Corner store for sale: loyal customers, tough location

Joe Storch is selling his corner store in Southern Village, a traditional neighborhood development (TND) in Chapel Hill, North Carolina. The 2,000 square foot store, with seating for 75, has already been through several proprietors since it opened in 1995. The Westgreen Market & Deli is typical of many small grocery stores located on the interior of TNDs which have struggled to survive. Storch reports gross revenue of $175,000 ($87/square foot), and a cash flow of $30,000. He is asking $45,000 for the establishment. Storch has been the most successful of the proprietors at this location. The store was planned by developer D.R. Bryan to serve daily needs of Southern Village residents. Storch reports that the store is an important part of the neighborhood. “I know the people who live in the immediate neighborhood by name, and know what they want,” he says. But the location of the store, on a green that gets little drive-by traffic from outside the development, has been a problem. “It’s important to have a store like this to service a neighborhood, but also important to have some way to get customers from the outside.” The town objected to having signs on the main highway directing people to the store, he says. Southern Village, under construction since 1984, has about 700 housing units built. Of these, only about 200 are in the immediate neighborhood of the Westgreen Market & Deli. These are the store’s core customers, who live within a five minute walk of the market and drive by it on their way in and out of the development. These customers are intensely loyal to the market, Storch says. Other parts of the development are 10 or 15 minutes by foot, and residents there do not drive by the store on a regular basis, Storch explains. They are not regular customers, he adds. Storch says that the store has been profitable, and as Southern Village gets built out in the next two years, the establishment should generate more revenues. But Storch, 27, is getting married and starting a family. Working seven days a week, eight to 10 hours a day, does not fit into his plans at the moment. The Westgreen Market & Deli underscores both the importance of a corner store to residents who live within a five-minute walk, and the difficulties of making such a store profitable. All stand-alone grocery stores on the interior of TNDs with little drive-by traffic from outside of their development have struggled. Some are barely profitable. Others frequently change proprietors. Others are subsidized by developers (that is the approach advocated by town planner Andres Duany, who says developers should look at corner stores as an amenity to provide, rather than a profitable business). Still other corner stores have gone out of business, such as the market in Belmont Forest (now Belmont Green), a TND in Loudoun County, Virginia. The successful corner stores have been built in tandem with other retail shops and are located in places accessible to substantial drive-by and foot traffic. For example, Miss Cordelia’s, a 6,000 square foot grocery store in Harbor Town in Memphis, Tennessee, is thriving with sales topping $300/square foot. This store is positioned to serve not only 900 households in Harbor Town, but also residents of adjacent developments.