St. Louis Board of Aldermen: Week 17 of 2018-2019 Session

The St. Louis Board of Aldermen will meet at 10am today, their 17th meeting of the 2018-2019 session.

Today’s agenda includes zero new bills, however, there are two bills on the ‘Perfection Consent Calendar’:

The meeting begins at 10am, past meetings and a live broadcast can be watched online here. See list of all board bills for the 2017-2018 session — the new bills listed above may not be online right away. You can learn more about how a bill becomes law here (boring text, no cartoon)

— Steve Patterson

Readers Split On Schnucks’ Purchase Of 19 Shop ‘n Save Locations

Shop ‘n Save’s parent company, Minneapolis-based SuperValu, is selling/closing all locations — St. Louis & Springfield IL. This has been known for months, from July:

Supervalu is exiting the food retail business via a deal to sell itself to United Natural Foods Inc. for $2.9 billion.

The news comes on the same day that Supervalu announced its Q1 2019 earnings.

UNFI said it will sell off Supervalu’s retail business, which comprises 3,000 stores. The company has spent more than two years executing a transformation plan aimed at returning to its wholesale roots. (Retail Leader)

From February 2016:

United Natural Foods, a primary distributor for Whole Foods, distributes natural, organic and specialty food to a variety of grocery and natural product stores. It works with brands including Clif Bar, Annie’s, Bob’s Red Mill and Horizon Organic. The Providence, R.I. -based company also reported preliminary second quarter results Monday that fell below analyst expectations, as competition in the organic and natural food space continues to grow. (USA Today)

Shop ‘n Save has been headquartered in Kirkwood for years, but has been owned by out of state interests for more than a quarter century:

Shop ’n Save was founded in 1979 as a grocery store in Belleville, Illinois, near St. Louis, Missouri. The chain now includes 33 stores in the St. Louis metropolitan area, and 3 additional stores in Springfield, Illinois.

In 1983, the retail chain was acquired by Wetterau, Inc. Nine years later, in 1992, Wetterau was acquired by SuperValu, and Shop ’n Save has been a subsidiary of SuperValu since. (Wikipedia)

Wetterau was based in the St. Louis suburb of Hazelwood. The Wetterau family has a long history in St. Louis:

George Wetterau moved to St. Louis in 1867 at the age of 17 to join his brother in a small retail grocery business. In 1868, he began working for J. F. Lauman & company, a local wholesale grocery company and he bought the company a year later, with a partner, Frank Goebel. They formed Goebel and Wetterau Grocery Company with their wholesale office located at 712 South Second Street. In 1899, the two dissolved their partnership and George formed G. H. Wetterau & Sons Grocer Company. In 1923, Otto Wetterau, one of his sons, took over the company. He changed the name to Wetterau Grocer Company and took advantage of new forms of transportation and warehouse equipment to expand rapidly. He was one of the first to provide wholesale warehousing of produce. During the Depression, when many grocery stores went out of business, Wetterau became affiliated with the Independent Grocer’s Alliance (IGA). In 1953, Theodore C. Wetterau succeeded his brother Otto as president and added other independent supermarket chains to the organization. The company then became involved in non-food items, added a bakery division, printing division, trucking division and developed its own finance, insurance and construction companies. Wetterau was supplying food to stores in 29 states, when in 1993, Minneapolis, Minnesota-based SUPERVALU, Inc. acquired it to become the nation´s largest food wholesaler. At this time Ted Wetterau, Theodore’s son was president. Before the deal, Supervalu was the second-largest distributor and Wetterau ranked third. Ted Wetterau and his sons, Mark and Conrad then started Wetterau Associates, a holding company in Brentwood to buy and manage food-related companies. (St. Louis)

As a result of the consolidation in both the wholesale & retail grocery markets, Shop ‘n Save locations here and elsewhere will be sold or closed. Unless some other grocery chain enters the St. Louis market, others will pick up market share lost when Shop ‘n Save closes. The biggest gain will be St. Louis-based Schnucks Markets — they’re buying 19 suburban Shop ‘n Save locations. This Summer Schnucks bought the Maplewood Shop ‘n Save on Manchester, quickly reopening it as a Schnucks.

