Boston Pizza drafts smaller stores for smaller markets

One of Canada’s biggest casual restaurant brands is warming up expansion plans for smaller cities and rural communities with the launch of a smaller-store prototype.

Boston Pizza International’s new smaller-scale store design, at about 4,100 square feet, is expected to make it “more affordable than ever to own a Boston Pizza franchise,” the company said in a statement Thursday.

The new store template is an opportunity “perfect for markets that were previously challenging due to market size or real estate availability,” said Ken Otto, the Toronto-based chain’s chief operating officer.

“One of our core pillars is a focus on franchisee profitability. This new prototype delivers against this by offering a reduced size model that is perfect for smaller communities.”

In terms of occupancy, the new space would allow for 140 seats with a 50-seat patio and would include both the “welcoming family restaurant and… lively sports bar” now seen in the chain’s larger outlets.

By comparison, the typical Boston Pizza building currently takes up 6,000-6,500 square feet, with capacity for 180-225 seats plus patio seating for 50-75.

“We believe a multi-channel approach to real estate and development is the best way to expand the Boston Pizza brand and extend our dominance in the casual dining category,” Otto said Thursday.

The company in recent months also made moves to expand its presence beyond the suburban landscape where it’s most often now seen, by developing stores in “prime urban locations” across the country and in “non-traditional” sites such as hotels, sports venues and strip malls.

“We are looking at building on the success of our urban prototype in Toronto in other major markets as well as growing through the opening of new stores in smaller, more rural communities that we haven’t entered yet,” Otto said.

Born out of an Edmonton restaurant, Boston Pizza and Spaghetti House, in 1964, the company — which then included 44 stores — was bought in 1983 by then-franchisee Jim Treliving and partner George Melville, who oversaw its expansions into Ontario, Quebec and Atlantic Canada.

The chain, which booked gross sales of $853 million in 2010, also began southward expansion in 2000 under the name Boston’s The Gourmet Pizza, now including about 50 U.S. outlets and three in Mexico.

Hispanic grocery stores find booming market in Valley.

Hispanic grocery stores — with their vast arrays of peppers and Mexican sweet breads — are steadily opening across the Valley, driven by an explosion in the population they cater to.

Garcia’s Market opened Thursday in Kerman. And just this spring, Sylmar-based Vallarta Supermarkets opened its fifth store in the central San Joaquin Valley, this one in Tulare.

“I’m sure there’s going to be more,” said Shane Anderson, a Commercial Retail Associates retail broker who helps landlords sign with retailers.

“Several of them we’re talking to have been up touring the Central Valley. It’s a matter of time before they start making deals.”

The interest from Hispanic grocers is far greater than that expressed by conventional grocery stores, he said. Traditional stores, which typically like to locate near new housing tracts, are waiting on the sidelines for building to bounce back, he said.

But Hispanic supermarket chains both big and small are realizing there is money to be made as the Hispanic population explodes.

Rapid growth

Hispanics are the majority in the Valley, according to census data released this spring, fueled by a big jump in the under-18 population.

The buying power of Hispanics nationwide is expected to grow by 50% between 2010 and 2015 to $1.5 trillion — a rate that eclipses all other racial and ethnic groups and overall spending growth, according to a yearly study by the Selig Center for Economic Growth at the University of Georgia.

Although many Valley Hispanics have lower incomes than their non-Hispanic counterparts, they spend a greater percentage of their income on food, according to Mintel, a national market research company.

That’s because Hispanics tend to have larger families, said Leylha Ahuile, a Mintel senior analyst.

Rebeca Garcia of Fresno, for example, shops for her family of six at El Super at Tulare and First streets in Fresno. Last week, she left with a cart piled high with food, including canned jalapeños, a large bag of apples and two trays holding 24 eggs each.

All that food will last one week, she said.

“It’s cheaper than other places,” Garcia said of El Super. “They have good specials.”

Anderson, the retail broker, says the Hispanic niche of customers still is underserved in the Valley.

Vallarta has opened stores in Fresno, Porterville and Visalia in recent years, and it opened its first Tulare store in April

. An executive has said that Vallarta plans to open more stores in the Valley. Chief Financial Officer John Marquis declined to comment last week on specific plans for the area.

“The company plans to continue to expand,” he said, noting that there is room for growth of Hispanic supermarkets in the Central Valley.

Kerman’s Garcia’s Market opened in the space Save Mart pulled out of last fall, citing the economy. It’s the Garcia family’s fourth store in the Valley. They also run stores in Modesto, nearby Riverbank and Mendota.

