A recent retail analysis conducted in Huxley showed the potential profitability of a future grocery store, but its success would rest on whether or not the community supports it.
Chuck Perkins, of Perkins Marketing Company in Northfield, Minn., presented the findings of the analysis to attending Huxley City Council members and members of the community Wednesday, April 17.
The analysis was conducted this past month after Brothers Market, owned by Darian, Jared and Jay DeVries, showed interest in possibly opening a grocery store in Huxley. The brothers, who own grocery stores in Cascade, Lisbon and Parkersburg, had requested the analysis be conducted before they would further consider opening a location in Huxley.
The analysis focused on the trade area outlined by the county line on the west, 265th Avenue on the north, the railroad on the east and 150th Avenue on the south. It includes the approximately 7,800 people who live in Cambridge, Huxley, Kelley, Sheldahl and Slater.
Perkins said he determined four areas where a grocery store could be located in Huxley – in the open lot near the intersection of Highway 69 and National Drive, on the southeast corner of the Highway 69 and Centennial Drive intersection, along First Street on the south side of the Prairie Ridge housing development and on the east side of Highway 69 near the Campus Drive intersection. Each of those locations would be large enough for either a 12,000-, 16,000- or 20,000-square foot grocery store.
The National Drive and Highway 69 location was the best of the options, Perkins said, because of its location along the main route through town, and expected profitability.
"Even if it produced higher sales than the other sites, it still has its flaws," Perkins said.
Those flaws include the lack of a stoplight at the intersection and no road currently feeds into or through the property to allow access from the residential area to the south. Perkins said the store would not want to be located near the curve in the highway because of the difficulties the curve would cause for traffic trying to enter and exit the property.
The next best location would be the one at the intersection of Highway 69 and Centennial Drive. While this area is not as heavily populated as the National Drive location and was not projected to make as high a profit, Perkins said "it presents itself well." A stoplight is already at the intersection and it is a visible location.
The Campus Drive and Prairie Ridge locations were expected to make the least amount of profit, with a noticeable profit difference between the Prairie Ridge location and the other three. This is primarily due to the lack of visibility of the location from Highway 69.
"There are a lot of pluses for being on the south edge of town, but it’s not the best location," Perkins said of the Prairie Ridge option.
In order for a future grocery store to make money, it would need to make $6-$7 per square foot. Perkins said each of the locations, based on a 12,000-square foot store, were projected to make $5.14-$5.80 per square foot. As the projected size of the store increased, the amount made per square foot decreased.
A factor the trade area has working against it is the proximity of larger grocery stores in Ames and Ankeny. With a $328,000 potential spendature per week, on average, from residents in the trade area, an average of more than $62,000 per week in grocery retail sales is lost from the trade area to outside stores. Perkins said in order to attract consumers from the trade area, any future grocery store that comes to the area would need to be presentable, have competitive prices on items customers need and offer a shopping experience that makes customers want to come back.
"It has an opportunity to exist, but in a community where people are used to driving to buy food, you’ve really got to have products and employees who are on top of it for people not to get in their cars and drive to the north or south (to get groceries)," Perkins said.
Steve Quick of Quick’s Hardware Hank in Huxley said a future Huxley grocery store owner would "have to be for everyone." They would also need to be committed to making the store a success, despite a likely lack of profit initially.
"It will take a few years and you may lose money," Quick said.
Another factor that would contribute to a future grocery store’s success in the area would be having some sort of incentive for customers to shop there. Perkins said if a grocery store were to include their own gas station and offer fuel reductions, such as the partnership between HyVee and Casey’s General Store for the HyVee Fuel Saver program, more people may choose to shop at the grocery store because they can save on gas.
As for the impact a future grocery store in Huxley may have on the existing Town and Country grocery store in Slater, Perkins said it would not be enough to drive the existing store out of business. Based on the analysis, Town and Country would only lose a couple thousand.
While no decision has been made, nor an offer presented to build a grocery store in town, Perkins said the numbers in the analysis should be representative of any future grocery store’s success. If and when a grocery store comes to town, community members will need to support it, just as they do current businesses in the area.
"The community is doing a nice job of supporting the businesses you have now, but when a supermarket enters the community, the community needs to support it," Perkins said.
City Administrator John Haldeman said Council members and businesses who contributed to the analysis are looking over the analysis in detail. A community group will be put together to decide where to go from here.
"If any interest becomes more than just interest, Council will discuss it at a future Council meeting," Haldeman said.