As downtown inches forward in its quest to attract the critical mass of residents needed to spark a renaissance there, a crucial ingredient is still missing a supermarket.
Several industry observers say the primary reason downtown lacks big grocery outlets is that its population, at about 5,000, is far short of what is needed to attract a major chain.
"A supermarket needs 10,000 people residing within their trade area to break even," said Mark Tarczynski, an urban retail specialist with CB Richard Ellis, who also happens to live downtown.
Round up all the residential projects either in the works or on the drawing board and the magic number of 10,000 residents may be obtainable in the next few years, Tarczynski believes.
Meanwhile, Rod Diamond, a spokesman for United Food and Commercial Workers Union (UFCW) Local 770, disagrees with the notion that downtown's customer base is too small for a supermarket to operate profitably. "The demographics are huge," he insists, "and we urge the companies to look at sites available there."
Diamond argues that consolidation in the grocery industry down to three major chains (Ralphs/Food 4 Less, Albertsons, and Vons) is part of the problem. "You have nothing serving the Bunker Hill area and no major chains in Chinatown or South Park," he points out.
But that may be about to change.
"The image of a first-run supermarket is an important element to the revitalization of downtown and we're talking with a number of them now to achieve that," said Rocky Delgadillo, deputy L.A. city mayor.
Jerry Snyder, president of J.H. Snyder Co., a major developer of Ralphs grocery stores, agreed. "We know there's a need because the markets have told us they would love to be downtown," he said.
Well, sort of.
Terrance O'Neil, a spokesman for Ralphs, said the company is looking for central city locations, but has no immediate plans for construction. Ralphs, he said, needs 35,000 to 45,000 square feet with adjacent parking space to open a store. "We've looked at alternatives, such as the first floors of high-rise buildings, but nothing has come to fruition."
This approach is part of the problem, says UFCW's Diamond. "Awhile back we met with the owners of Ralphs and Mayor Riordan to try and get them to go back in with smaller stores at a higher concentration. But they're used to a certain format, a box, and they don't know how to deviate for the different demographics."
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