Sliding doors - a few parting thoughts about Albertsons

smoyers

Alas, Albertsons, we hardly knew ye.

There's a lot of speculation about what went wrong with Cape Girardeau's 13-month experiment with the country's second-largest grocery store chain, which closed its electronic glass doors for good last Thursday.

The obvious answer, of course, is not enough customers. They say the store simply was not profitable. An underperformer, they said.

But why?

Albertsons did a market study that showed them that a Cape Girardeau store had the potential to be a strong performer. So what went wrong?

A lot of folks are blaming the prices. They say Albertsons cost about the same or more as other grocery stores in Cape Girardeau, which didn't give shoppers a reason to switch.

Albertsons spokesman Walt Rubel acknowledged that Cape Girardeau's prices were based on the Memphis market, which Albertsons places Cape Girardeau in. Typically, Rubel explained, there's a base price for all the stores within each market.

Prices in metropolitan Memphis are higher than here, so why charge big-city prices in a town the size of Cape Girar-deau?

They didn't, Rubel said. While there is a base price predicated on market, Rubel said, adjustments were made to match local prices. They're not stupid. He said he realizes that stores in the outlying areas of the market have to be competitive with other stores in that community in order to succeed.

That's Business 101.

Besides that, Rubel said, he doesn't think the prices were a factor at all.

"Some of the highest-priced retail stores are the most successful," he said. "That's because customers see the value in the assortment, the overall selection. Apparently the store in Cape Girardeau just never gathered any momentum."

Dr. Gerald McDougall, dean of the Donald L. Harrison College of Business at Southeast Missouri State University, had his own take.

He said that Albertsons closing may be the result of a fundamental economic reality in Cape Girardeau -- that the size of our retail sector cannot support another comprehensive grocery store.

Beating Schnucks in the grocery store wars was a tough fight from the start.

"Schnucks had a competitive advantage being the long-standing member in the community with a strong reputation," McDougall said. "Therefore, Albertsons faced a very difficult task, and it would have required a very long-term commitment to make it into a profitable situation."

Time was clearly something Albertsons -- facing the problem of lowering their costs and reestablishing profitability at the national level -- didn't have.

McDougall said the closing sends a signal that if a different competitor wants to come into the market, they need to commit to the long haul.

They would also need to realize that area shoppers already have plenty of options. If people shop on the basis of price, they go to Wal-Mart. If they shop based on the breadth of product and a more full-service line, Schnucks is there.

The question for any new grocery store therefore becomes is there a sufficient number of people to support their store in either one of those arenas?

"Given our population and income base, that may not be possible," he said.

But it's not all glum.

The area should appreciate that competition is a wonderful thing. When Albertsons came in, other grocery stores countered with remodeling and expansions. Grocery stores here are now nicer than they were before Albertsons.

And, like a business broker pointed out to me last week, Albertsons took that property at the corner of Independence and Kingshighway and made it into prime retail space. If not for a grocery store, then something else. Maybe something that will work out.

While we don't forget that the closing has left a good many out of work, at least we should realize that our brief friendship with Albertsons was not all for naught.

Universal property

With St. Francis Medical Center planning to build its own $7.5 million health and fitness center along North Mount Auburn Road, the immediate question is what's going to happen the property of Universal Health and Fitness Center at 505 Mount Auburn Road.

It's still up in the air, according to Bob Hahn, vice president of development of the Drury family's Midamerica Hotels Corp, which owns the property.

"We're considering several options," he said. "We're still open to ideas."

St. Francis' lease for the property expires in 2004.

Hahn said the property would remain some sort of commercial use and that the property would not be rezoned to anything less than commercial.

Making a game of it

Plainswalkers Gamers Guild will be opening April 2 at 821-D Broadway, owner Rod Edwards said.

Edwards, 36, new to Cape Girardeau from Central Illinois, said the business will be a collection of card games -- like Pokemon -- and role playing games -- like Dungeons & Dragons.

"There's nothing like it in town," he said. "I've been wanting to open a shop like this for 18 years, and I've found a nice town and the opportunity to do it, so that's what I'm going to do."

The store will also carry accessories, like miniatures, dice and score sheets.

The store will also have tables where kids can play the games and tournaments will be held.

Downtown musical chairs

Catherine Dunlap, the director of Old Town Cape, tells me there's been a few changes in our historic riverfront retail district. Needful Things, an antique shop, recently moved from 200 Broadway to where Madder Rose Antiques Mall had been located at 40 N. Main.

Madder Rose, owned by longtime antiques dealer and current Cape Girardeau City Council candidate Evelyn Boardman, closed recently.

Marilyn's Hair Salon also uprooted and moved from 125 N. Main and to 221 Independence, the former location of Design Alliance.

Owner Marilyn Pind said that after 13 years at the one location, she needed a change.

Prime time

Westfield Shoppingtown West Park manager Jim Govro tells me that the mall has a new kiosk coming in. Prime Wireless, a cell phone company, will start operating its 150-square-foot kiosk, to be built in front of Babbage's and Lady Footlocker, within the next 45 days.

Scott Moyers is business editor for the Southeast Missourian. Send your comments, business news, information or questions to Biz Buzz, 301 Broadway, Cape Girardeau, Mo., 63702-0699, e-mail to smoyers@semissourian.com or call 335-6611, ext. 137.