The family is planning to open more stores, possibly including one in Merced County, said Jesus Garcia, owner of the Kerman Garcia’s Market.

“The people in Kerman, they’re waiting for something,” he said, noting that the city has one other supermarket. “They want more options … to do their grocery shopping.”

Other Hispanic grocers, including El Super and Rancho San Miguel, also have established a presence in the Valley.

The stores sell many of the same products as traditional grocery stores, but some departments are vastly different.

Produce sections carry a much larger and varied selection of peppers. They also carry products that aren’t common in traditional supermarkets, including verdolagas, a Mexican parsley, or the Mexican green huazontle.

Meat counters are larger, carrying cuts of meat preferred in Mexico, and deli-style servings of queso fresco cheese.

And the larger supermarkets serve up fresh food like tacos and tamales, along with every flavor of “aguas frescas” drinks, and have large seating areas.

Ethel Rodriguez of Fresno shops at several stores, but buys Mexican sweet bread and canned enchilada sauces at Vallarta at Cedar and Dakota avenues in Fresno.

“They have all that type of stuff, more so than others,” she said.

The stores appeal to non-Hispanic customers, too, like Dianna Mangione of Fresno, who regularly shops the meat counter at El Super.

“It’s not necessarily because it’s Hispanic; it’s because it’s a better quality of meat,” she said.

A shifting marketplace

The Valley has always had a strong Hispanic population, and for years it’s been catered to by small mom-and-pop shops. But now, larger grocers are beginning to take over that role.

Walmart and other more traditional supermarkets also are trying to appeal to Hispanic customers, though on a smaller scale.

There have been some bumps along the way.

The Fiesta Foods Warehouse that opened at Kings Canyon Road and Willow Avenue is now empty and boarded up — but that had more to do with business decisions than a lack of customers.

Ontario-based Fiesta Foods wanted to own a store instead of rent, said Rick Amerine, a retail broker at Commercial West Associates. When the space at First and Tulare streets came up for sale, Fiesta bought it and opened a second store there.

But two Fiesta stores so close to each other was too many in a corridor saturated with grocery stores and a Walmart, Amerine said. The company closed the Kings Canyon store. El Super bought Fiesta and converted the Tulare Street store.

Still, many large companies based in Southern California and the Bay Area are expected to begin growing into the center of the state, Anderson said.

And at least one heavy hitter is in the early stages of finalizing new store locations, Amerine said. He declined to say who, but said the company is “a force to be reckoned with.”

Coinstar looks for the next big thing in automated retail.

Coinstar’s Redbox business began 2010 by renting out more movie DVDs and Blu-ray discs in the first three months than Blockbuster — a major milestone cast as David toppling Goliath.

Nine months later, Blockbuster had gone belly up, and Redbox was second only to Netflix as a source of inexpensive movie rentals, solidifying its place as a dominant player in the U.S. home-entertainment market.

At the end of 2010, Redbox operated 30,200 self-service machines dispensing movie DVDs for a dollar a day at supermarkets, drugstores, fast-food restaurants and other places shoppers regularly visit. Redbox took in nearly $1.2 billion last year, accounting for 80 percent of Coinstar’s total revenue.

Bellevue-based Coinstar began buying into Redbox in 2005, when it was a fledgling McDonald’s venture, and took full ownership in 2009.

Although Coinstar has since sold businesses unrelated to Redbox and its namesake coin-counting machines, it continues to look for the next big thing in automated retail.

Redbox, for example, will add video-game rentals costing $2 a day to more than 21,000 locations nationwide by July 1.

Also, Coinstar has injected an undisclosed amount of money into ecoATM, a new venture that seeks to provide a convenient way for people to get cash for their old electronic devices, such as cellphones and iPods.

Still, whether 2011 has a happy ending for Coinstar could depend on what Redbox does next.

Some on Wall Street have grown impatient with Redbox’s indeterminate plans to introduce a video-streaming service on top of physical disc rentals.

In February, Redbox President Mitch Lowe told analysts the company was getting closer to finding an online partner for an unlimited streaming offer to take on Netflix. But the company has said only that full details will be released this year.

Let the speculation begin about Walmart Market

Walmart is moving forward with what could be characterized as a roll out of its Neighborhood Market format nearly 13 years after the first unit opened in the fall of 1998. Just don’t call it a Neighborhood Market.

