students looking for an alternative to restaurants. And it would serve the needs of people who work in New Brunswick, looking to pick up dinner before heading home. And with the location across from the train station, it would serve the needs of commuters coming off the train.

When I was at Rutgers, we would drive to Edwards (now Stop & Shop) on Easton Ave & Sam's Club in East Brunswick to do our grocery shopping. With all of the good quick eateries in NB, like Hansel, I can't imagine many people (students, middle class or yuppies) frequenting a grocery store for a lot of prepared foods, many of which aren't as good as the quick eateries. I know I didn't & neither did anyone I know in NB or a few yrs later in Hoboken for that matter. I'd cook some meat, shellfish or fish that I bought at the grocery store or I'd walk out the door to grab food from 1 of the many quick eateries, whether it was Hansel, Marco's, Frick & Frack, Hole in the Wall or elsewhere.

 

[NotInRHouse]

I think there are a lot of really quick and affordable lunch places near the store (Efes, Hole in the Wall, Jimmy John's, Platters, etc...there are probably others that would be new to most of us. I do not think the store can bank on a lunch crowd, unless they have Wegman's type options.

 

[Leonard23]

I think there are a lot of really quick and affordable lunch places near the store (Efes, Hole in the Wall, Jimmy John's, Platters, etc...there are probably others that would be new to most of us. I do not think the store can bank on a lunch crowd, unless they have Wegman's type options.

Even with Wegman's type options, I think it's a losing proposition because more people would still eat elsewhere.

 

[derleider]

I really hope it succeeds. I think a big key will be selling value-added stuff to downtown workers and commuters. They should be killing it at lunch time and w/ "grab and go" stuff for people on their way home. Whatever else happens, there's no excuse not to get that stuff right.

Not really. Because people will grab and go at the cheaper, easier to park at supermarket out by their suburban house.

And as others have said - there are plenty of lunch places in NB - from low end stuff like sandwhiches at 7-11 all the way up. No need to go to a supermarket for that. If a supermarket is relying on the lunch crowd to make it, I think thats gonna be a losing proposition.

 

[lawmatt78]

Not really. Because people will grab and go at the cheaper, easier to park at supermarket out by their suburban house.

And as others have said - there are plenty of lunch places in NB - from low end stuff like sandwhiches at 7-11 all the way up. No need to go to a supermarket for that. If a supermarket is relying on the lunch crowd to make it, I think thats gonna be a losing proposition.

I'm not talking about people who need to park; I'm talking about people who work and/or live within a few blocks of the place. That's a good amount of people.

Again, I have no idea if this place will make it, but value-added stuff has to be an emphasis, as others have noted.

 

[Upstream]

I'm not talking about people who need to park; I'm talking about people who work and/or live within a few blocks of the place. That's a good amount of people.

Again, I have no idea if this place will make it, but value-added stuff has to be an emphasis, as others have noted.

Plus the people getting off the train in the evening.

But if it only replicates the limited grab-and-go offerings of nearby Stop & Shops or Shop-Rites, then it will fail, because there is nothing differentiating it from any of the other markets a few miles away. It needs to be Wegmans level or higher.

 

[HPNJRUfan]

This thought just crossed my mind last night, as I haven't seen it mentioned at all... Will the new Key Foods also have a beer/wine section similar to FreshGrocer?

 

[derleider]

Plus the people getting off the train in the evening.

But if it only replicates the limited grab-and-go offerings of nearby Stop & Shops or Shop-Rites, then it will fail, because there is nothing differentiating it from any of the other markets a few miles away. It needs to be Wegmans level or higher.

Do they have the space for that. Wegmans by me has a HUGE take our section. The size of a decent restaurant buffet, plus a dining area.

 

[scarlet night]

This thought just crossed my mind last night, as I haven't seen it mentioned at all... Will the new Key Foods also have a beer/wine section similar to FreshGrocer?

I was recently told they would

 

[Jonny S]

Opened today, did anyone go? I may make the pilgrimmage to check it out.

 

[Tango Two]

As of Friday morning, residents can shop again as Key Food supermarket held its grand opening at 7 a.m., offering everything from fresh produce to international food products.

Store operator Kevin Kim said the store took about four months for construction, and even on the first day has seen a lot of customers coming in.


