Analysis methodology
This analysis looked at property records and worked with operators to get square footage for each store. It represents total square footage, not only area dedicated to sales.
It does not include retailers that sell more than food, such as Walmart or Target, or wholesale clubs such as Costco and Sam’s Club. It also does not include small independent shops or any of the area’s ethnic markets.
Square footage for Safeway at 1630 Pace St. in Longmont, which will close Sept. 9, also was not calculated in the per capita figure, total store count or total square footage.
Tania Petrulis is 1,000 feet from a King Soopers. She is 528 feet from Lucky’s Market. But she still misses the Whole Foods on Baseline that closed this past spring.
The south Boulder resident, who owns Table Mesa’s Sweet Ruckus, shops at both grocers regularly, but still travels across town to Whole Foods or Natural Grocers on Pearl for such specific items: humanely raised, antibiotic-free meat or seafood and Organic Valley milk. If she so desires, there are a dozen other grocery stores and small markets within a five-mile radius to meet all her shopping needs.
“I end up going to, like, four different places,” Petrulius said.
Few other areas in the nation are so blessed. On average, there is just over 2.6 square feet of traditional grocery store space per American, according to data from Washington, D.C.-based CoStar Group, a commercial real estate agency.
Boulder County has 4.4 square feet of grocery store space per resident. And that doesn’t include offerings at Target, Walmart, Sam’s Club or dozens of smaller mom-and-pop markets.
Elyse Morse picks out peas at the Natural Grocers store in Boulder.
Elyse Morse picks out peas at the Natural Grocers store in Boulder. (Cliff Grassmick / Staff Photographer)
But that abundance may be coming to an end. Analysts say the increased presence of European discount retailers, and the formidable threat of an Amazon-backed Whole Foods, is likely to result in closures across the U.S. Already in Boulder County, three stores have shuttered or plan to this year.
Those closures relieved a bit of pressure, but plenty remains, local operators say. The area has long been able to support an abundance of grocery shopping options, but even the most seasoned are wondering, in the new retail climate, can that continue?
“We probably have more space available for the consumers than can profitably be operated,” said Kemper Isely, co-president of Lakewood-based Natural Grocers by Vitam Cottage. “Some people will have to go out of business.”
More options than ever before
Even if a few more bite the dust, the area will still be well served. Boulder County has 34 traditional grocery stores with a combined 1.4 million square feet, according to an analysis by the Daily Camera and Times-Call.
But grocery stores’ dominance of food sales is not what it once was. As the country’s population grew, more players joined the grocery game: Discount clubs and super centers such as Walmart added more fresh food offerings to please Americans’ penchant for prepared meals and snacks. Convenience and dollar stores followed suit.
Traditional grocers responded by adding more locations. Nationwide, the amount of retail space dedicated to food items is at its highest point since 1950, CoStar found. That may be too much.
Traditional grocery stores’ market share has been shrinking since at least 1988, according to a 2016 report “Future In Food Retailing,” by North Carolina-based analytics firm Willard Bishop. That year, they dominated with 90 percent of all dollars spent. By 2015, it had decreased to 46 percent as super centers and convenience stores grabbed market share.
The competition and overbuilding has forced several retailers to slow growth plans this year, including Kroger, Whole Foods and Walmart, which axed its neighborhood market concept in Boulder this summer. Natural Grocers, too, has pulled back, with nine new stores on tap for the next 12-18 months, down from 23 in 2016.
Noel Baterna, an employee of Natural Grocers, organizes dog food at the Natural Grocers store in Boulder.
Noel Baterna, an employee of Natural Grocers, organizes dog food at the Natural Grocers store in Boulder. (Cliff Grassmick / Staff Photographer)
Peddlers of natural and organic groceries are also feeling the effects of competition as conventional grocers steadily encroach on their turf, said Isely. That segment “is probably overbuilt in many communities compared to what the demand is,” though he said Boulder County “seems to be an exception to that rule.”
Things are still going well for natural grocery brands, Isely said, with many expanding rather than contracting.
Sprouts has 32 openings planned for 2017. Alfalfa’s hopes to open two stores in Denver this year to add to its longtime Boulder store and Louisville outpost, added in 2014. Lucky’s Market will have 27 stores by the end of the year, all of those added since 2013.
Analysts agree that conventional grocers — Kroger, Albertsons-Safeway among others — are most likely to be impacted by over-saturation. That could have big implications for Boulder County, which, despite the area’s penchant for natural and organic foods, is dominated by the largest chains.
Kroger-owned King Soopers and Safeway, with eight local locations each, account for nearly half of the county’s 34 grocery stores.
Neither would admit to struggles. King Soopers — which has dedicated a significant portion of space in its Colorado stores to local, natural and organic products — said it was “pleased with year-to-date performance,” according to a spokesman.
The brand has opened three new stores in the past six months nationwide; 14 over the last five years. It has no planned closures, the spokesperson said.
Safeway, which will shutter a Longmont location in September, declined to answer questions. Via an emailed statement, the retailer said “we are focusing on growing our business and reinvesting those resources into remodeling our existing stores in Colorado.”
The Amazon effect
Whether natural or conventional, everyone has eyes on Whole Foods. Acquired by Amazon for $13.7 billion in June, prices have already been cut nearly in half on some products, and the online retailer is promising more efforts to shed the “whole paycheck” reputation and better compete with rivals on pricing.
Amazon’s dominance of delivery and online ordering positions Whole Foods well above its peers for the shift in retail that many anticipate will permeate grocery shopping as well. Already, half of the U.S. population is within a 30-minute drive of a Whole Foods, according to data provided by CoStar.
Whole Foods declined to comment for this story.
Local grocers are making moves to compete. Alfalfa’s has always offered free delivery, with a $50 minimum order; Lucky’s is “looking at different options,” Vice President of Marketing Ben Friedland said.
The merger is “going to force everybody to step up their game,” Friedland said. “I don’t think there’s any question it’s going to change grocery landscape.”
Alfalfa’s Paul McLean sees a silver lining in the deal. He’s counting on the high-mindedness of Boulder County’s citizenry when it comes to their food and business, a values system in which locality and sustainability reign supreme.
“A lot of people might look at this as ‘maybe these companies might be too big, and we want to start supporting small, local stores,’ ” McLean said, comparing Amazon to Walmart in its quest for dominance and its reputation for disrupting — and sometimes bankrupting — small businesses.
“Walmart wiped out a lot of people,” he said. “People don’t forget that.”
McLean and others say price is only part of the equation. Globally, consumers rank three factors more important than price, according to a 2016 study by Nielsen: high-quality produce, which 57 percent of respondents ranked as top priority; convenient location, most important for 57 percent; and product availability, 54 percent.
Price is still a priority for some, especially Boulder County’s growing number of seniors on fixed incomes, said Jeanette Cox, during a recent shopping trip to the soon-to-close Safeway in Longmont.
Cox frequents the King Soopers across the street from Safeway, which she says is the cheaper option. Her neighbors, mostly fellow seniors, go to King Soopers or Walmart, just 3.6 miles away, to chase the best deals.
“We’re all in retirement,” she said. “We’ve got to make our money last.”
Shay Castle: 303-473-1626, castles@dailycamera.com or twitter.com/shayshinecastle