The company has rebranded the small format food and drug combo store as Walmart Market  and as Bill Simon, president and CEO of the company’s U.S. stores division made clear during an investor presentation yesterday, the financial returns are now comparable to those of the company’s supercenters. That has encouraged the company to move faster with expanding the based of 155 domestic Walmart Market stores.

“There are 180 that have been approved through our real estate committee,” Simon said during a presentation at the William Blair & Company Growth Stock Conference. “We expect to have about 300 of them by 2013. The number for next year is approaching 100 that we’ll be able to put in.”

Now the guessing game can begin about how many of the approximately 40,000-sq.-ft. stores the company might ultimately be able to open and the time frame in which the expansion could occur given Walmart’s resources, available real estate and an army of assistant store managers who have undergone the retail equivalent of Navy Seal training by working in Walmart’s supercenters.

Simon said the company was also encouraged to move fast because the smaller stores have a shorter development timeline than a supercenter, which means a significant number can be added more quickly.

The ramp up in expansion has been a long time coming. When the first units opened in the late 90’s the concept was viewed as a growth vehicle, and there was considerable conjecture around how quickly the concept could be expanded. However the operating model was never quite right and there were abundant supercenter projects in the pipeline. While Simon asserted that supercenters remain the company’s primary growth vehicle in the U.S. the tipping point would appear to be at hand where within a few years ground up new supercenters will become increasingly rare and small-store openings more commonplace.

Simon referenced providing more details on the Walmart Market expansion in October, which is when the company holds it annual investor conference and reveals it capital expenditures budget for the coming year along with details around square footage expansion and stores openings by format type. Simon broke with tradition a bit by revealing 2012 growth plans for the Walmart Market but these days investors are clamoring for information on how the company expects to growth given the two year slide in same-store sales. In addition to the significance of the expansion news, the timing of the disclosure is noteworthy as well. Just two weeks earlier Walmart held its annual shareholders’ meeting, which was followed by a two-hour meeting with analysts where divisional presidents and CEOs and Wal-Mart Stores president and CEO gave brief presentations and fielded questions.

Future Group to build wholesale markets

Agre Developers, a Future Group company, formerly known as Future Mall Management, has struck a deal with Bangalore-based developer the Sattva Group to build a wholesale trading market on the lines of Dubai’s Dragon Mart and China’s Yiwu wholesale market. This is the first of the eight businessto-business (B2B) markets that the company is planning to start across major cities in the course of the next few years. These trading hubs will stock general merchandise, IT peripherals, hardware products along with other commodities typically spread across a 5-10 acre space. The BSE listed-company will also be getting into the infra-logistics and retail infrastructure business. 

Kishore Biyani had merged his real-estate business with Kolkata-based developer Sumit Dabriwala into Agre Developers to strengthen the retail major’s foothold in the realty space. The retail to financial services group runs stores like Big Bazaar and Food Bazaar.
Sumit Dabriwala, MD, Agre Developers, told TOI, that the strategy for the company going forward will be to tie-up with strategic partners to facilitate the opening of these tradings hubs and also to build infra-logistics across the country. Agre Developers will work in tandem with Future Supply Chain, the logistics and supply chain vertical of the group, on the infra-logistics business.
“Even as the demand of logistics in the country expands, supply of good quality logistics infrastructure is extremely low. This is where we will work with Future Supply Chain and also with other logistics companies,” Dabriwala said.
The company will look to plough about Rs 500 crore of equity across the three formats and is evaluating the possibility of inviting strategic partners into each of these businesses. The total outlay on the three business verticals will be around Rs.3500 crore over the next five years, said Dabriwala.
“While the wholesale trading and the infra-logistics business will be in partnership with another entity, the retail infrastructure vertical of the company will be operated independently.
“On the retail infrastructure side, the mandate is to play a bigger role which will start right from spotting the location of the mall to designing the mall, determining the tenant mix, sub-leasing the mall and managing it over the life cycle of the transaction,” Dabriwala pointed out.

Meet Groupon’s Indian rival Snapdeal

Until January last year, Wharton graduate Kunal Bahl and his IIT batchmate Rohit Bansal could be spotted across restaurants and retail outlets in Delhi suburbs trying to sell discount coupons to both owners and their potential customers. 

At 25, Bahl had quit his cushy Microsoft job based in Seattle and even convinced his IIT Delhi alumni Bansal to take a leap of faith in 2007. “We used to wait for hours in the heat outside small restaurants, where we wouldn’t have eaten even if we had to pay,” says Bahl.