Link---> http://www.nj.com/middlesex/index.s...upermarket_holds_grand_opening_in_new_br.html

 

[scarlet night]

I went today, kind of a madhouse. Big produce section, still sells beer and wine.

 

[Korbermeister]

Went, in, walked around,bought a what-used-to-be pint of Haagen Dazs ice cream for $1.99 on sale (regularly $5.49 which is Quik Chek pricing). The store was busy but that was is be expected on a grand opening. There were physical changes to the interior space but they were minimal; you can still 'see' Fresh Grocer if you were familiar with that store. They expanded the produce area and added a live plant/flower station by getting rid of the prepared pizza section that was on the left as you entered the store. The prepared food on the right looked lackluster and some of the trays were empty. the floor was crowded with merchandise, both displayed product and pallets (which looks like they had yet to be processed) which made the area by the seafood counter crowded. The beer/wine section was shrunk to allow for the adjacent aisle to be expanded so it could accomodate a massive stair dispay 10' high of product which was impressive but serve little purpose other than to distract. Produce displays were impressive. the foreign food aisles were impactful. they got rid of the self serve registers by the exit. noticed the interestingly named 'That Indian Drink' yogurt product. The seating area was unchanged and there were no plastic utensils or napkins for anyone to use if they wanted to 'dine in'. That whole area btw was unchanged from the days of FG, including the flat screen and the faux fire display, neither of which were functioning.
New brunswick did revert Kirkpatrick st. in front of Key Food to one-way to accomodate street parking on both sides, in addition to adding parking on the side of Church street blocking the entrance/exit ramps of the soon-to-be-demolished (hopefully) Ferren Deck.

My impression was: it's a supermarket. Whether it survives or dies will be up to management.

 

[Cofifa]

Went after the gym at 7:30 am and impressed with the seafood and produce section . Lunchtime was a mad house . People In the office said prices are good.....important to the City that they are successful

 

[RUSK97]

Just throwing this out there...why do you think Somerville has successfully supported a supermarket in its downtown core (Shoprite) and it appears to be thriving, but that NB has not to date? Personally, I think the Fresh/Key location is central and many more people technically cycle through the area than the Somerville location which really is hidden away behind Main Street.

 

[retired711]

Just throwing this out there...why do you think Somerville has successfully supported a supermarket in its downtown core (Shoprite) and it appears to be thriving, but that NB has not to date? Personally, I think the Fresh/Key location is central and many more people technically cycle through the area than the Somerville location which really is hidden away behind Main Street.

Somerville? Do you mean the historic town near Bridgewater with lots of fancy romantic restaurants, old architecture, a median family income of around $80,000, near 202 and right near I-287? What does New Brunswick have in common with that town?

 

[Upstream]

Just throwing this out there...why do you think Somerville has successfully supported a supermarket in its downtown core (Shoprite) and it appears to be thriving, but that NB has not to date? Personally, I think the Fresh/Key location is central and many more people technically cycle through the area than the Somerville location which really is hidden away behind Main Street.

I wouldn't call ShopRite in Somerville an urban supermarket. It is 4 blocks off of Rt 202, with a huge stripmall parking lot.

 

[Korbermeister]

ffor perspective, shoprite is on the rightt

this is main st. somerville. behind this condo complex is the shoprite

I wouldn't call ShopRite in Somerville an urban supermarket. It is 4 blocks off of Rt 202, with a huge stripmall parking lot.

 

[RUSK97]

I wouldn't call ShopRite in Somerville an urban supermarket. It is 4 blocks off of Rt 202, with a huge stripmall parking lot.

Are we referring to the same supermarket? Not the one off the Somerville Circle...the one right behind Main Street.

 

[RUSK97]

Somerville? Do you mean the historic town near Bridgewater with lots of fancy romantic restaurants, old architecture, a median family income of around $80,000, near 202 and right near I-287? What does New Brunswick have in common with that town?

I truly don't know the history of the towns, but both are county seats and house government functions, both have RWJ campuses, both have fancy restaurants, both have old architecture (one maintains it far better than the other), both are adjacent to major highways, both have sizeable immigrant populations, both have Fortune 100 campuses in-town or close to town. Differences are that one town houses the State University and a second hospital system and Somerville does not have much in the way of an African American population.

