Winnipeg Free Press - PRINT EDITION

Core grocer a challenge: expert

Kaufmann's report on concept's viability eagerly anticipated

  • Print
Peter Kaufmann says a downtown grocery would have to pull in $6 million to $7 million a year to survive.

Enlarge Image

Peter Kaufmann says a downtown grocery would have to pull in $6 million to $7 million a year to survive.

IF you're considering moving downtown as soon as a major grocery store opens in that area, you might want to buy some really, really, really green bananas.

Peter Kaufmann, a real estate broker at CBRE and the author of a soon-to-be-released report on the feasibility of a downtown grocer, said not only is there no magic bullet to fix the dearth of fresh produce and meat in the central business district, but entrepreneurs aren't lining up for the chance to get in the game, either.

A former city councillor, two-time Winnipeg mayoral candidate and longtime grocer, including part-owner of Kaufmann Foods at the corner of Donald Street and Broadway until 1999, Kaufmann knows of what he speaks. He predicts it will take somebody "courageous" to start a grocery store in the heart of downtown.

"It has to be somebody who can see the long-term picture and has a bit of money behind them. It's not going to be an easy thing," he said.

A downtown grocery store would look nothing like any of its suburban counterparts. About 10,000 square feet would be ideal, Kaufmann said, but the financial requirements are daunting.

"It would have to do $80,000 to $100,000 a week, or $6 million to $7 million a year in business, just to get it going and they won't be making much money. The margin in groceries is such that a net profit in a very successful grocery store would be in the two per cent range," he said.

A store would likely require an investment of at least $2 million to pay for new equipment and the latest bells and whistles, Kaufmann said. A would-be owner would likely need $600,000 to $700,000 of their own money to be able to borrow the balance.

"Then it's pretty precarious. You need the right landlord, the right rent and then you've got to pay business tax and property tax," he said.

Kaufmann's report could be released as early as this week and the man who commissioned it, Ross McGowan, president and CEO of CentreVenture Development Corp., is anxious to see it.

As old warehouses were converted into condominiums over the past 15 years and newer projects, such as the Glasshouse, are coming on board as part of downtown Winnipeg's rebirth, the one constant has been the need for a grocery store to support the 16,000 -- and growing -- people who live downtown.

The challenge has become more acute since the recent closures of Zellers in the Bay building, Extra Foods on Main Street and Food Fare on Arlington Street.

It has always been a bit of a chicken-and-the-egg situation, though. Residents need a grocery store before they'll move downtown and a grocery store needs a certain amount of business for it to be viable.

"We have committed to working with the various stakeholders to address the shortage of a grocery store," McGowan said.

No steps will be taken, he added, until he and his team are able to digest Kaufmann's report.

Even if a prospective buyer and a piece of property can be matched up shortly, it would still take 12 to 18 months before it would open, he said.

The grocery landscape has changed significantly since Safeway closed its downtown location at Broadway and Donald in 1979. Not only do fewer people make weekly grocery outings to fill their cupboards and pantries -- they tend to make fewer, smaller trips -- but large chains have become much more dominant in the market.

"Back then, 30 per cent of groceries were sold by independents, now it's less than 15 per cent," Kaufmann said.

geoff.kirbyson@freepress.mb.ca

Republished from the Winnipeg Free Press print edition May 22, 2013 B1

History

Updated on Wednesday, May 22, 2013 at 6:27 AM CDT: adds photo

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Stuart Murray announces musical RightsFest for CMHR opening weekend

View more like this

Photo Store Gallery

  • A pelican comes in for a landing Wednesday afternoon on the Red River at Lockport, Manitoba - Standup photo- June 27, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • July 1, 2012 - 120701  -   Canada Day fireworks at The Forks from the Norwood Bridge Sunday, July 1, 2012.    John Woods / Winnipeg Free Press

View More Gallery Photos

Ads by Google