When a restaurant owner told the duo earlier last year that he had got five customers from their website Jasper Infotech, it became an inflection point for Bahl. He launched Snapdeal.com — now popularly called India’s answer to Groupon, the world’s biggest provider of daily online deals.

Since January this year, Snapdeal has been growing its revenues at over 100%, selling unused inventories of everything from sunglasses, wallets and even travel packages, totalling over 10,000 discounted deals everyday. “We sold about 2,200 Reebok Sunglasses, in a day, at an 80% discount deal.

About 400 packages to Kerala were sold in February. Our model is to go after unsold distress inventory,” says Bahl who along with Bansal had to shell out $3000 for buying the Snapdeal.in domain name — an investment that’s paying off well.

Along with Taggle, MyDala and Koovs.com, Indian e-commerce is now seeing a rise of young companies attempting to woo customers online with lucrative deals. The model is quite similar to how Groupon makes revenues (or losses at the last count). Snapdeal.com charges about 35% upfront for any deal.

The rest has to be paid directly to the merchant on delivery of service or good. The employees job is to get discount deals from mer-chants. They also handle customer calls and delivery of products. With 400 staff on the payroll, Bansal and Bahl want to get a share of India’s $500 billion retail market, of which nearly 18% is services business offered by sites like Snapdeal.

Globally, Groupon created waves earlier this year when it was valued at around $1.35 billion. Snapdeal too attracted attention of the legendarySilicon Valley investor Vinod Dham in February last year. Both Dham and Bazee.com co-founder Suvir Sujan invested nearly $12 million.

The website plans to close at over Rs 100 crore in revenues by December, within a year of its starting up. “It’s the two years we spent slogging at small shops in Delhi, trying to persuade them to buy our scheme is what is helping us. After all discount and group buying sites existed before we came in,” says Bahl, his hair uncluttered, as if not slept in days. Right now, Dealoftheday.com, Letsbuy.com and Groupon owned Sosasta.com, are all competitors.

But Snapdeal claims to have 70% share. “Our first priority was to make our brand felt across India,” says Bahl. Mumbai local trains are now painted with Snapdeal ads. In Bangalore, government buses which ferry IT workers are covered head to toe with Snapdeal banners. The multi-storeyed CyberCity towers in Gurgaon have large Snapdeal hoardings too. “The eight-lakh strong jungle of IT workers in Cybercity in Gurgaon is just the audience we need,” he says.

In the middle of the floor, just outside Bahl’s cabin is an LCD screen, which shows a seven-digit number moving faster than the clock. The company just crossed five million registrations this month. “Our target audience is between 18 and 35 years who loved to spend on the nice to have things like a good restaurant dinner, a soothing spa, or a pair of luxury sunglasses.

The distributors who are not able to sell directly sell at rock bottom prices through our medium,” he says. The discounts are heavy — up to 90% on the maximum retail price. Snapdeal charges upfront about 35% of the amount of the deal, for which the user has to pay online. “Even if a user is not able to avail the service or product due to any reason, at least he has not paid the whole amount,” says Bahl.

The company has now overtaken LivingSocial in last three months in terms of number of visitors, as per Alexa.com, to become the most visited group buying site just behind Groupon.com. “We are now getting offers for acquisition running into amounts so high, that we won’t have to work a single day in our lives,” says Bahl who together with Rohit and the management team owns 50% of Snapdeal.

Websites like MakeMytrip have partnered with Snapdeal to sell unsold inventory, for instance unsold seats on a chartered plane to Bhutan, which it can’t do on its own website. “I have already made it clear that even if I wasn’t owning the website, I would rather enjoy working for it as it’s so exciting,” says Bahl, just back from a trip to Darjeeling. Bought from Snapdeal, where else?

New £24m food court planned for Merry Hill Shopping centre.

Westfield’s new Eat Central area at the Merry Hill Shopping centre, has been in the planning stages for more than two years.

Nandos, Hey Potato, KFC and Nineteen Ten Mexican Kitchen have signed up to be part of the new development, which will comprise 16 food outlets and three restaurants with open plan kitchens and grills.

Neil Huntington, development director for Westfield, said: “We are delighted to announce the project and these signings. Interest in the scheme has been solid and we expect to announce more names very soon.

“The success of the dining offers at Westfield Derby and Westfield London show the potential to evolve the traditional ‘food court’ model. At Merry Hill we plan to attract a fascinating mix of contemporary and traditional operators, combining tastes from around the world to make sure there is something for everyone.”

The restaurants will face a new centre entrance and car park – which will be themed with street-side dining and landscaping.

%d bloggers like this: