With Trader Joe's joining the fray, Mt. Pleasant remains a potent draw for grocers
When grocery chain Trader Joe's opens a store in Mount Pleasant this summer, the town will have 18 full-size supermarkets, many of them within sight of a rival.
That's roughly one supermarket for every 4,400 residents, and that's not counting all the places one can buy groceries that aren't quite full-service supermarkets, from drug stores and convenience stores to the grocery aisles at Target and specialty shops such as Boone Hall Farms Market.
While less affluent areas such as North Charleston struggle to attract grocery stores, East Cooper has seen a flood of them. As a result, residents are enjoying wide selection, nearby locations and some of the region's most aggressive grocery price competition.
"I think it's great," said Mount Pleasant resident Barbara Crosher, while shopping at a Harris Teeter store that opened last year, two miles closer to her home than the location she used to patronize.
There are roughly 79,000 people in the town and the unincorporated communities that weave in and out of its boundaries. As a population center, the town is fourth in the state, behind Columbia, Charleston, and North Charleston.
"We've been there since 1993, and we've seen a lot of growth in the area," said Brenda Reid, community relations manager for Publix Super Markets, which operates three stores in the town. "There's plenty of land in Mount Pleasant, for shopping centers and parking lots, and it's also attractive because it's an affluent community, with lots of households with children."
U.S. Census Bureau data shows Mount Pleasant has a higher percentage of residents under 18 than most communities in Charleston County, with the exception of North Charleston.
"We want to be in markets where there are households with families," Reid said. "You look at how many people are under the roofs."
Affluence factor
But when it comes to making money selling groceries, affluent customers is the key.
North Charleston and Mount Pleasant, for example, have similar household sizes and similar percentages of children, but the median household income in Mount Pleasant is roughly double that of North Charleston, and tends to run 60 percent higher than the state.
That means a grocery shopper in Mount Pleasant is more likely to buy the higher-margin items sold on the perimeter of the store: meat and dairy products, fruits and vegetables, prepared foods and deli items.
"As you might expect, a chef-prepared dinner from the deli is going to have a higher margin than a can of soup," said Christopher Ibsen, spokesman and director of marketing for Charleston-based Piggly Wiggly Carolina, which has two Mount Pleasant stores.
The grocery business is one with generally low margins, so areas that support higher-margin purchases are particularly attractive. According to the Food Marketing Institute, grocery chains made a profit of less than 1 percent on their sales in 2010, down from a 25-year high of 1.9 percent profit in 2007 just before the recession hit.
"Everybody's selling a box of corn flakes, so there's a real emphasis on delivering an experience," Ibsen said.
To chase higher-margin sales, grocery stores have been getting larger, and expanding their ready-to-eat offerings. The Harris Teeter that opened last year at Six Mile Marketplace, one of four Harris Teeters now in the town, is a 53,000-square-feet store with a full pharmacy and a Starbucks inside.
It's now common for a grocery store to offer fresh sushi, artisan cheeses, fine wines, ready-to-eat meals, locally grown produce, organic items and a premium coffee kiosk.
"The more affluent customers can be swayed, because they have more discretionary income," said Lorrie Griffith, editor of grocery trade publication The Shelby Report.
"You have more of a chance to get their basket size up," she said. "In a poorer area, people are more likely to be on a budget, and won't buy the prepared foods or a cake."
Getting aggressive
One apparent consequence of the large concentration of supermarkets in Mount Pleasant is aggressive sales and discounts not offered elsewhere. Harris Teeter, for example, has for months been running weekly newspaper coupons only valid in Mount Pleasant offering shoppers $10 off a purchase of $40.
That's a discount of up to 25 percent, every week. Some rivals have responded by honoring those coupons, and by issuing discounts of their own.
"Offering those kinds of things regularly shows that they are willing to go to great lengths to get those customers," Griffith said.
Catherine Reuhl with Harris Teeter said the company has not decided how long to continue the weekly discounts.
The casualty list from the Mount Pleasant grocery store wars is so far small. An Earth Fare store at Towne Center closed in early 2007 after Whole Foods opened a Mount Pleasant store. And Food Lion last year shut down on Coleman Boulevard, not far from a Piggly Wiggly, a Bi-Lo and a Publix.
Food Lion spokeswoman Tenisha Waldo said the location was one of 15 underperforming stores in Food Lion's 11-state operation.
"While the grocery market in Mount Pleasant ... is very competitive, we are pleased with the performance of our two (remaining) stores in Mount Pleasant as well as our 26 locations throughout the greater Charleston region," she said.
In Mount Pleasant's government offices, Town Administrator Eric DeMoura cites a statistic that helps explain why grocers love that area.
"We collect a 2 percent fee on prepared food over here," he explained. "During the recession, we were concerned about the hospitality tax taking a dive, because people would eat out less, but it never happened."
In other words, the high-margin prepared food that grocery stores want to sell is the type of product that Mount Pleasant consumers kept purchasing, even in the worst economic times in decades.
If DeMoura and his co-workers want some prepared food from a grocery store, they have a choice of walking next door to Whole Foods, across the street to Harris Teeter, or by next month, around the corner to Trader Joe's.
Reach David Slade at 937-5552.