Here are other grocery stores with at least a few locations:

• Save-A-Lot, once also owned by Wetterau/Supervalu is now owned by Toronto-based Onex Corporation — a private equity firm.
• Lucky’s Markets, still pretty new to the St. Louis market, is based in Boulder Colorado. A large investor is Cincinnati-based Kroeger.
• Whole Foods is owned by Amazon.
• Our old Food 4 Less locations became Ruler Foods locations a few years ago, Ruler is owned by Kroeger.
• ALDI is a German company. The business was split into two separate groups in 1960, that later became Aldi Nord, headquartered in Essen, and Aldi Süd, headquartered in Mülheim. The latter is the group that operates ALDI stores in the U.S.
• Trader Joe’s is owned by a private family trust associated with Aldi Nord (not the Aldi that operates ALDI in the U.S.).
• Fields Foods has one location right now, but will soon open others in Dogtown and Downtown West.
• Privately-owned local grocer Straub’s Markets has 4 locations.  Straub’s had a short-lived 5th location in suburban Ellisville, but in closed in October 2009.
• Dierbergs Markets, also locally/privately owned, has 25 stores in Missouri & Illinois.

Readers were split on the recent non-scientific Sunday Poll:

Q: Agree or disagree: Adding 19 Shop ‘n Save locations will make Schnucks too dominant in the St. Louis regional grocery market.

• Strongly agree 4 [11.76%]
• Agree 5 [14.71%]
• Somewhat agree 5 [14.71%]
• Neither agree or disagree 4 [11.76%]
• Somewhat disagree 3 [8.82%]
• Disagree 8 [23.53%]
• Strongly disagree 5 [14.71%]
• Unsure/No Answer 0 [0%]

The agree votes total 41.18% with the disagree side totaling 47.06%.  I voted for “slightly disagree” because while I’m not big fan of Schnucks (their development arm, DESCO, is awful about ADA accessibility) but I know that being the biggest grocery store in the region will keep outside chains in a subordinate role. My hometown of Oklahoma City is now dominated by Walmart’s Neighborhood Market chain of stand-alone grocery stores. Local chains have been reduced to rubble.

Having strong locally-owned grocery store chains, even flawed ones, is better than being at the mercy of non-local corporate interests. Just hoping the Schnucks family doesn’t decide to cash out at some point.

— Steve Patterson

Alley Retail Can Work…In The Right Conditions

Alleys are one thing that attracted me to St. Louis in 1990, we didn’t have them in the 1960s suburban subdivision where I grew up in Oklahoma City. Interestingly, my grandparents each had alleys behind their homes in the small Western Oklahoma towns of Weatherford & Clinton. I spent a lot of time in the alleys behind their houses. Everywhere I’ve lived in St. Louis has had an alley, though for the last decade the alley has technically been St. Charles Street.

In April 2012 I posted about the streets that are really alleys parallel to Washington Ave.; St. Charles Street to the South & Lucas Ave to the North.  A year later New Brewery Improves Alley-Like Lucas Ave.

A recent “Where am I?” photo on Facebook raised interesting issues about alleys, and led me to ban someone from commenting on the page. Let me explain.

I posted the photo to the right on Facebook (blog’s cover image) with the caption “Where am I?” There were right & wrong guesses as to the location — it’s off of Locust St. between 10th-11th. One of the comments was “A sketchy alley about to get mugged by a homeless guy with a shank.  Also next to the Urban Shark.” Yes, Urban Shark is attached to the Bike Station on the left. No, not at any risk of getting mugged, but many think that way about alleys.

One person commented we need to turn alleys into pedestrian-focused retail like other cities have done, citing San Francisco & New Orleans. I recall experiencing one in Vancouver years ago — great space. However, I replied that retailing has struggled downtown even on well-populated streets like Washington Ave. Later I asked him to name just one alley downtown that would make a good candidate for retail. He, we’ll call him GB, said I was bashing St. Louis and he’s seen it work well in other cities. I’ll post more on our interaction in the future, right now I want to stick to GB’s assertion we should enliven our alleys.

Our alleys, like in many cities, were planned as ways to keep unsightly business like trash disposal out of view from primary streets. Also, most of downtown’s alleys have been privatized. Certainly those who own to the rights to formerly public alleys could try to market an alley as a pedestrian-friendly retail & restaurant hub, though ownership is often split down the middle between property owners on each side.

Yes, this has worked well in other cities. So why not downtown St. Louis? First, this has been used in areas lacking vacant street-facing retail spaces.  When retail vacancy is near zero rents go up. By expanding into alleys building owners can make retail spaces in unused/unleased portions of buildings. The rents received isn’t what they get out front but it helps the bottom line. Retailers get spaces that are more affordable in their business model.

