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New Stores Stoke Competition in Richmond

Newly opened outposts of Whole Foods and Trader Joe's herald the beginning of a new era in food shopping in this growing metropolitan area and signal another challenge for Ukrop's Super Markets, its longtime local leader. Retailers and other observers contacted by SN say the changes reflect both Richmond's growth population in the nine-county Richmond Metropolitan Statistical Area has

RICHMOND, Va. — Newly opened outposts of Whole Foods and Trader Joe's herald the beginning of a new era in food shopping in this growing metropolitan area — and signal another challenge for Ukrop's Super Markets, its longtime local leader.

Retailers and other observers contacted by SN say the changes reflect both Richmond's growth — population in the nine-county Richmond Metropolitan Statistical Area has grown by about 9% this decade and now totals 1.2 million, U.S. Census figures show — and also, a changing personality. Once a city where retail leaned toward a rural, basic feel, Virginia's capital today is taking on more characteristics — good and bad — of its neighbors farther north along the I-95 corridor in Washington, and its store offerings reflect that.

“Richmond is becoming more sophisticated,” Tom Leonard, who operates Tom Leonard's Farmer's Market in Richmond, told SN.

“The outskirts of Washington, D.C., now extend as far south as Fredericksburg, which is only 40 miles or so from where Richmond has grown to,” another source said. “Ten or 15 years down the road, it's easy to see being absorbed into the whole Baltimore-Washington area.”

Whole Foods Market, the Austin, Texas-based natural food powerhouse, opened its first Richmond unit early last month in Short Pump, an upscale-leaning new retail corridor west of the city where many of the changes affecting Richmond's food retail scene are now on display. Trader Joe's, the Monrovia, Calif.-based specialty store, followed Whole Foods two weeks later, making its Richmond debut in a nearby shopping center. Those stores — in addition to surrounding Tom Leonard's — count a Kroger, a Ukrop's and a Wal-Mart Supercenter as neighbors.

Real estate sources in the area say Food Lion — which already has a strong presence with its conventional stores throughout Richmond — is now building the first of its upscale Bloom models in an area south of the city, while Wegmans and Harris Teeter have scouted the region for sites but haven't made commitments yet.

Ukrop's, family-owned with 27 area stores and more than 70 years of experience serving Richmond, has a well-earned ability to defend its home turf. A decade ago it was fighting off an invasion from Fresh Fields, a natural/organic retailer later to be acquired by Whole Foods, and from Hannaford Bros., which had crept down from Maine before an acquisition forced it to divest its Southeast holdings and transfer its Richmond stores to Kroger.

Further back, Ukrop's chased off Grand Union, Safeway and Giant, among others, and many aren't underestimating its ability to respond to this latest threat.

“Ukrop's is like the Washington Redskins. The tougher the competition, the better they seem to play,” Burt P. Flickinger III, managing director of Strategic Resource Group, New York, told SN. “I think Whole Foods and Trader Joe's are going to be successful in Richmond, but they're also going to make Ukrop's better.”

Ukrop's officials were not available to comment for this article. Recent reports indicate the retailer is at work on a renovation to the Short Pump location affected most by Whole Foods' arrival. An article posted this month on a local website,, quoted Kevin Hade, Ukrop's vice president of sales and operations, as saying the renovation to the store — which when built in 1996 helped launch the area as a retail destination — would add space to its offerings of prepared foods and cheeses and organic food. “It's going to be our best store yet,” Hade said.

“Ukrop's has been preparing for Whole Foods for a long time, and so the impact might not be as great as people might think,” said one local source, who asked not to be identified.

Others, however, see the changing market as a challenge for Ukrop's. Kroger, in particular, has improved its standing and market share since acquiring the former Hannaford stores in 2000, sources said. In addition to the offering and service improvements Kroger has implemented nationwide, the retailer in Richmond is afforded the opportunity to sell without its largest rival on Sundays, when Ukrop's upholds a long tradition of not operating that day. Ukrop's also does not offer beer or wine, while its competitors do.

“Kroger has done very well in a relatively short period of time, gaining substantial market share,” said one local source, speaking on the condition of anonymity. “They've really beefed up quality and service and updated their stores. Ukrop's does prepared foods really well, and are clearly the leaders when it comes to innovation. But I think the shine is off a little, especially at the top.”

Rising expectations of stores focused on the middle market have helped Kroger, the source explained, whereas Ukrop's, which traditionally has marketed to middle and upper-end shoppers, may struggle to provide the same level of luxury that a Whole Foods can offer.

Food Lion for its part is also defending its ground. The Salisbury, N.C.-based unit of Delhaize Group this month completed renovations at 28 Richmond-area stores, with several locations adding Nature's Place natural and organic selections, expanded international offerings and olive carts, and all stores receiving new decor and lighting and upgraded offerings in meat, deli and produce, the company said.

Leonard, whose 14,000-square-foot farmer's market store emphasizes a unique assortment of fresh items and low prices, said his sales have improved since the newcomers arrived. This he owes in part to the extra traffic generated by the new competitors, but also, he said, to an appreciation for service and lower prices at his place.

“What I believe is that the farmer's shadow fertilizes the land — that by being in the store and focusing on making it better, your sales go up and you have happy customers,” said Leonard, whose father Stew Leonard founded the eponymous Connecticut-based chain that Tom Leonard's store emulates on a smaller scale in Richmond. “By focusing on the basics, anyone can compete well against chain stores. Their goal is profit for their stockholders; our goal is for the customer to come back.”

The arrival of Whole Foods to the Richmond area has also been a mixed blessing for Ellwood Thompson's Local Market, which has been Richmond's premier name in organic and natural foods since the 1980s.

“I think there's been a little impact to the market in general, but a good impact. What's really happened is that it's risen the awareness of eating natural and organic in the Richmond area in general. And that's good for us,” Ryan Youngman, chief executive officer of Ellwood Thompson's, told SN.

Ellwood Thompson's, Youngman said, combines the feel of co-op with an emphasis on prepared foods similar to that of a specialty retailer, in a 15,000-square-foot space that is easy to shop. The store features fresh products from within a 100-mile range, foods that are minimally processed and free of artificial flavors, colors, preservatives and sweeteners.

In addition to a 5,000-square-foot expansion under way at its Richmond flagship, Ellwood Thompson's this month announced it would expand to the Washington, D.C., market next year.

“The bar for competition really is higher than it used to be, and that's in large part due to stores like Whole Foods and independents like Ellwood Thompson's,” said Youngman, who prior to running Ellwood Thompson's was a director of Whole Foods' Pacific Northwest division. “I'm from the Northwest, where natural food is more of a way of life. Richmond today is a little behind that, but anybody who is here now is at the beginning.”

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