Grocery Sales Exceed Expectations at Downtown Ralphs

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It’s official: the long-awaited downtown Ralphs supermarket is a hit.

When the store opened July 20 it was mobbed by downtown residents and workers who flocked to the store. And while the rush of the first week or so has slowed some, business is still booming at the supermarket, which is on the ground floor of the Market Lofts at Ninth and Flower streets.


Ralphs Grocery Co. does not make exact sales data available, but suggested that the South Park store is doing about $1 million in sales each week an impressive figure in the supermarket business.


Top stores in the chain are at the $1 million per week level and the downtown location “is among our top volume stores” in the 264-market chain, said Terry O’Neil, spokesman for Ralphs Grocery Co., a division of Cincinnati-based Kroger Co.


Prior to the gala opening, Ralphs Grocery President Dave Hirz had predicted that weekly sales would be in the $500,000 range.


“We have to be cautious and typically we are conservative with our estimates, so we were conservative with this store,” said O’Neil, who added it takes about two months for a store to operate at normal levels. “What we didn’t expect was that not only are we drawing from people who live and work downtown but we are drawing people from surrounding communities. Originally it was the curiosity factor but not two months later.”


Already, locals say that the neighborhood immediately surrounding the market has been enlivened. And the success has led downtown boosters to trumpet the area’s continued renaissance and call for more grocery stores.


Of course, it’s unclear how the Ralphs would fare if its virtual monopoly ended and other stores opened. In fact, there are additional stores in the works, including one at the Related Cos.’ massive Grand Avenue project and another at Moinian Group’s residential project at the corner of Figueroa and 11th streets. Ralphs has already expressed interest in the Grand Avenue project. However, those stores would not open for at least a couple of years.


In the meantime, Hal Bastian, senior vice president and director of economic development for the Downtown Center Business Improvement District, said that when he talks to potential downtown investors, the Ralphs store is a strong selling point.


“Investment bankers, retailers and restaurateurs are all very interested in how the Ralphs is doing,” he said.


The 50,000-square-foot, high-end Ralphs Fresh Fare supermarket is in a condo building that includes 267 condominiums developed by CIM Group Inc. and Lee Homes Inc.


The store has one of the chain’s most expansive prepared food sections, including a sushi bar, salad bar, and weekly wine tastings at a wine bar, among other features. According to a source familiar with the store, the prepared food section is doing about $100,000 a week in sales.


Ralphs Grocery Co. does not disclose such data but O’Neil said that “it’s up there” with the top stores. “When you go there in the lunch hour it is literally wall-to-wall with people,” said O’Neil, adding that the store’s 35-person staff in the service deli is the chain’s largest.


Danielle Bower, a project manager for CB Richard Ellis Group Inc. who lives downtown, said she goes to the Ralphs weekly and though it’s crowded, it’s not unpleasant.


“I absolutely love it. It is much more upscale than any other supermarket in the area. There is a Ralphs by USC and it is nowhere near the caliber of the Ralphs downtown,” she said.


The store also has a catering department, a first for any Ralphs supermarket. With such strong prepared food business, the store is considering adding seating for customers who drop by for a meal.


O’Neil said that the company is also considering adding delivery service for residents who live downtown. “We see a lot of growth for this store in the future, which is why we are looking for sites for our second, third, fourth store and more,” he said. “We believe downtown can support more than one market.”


The success of prepared food has had another consequence: shoppers are venturing out into the neighborhood to eat their meals. Carol Schatz, president of the Central City Association, said that the adjacent Grand Hope Park at the Fashion Institute of Design and Merchandising campus is now filled with people who eat their lunch at the park.


“It doesn’t make any difference when you go, it is always busy and it has completely enlivened Ninth Street,” she said. “The demand from the lunch crowd has been completely overwhelming and no matter how many chairs and tables they bring into the store, it isn’t enough. People are going over to the (Fashion Institute) park, which was underutilized, and people are having lunch under the benches and the trees. Who would have thunk it?”


John Given, the principal at CIM who handled the project, said the success of the store validates downtown in the midst of a rough real estate market.


“It provides timely confirmation that whatever cyclical conditions or macroeconomic conditions are occurring, the downtown is an established neighborhood and investment district,” Given said. “It will continue to be an important investment district.”

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