As residential and commercial development has grown in the South Mountain area, so have many residents’ desires for higher-end retailers, including grocers such as Whole Foods, Sprouts, AJ’s and Trader Joe’s. And although a slowing real estate market makes their arrival less predictable, steps are still being taken to bring these specialty stores here.
“I personally have gone after all the specialty stores,” said Michael Moreines, a local developer with Terrazona. “The bottom line is they’re basing (decisions) on demographics, rooftops and population. They will not vary from it.”
Unfortunately, current statistics for the South Mountain and Laveen Villages aren’t matching the higher-end retailers’ demands, stressed Moreines, who is working on developments at 35th and Southern avenues, 51st Avenue and Baseline Road, and 51st Avenue and Dobbins Road.
“That’s one of the reasons why Safeway (at 51st Avenue and Baseline Road) is delayed,” he added.
Uncertainty over the South Mountain Freeway is also playing a factor in new retailers coming to the area.
“We’ve had your area under review,” said Doug Sanders, senior vice president and chief operating officer of Arizona-based Sprouts Farmers Market. “That’s an area we’ve looked at numerous times, but the population density hasn’t gotten there yet and road connectivity has become a challenge.”
Another factor, Sanders stressed, is the presence of conventional grocery stores, which are usually established before Sprouts commits to an area.
“It’s not that we don’t want to come there – absolutely not,” he added. “It just a matter of when the time is right.”
Shawn Glasser, a spokesperson for Whole Foods, was hesitant to provide specifics on how the world’s largest retailer of natural and organic foods selects locations. But he said they are always looking at new sites, although he couldn’t confirm if any were in the South Mountain area.
“Store site decisions are based on a combination of factors that include the availability and cost of real estate, population density, education, income, and interest in natural and organic foods,” he said. “No one factor is most important, but the right combination is important.”
New Whole Foods stores are announced four times annually on the company’s quarterly earnings calls. The closest location under construction is at University and Ash avenues in Tempe.
In addition to consumer demographics, two additional factors in securing a specialty retailer outside of the grocery industry – such as Borders – are strong complementary tenants and visibility, said Kolleen O'Meara, public relations specialist for the international bookseller.
However, similar to Whole Foods, Borders doesn’t provide exact details on site selection.
Attempts to get comments from representatives at AJ’s and Trader Joe’s were unsuccessful.
According to Ruben Gallego, chief of staff for District 7 Councilman Michael Nowakowski, attracting specialty shops to the area is especially challenging because some retailers and developers are relying on 2000 census data. Back then, the area’s average household income was about $45,000. Today, that number has reached roughly $68,000.
Other problems he’s seen include retailers forgetting to include county islands when gathering information, while also miscalculating how far area residents are willing to drive to buy goods and services.
“A lot of developers are used to developing in places like Scottsdale or Kierland Commons – areas that are a lot denser – whereas were not as dense, but we’re willing drive further,” Gallego added.
Even with the challenges, Gallego sees strong potential for attracting specialty retailers, especially as area road construction is completed, redevelopment of the Rio Salado expands, the South Mountain Freeway is finalized, and the new South Mountain Community College campus is built in Laveen.
“The only risk is we just need to find a good balance to everything,” he said.