I'd argue the two towns have more in common than differences. So is it just the money? Are Somerville residents that much wealthier and that's what makes the survival of a supermarket viable?

 

[Upstream]

Are we referring to the same supermarket? Not the one off the Somerville Circle...the one right behind Main Street.

Yep. That one. Where Pathmark used to be. The one with the huge parking lot behind the new mixed use buildings on Main St.

 

[retired711]

I truly don't know the history of the towns, but both are county seats and house government functions, both have RWJ campuses, both have fancy restaurants, both have old architecture (one maintains it far better than the other), both are adjacent to major highways, both have sizeable immigrant populations, both have Fortune 100 campuses in-town or close to town. Differences are that one town houses the State University and a second hospital system and Somerville does not have much in the way of an African American population.

I'd argue the two towns have more in common than differences. So is it just the money? Are Somerville residents that much wealthier and that's what makes the survival of a supermarket viable?

Those seem like very superficial resemblances to me. Somerville is not Scarsdale, but it is certainly more prosperous and more convenient to motorists than downtown New Brunswick.

 

[Upstream]

The main difference between Somerville and New Brunswick is that one is suburban and the other is urban. Somerville's downtown is essentially 5 blocks long and 1.5 blocks wide. A big suburban ShopRite with a giant parking lot 1 block off the main street is no more out of place in Somerville than the suburban Stop & Shop with the giant parking lot 2 blocks off the main street is in Raritan 8 blocks away.

 

[Jonny S]

Somerville has $70k median household income and is surrounded by mega wealth. NB has $45k median income and is surrounded by middle class, albeit a lot more of them (and a lot more grocery options.) I think it has been mentioned before that NB's big problem with Fresh Grocer was that many residents are non-citizens so they don't qualify for public assistance.

Morristown is about the same size as Somerville, and in fact slightly poorer (although it's hard to tell - it has really nice parts, and then one much poorer neighborhood.) It's also surrounded by insane, insane wealth and there are a lot fewer local options. It supports a Whole Foods and a Kings, and the nicest ShopRite in the state is just outside city limits.

Plainfield has about the same population as NB and is technically wealthier, but no hope of stores and very minimal redevelopment.

I think it's the wealth thing. You keep those skyscrapers coming up though, and it won't be long before NB can easily support a permanent grocery store.

 

[Jonny S]

Finally went there today. The Fresh Grocer, before it went bust, catered to a more upscale clientele. Key Foods has less of an emphasis on prepared foods, is a LOT more cramped, and has much bigger selections of Latino (which were very much present at TFG, but not to this extent) and East Asian (lots of Korean items, I don't really understand it.)

It's definitely a heck of a lot better than Bravo, but not something I would go out of my way to go to even if I still lived in the area. The average ShopRite, etc... is much better.

Was also saddened to see that the downtown Hansel's closed again, and there are still a lot of vacancies on George.

 

[retired711]

From jonny S.'s description, it sounds like the management decided that it isn't enough to appeal to the campus community and to high-rises, but rather they decided they must attract the ethnic groups from the area.

I know there are many Latinos in New Brunswick; is the same true of Koreans and other immigrants from the Far East?

 

[Jonny S]

Nope. There is a big Chinese community in South Edison but they wouldn't come just for the store. There is also a Korean megastore in South Edison called H-Mart which is fantastic and most of the East Asian community in the area shops there from my understanding.

I'd be surprised if that was due to grad student demographics. My best guess is that with Key Food's deals with their suppliers, they have stores in Queens, etc... that cater to those demographics, and didn't make a lot of modifications for New Brunswick.

 

[NotInRHouse]

There are a lot of Koreans at RU.

 

[kennyschiano]

It will bomb - college kids prefer fast and quick and stock up on groceries when they visit their parents (my mom always implored me to shop in her closet for stuff she bought at sam's/costco or shoprite in the suburbs).

Also, it is nowhere near where the majority of students live.

 

[retired711]

It will bomb - college kids prefer fast and quick and stock up on groceries when they visit their parents (my mom always implored me to shop in her closet for stuff she bought at sam's/costco or shoprite in the suburbs).

Also, it is nowhere near where the majority of students live.

Kenny, that's precisely why the store is not relying on the campus community to support it, but instead seeking out "townies" (such as Latinos). I wonder if the store will be able to attract enough patrons from disparate groups to succeed.