If we look at the immediate area around the alley I posted we can see lots of available storefront space. Lots.

The South side of Washington Ave between 10th & 11th recent became fully occupied, but the North side has lots of vacancies.

I’ve tried to think of an alley in Downtown or Downtown West that might be a good candidate. Laclede’s Landing — can’t think of one, North of the Arch/Ead’s Bridge, has done ok with an alley or two to gain access to buildings. The best local example I can think of is the Maryland Plaza alley in the Central West End.

This example was never a public service alley, but it does show how a small sliver of property behind a building can become an asset rather than a liability. Former service alleys can be given this same treatment, the results are often amazing.

Still doesn’t make it a good idea for downtown St. Louis. It might, if you can think of the right location.

— Steve Patterson

Sunday Poll: Will Schnucks Be Too Dominant After Buying 19 Shop ‘n Save Locations?

Our local grocery scene continues to change, from last week:

Shop ‘n Save is checking out of the grocery-store business in the St. Louis region.

Schnucks Markets is purchasing 19 area Shop ‘n Save groceries owned by parent company SuperValu and will rebrand them as Schnucks stores. The remaining 17 Shop ‘n Save locations will close if SuperValu is unable to find a buyer by the end of the year.

The acquisition will boost the number of Schnucks grocery stores by 20 percent. Fifteen of the stores include pharmacies, which will also be purchased and run by Schnucks. (St. Louis Public Radio)

I was here in 1995 when Schnucks bought National Supermarkets from Canadian-based Loblaws, earlier grocery stores were before I arrived:

A previous merger in 1970 had seen Schnucks acquire the Bettendorf-Rapp chain of grocery stores—temporarily forming the Schnucks-Bettendorf’s chain (a joke was that an initially proposed name for the merged company was “Schnuckendorfs”) until the latter half of the combined name was dropped a couple of years later—just as Bettendorf’s had swallowed up the Rapp chain of stores to form Bettendorf-Rapp’s in the 1960s. Schnucks underwent a major expansion in 1995 when it purchased from Loblaws the National Supermarkets chain, also based in St. Louis.

Schnucks’ growth in the St. Louis area was bolstered by the local abandonment of two major supermarket chains: A&P in the 1970s, and Kroger in 1986. (Wikipedia)

This week’s poll is about Schnucks buying 19 Shop ‘n Save stores:

This poll will close at 8pm tonight.

— Steve Patterson

St. Louis Board of Aldermen: New Board Bills Week 16 of 2018-2019 Session

The St. Louis Board of Aldermen will meet at 10am today, their 16th meeting of the 2018-2019 session.

Today’s agenda includes four(4) new bills:

• B.B.#116 – Navarro/Spencer/Green/Rice – An ordinance defining the term“honored guest” as the term is used in City of St. Louis Board of Aldermen Rules, as an individual, or their representative, who is being honored by the Board of Aldermen through a Resolutionon that day’s meeting agenda, and such honoree’s immediatefamily members and friends, and immediate family members of the members of Board of Aldermen.
• B.B.#117 – Arnowitz – An Ordinance authorizing and directing the Director of the Department of Human Services, by and through the St. Louis Area Agency on Aging and, to accept funding from the Missouri Association of Area Agencies on Aging (in the amount of $120,000 over the next Five fiscal years. The amount for the current fiscal year is $30,000.) and to expend those funds for the 2018 Anthem Commercial Care Transition Project as set forth in the PCHP, LLC, Statement of Work to the Grant Award Agreement; and containing an Emergency Clause.
• B.B.#118 – Spencer – An ordinance approving a Redevelopment Plan for 3520-3522 Arkansas.
• Res.#119 – Kennedy – An ordinance authorizing and directing the Director of Public Safety, on behalf of the Mayor and the City, to enter into and execute an Intergovernmental Agreement with the United States Marshal Service for housing and related services for United States Marshal detainees housed within the Division of Corrections, providing for appropriation of these funds paid by the United States Marshals Service in accordance with the Intergovernmental Agreement, authorizing the expenditure of such appropriated funds by entering into contracts or otherwise upon approval of the Board of Estimate and Apportionment, and containing an emergency clause.

The meeting begins at 10am, past meetings and a live broadcast can be watched online here. See list of all board bills for the 2017-2018 session — the new bills listed above may not be online right away.

— Steve Patterson