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El Paso Economy is in Expansion-Fed PowerPoint Report

February 7, 2012

El Paso Economy

Grocery wars: Pro's Ranch, Vista markets ready to take on Walmart as giant plans expansion

January 18, 2011

This article appeared in the El Paso Times on 01/16/11.

by Vic Kolenc \ El Paso Times

Walmart is the 300-pound gorilla in El Paso’s grocery market with plans to get even bigger by opening four more El Paso stores by early next year.

That doesn’t scare El Paso supermarket operators Mike Piña and Mike Provenzano.

Piña and his two brothers operate the evolving eight-store Vista Markets grocery chain in El Paso, now anchored by three upscale Hispanic supermarkets, including two recently remodeled stores.

Provenzano and his four sons operate Pro’s Ranch Markets (615 Zaragoza), a nine-store Hispanic supermarket chain with one store in El Paso and another planned to open late this year in an East Side shopping center, across the street from a Walmart Supercenter.

“We’re surrounded by Walmart in all our markets,” Provenzano said last week from his California office. “In El Paso, they are the big player. They look at the market, and dominate it very hard. If you can’t compete with Walmart, you better not come.”

Piña agreed that Walmart is the main competitor.

“That’s the reason we’re trying to do different things — cater to the customer differently,” Piña said. “We want to be as different as possible from Walmart.”

Silvia Castro, 37, who was shopping last week at the Vista Quality Market at Doniphan and Sunland Park (3910 Doniphan) on the West Side, said she likes the store’s “Mexican atmosphere,” and especially likes its prepared foods and bakery. The Piñas acquired the store in 2009, and completed remodeling it late last year to fit its Hispanic store prototype.

“I do most of my grocery shopping here. I go to Albertsons for specials. I go to Walmart, but I don’t like the lines. It’s always crowded,” Castro said.

Walmart has taken note of the Hispanic supermarket trend.

Late last year, it completed remodeling a Supercenter near Yarbrough and Interstate 10, adding some features similar to those found in the Vista and Pro’s Ranch stores. The store now has walls painted with vibrant colors and features an area named the “cocina,” or kitchen — a cluster of counters serving prepared Mexican food, Mexican drinks, a bakery with Mexican pastries, and a tortilleria, or tortilla factory.

Yomi Adejokun, Walmart regional vice president in El Paso, said the new design is aimed at El Paso’s Hispanic-majority population. It’s not meant to replicate what Pro’s Ranch and Vista are doing, he said. Walmart has incorporated the design in other areas of the country, and may do more of it here if the changes prove successful, he said.

Walmart in 2009 remodeled two Neighborhood Markets, its grocery store concept, in Houston and Phoenix and turned them into Supermercado de Walmart to cater to Hispanic customers.

“The new design is based on feedback from our customers” on products and atmosphere that they wanted, Adejokun said. The design was planned about two years ago, he said. That’s well before Pro’s Ranch announced last month it would open a store in a former Mervyn’s store in a shopping center at Yarbrough and Interstate 10, across the street from the remodeled Walmart.

Adejokun stressed that the new design isn’t aimed at alienating non-Hispanic customers.

“In each box (store), there is something for everyone, with products for every race and ethnicity,” he said.

More Walmarts

El Paso customers also have said they want more stores so they don’t have to travel as far to get to a Walmart, Adejokun said. That’s one reason Walmart added a new Supecenter last fall at Montana and Joe Battle, and is looking at adding four more stores by early next year, he said.

Two Northeast stores are in the pipeline: a Supercenter at Dyer and Broaddus, which is to begin construction soon, and a store at a yet-unspecified location, Adejokun said. He doesn’t yet know whether the other new Northeast store will be a Supercenter or a Neighborhood Market.

Neighborhood Markets are in the pipeline for a not-yet-specified location in Socorro, and at Lee Treviño and Pebble Hills (3102 Lee Trevino) on the East Side, he said.

Lowe’s distant 2nd

Walmart has seven Supercenters, and four Neighborhood Markets in El Paso with about 4,500 employees. It also operates three El Paso Sam’s Clubs, which have large grocery sections.

Walmart and Sam’s Clubs had 47.3 percent of El Paso’s grocery market last summer, according to data from The Shelby Report, a supermarket trade publication based in the Atlanta area. That share didn’t include the new Walmart Supercenter at Montana and Joe Battle, which opened in October.

Lowe’s, which operates 18 stores in the El Paso area, most of those bearing the Lowe’s Big 8 name, was a distant second with almost 16 percent of the market. The data don’t include Lowe’s two stores in Anthony, Texas.

Albertsons LLC, with eight El Paso stores, had 15.2 percent of the market.

Vista ranked fifth with almost 4 percent of the market. Pro’s Ranch Markets was eighth with an almost 2 percent market share.

Lowe’s officials at its headquarters in Littlefield, Texas, did not respond last week to an El Paso Times request for comments on the company’s El Paso plans.

Lowe’s has traditional grocery stores with lots of products aimed at the Hispanic market.

Albertsons has no plans to open another store in El Paso, said Christine Wilcox, a spokeswoman at Albertsons headquarters in Boise, Idaho.

“We have announced one new store in Denham Springs, La. There are no other plans to announce,” Wilcox said in an e-mail. “Due to the sensitive and competitive nature of our business, we don’t comment on our operations, marketing promotions or (market) position.”

Recruiting chains

Kathy Dodson, director of the city Department of Planning and Economic Development, said the city several years ago began an effort to get other supermarket chains interested in coming to El Paso.

“Our goal is to get some diversity in the market. We hear public complaints that there’s not enough variety in supermarkets” in El Paso, she said.

El Paso food prices had also been running well above the national average until recently, and the aim was to bring more competition into El Paso, she said.

Several supermarket chains have shown interest in this market, but none have made commitments, Dodson said. She declined to provide names.

Adejokun at Walmart said any competition is welcome.

“This is a vibrant community. There’s more than enough (customers) to go around for everyone,” Adejokun said. “There’s no (supermarket) war.”

But whatever the competition, he said, “we will always be the lowest price retailer out there.”

Pro’s Ranch plans

Provenzano at Pro’s Ranch Markets said he doesn’t foresee other supermarket chains coming to El Paso because it’s far from other major markets, and that, he said, creates logistics problems.

Provenzano said he’d like to open additional stores in El Paso.

“We’ll have to see how receptive people are to us at the new store across the street from the big dog,” Provenzano said. The company will spend $6 million to $10 million to turn the former Mervyn’s store into a supermarket, he said. Plans call for opening the store in the fourth quarter.

The recession slowed expansion plans, Provenzano said. Pro’s Ranch Markets plans to reopen a remodeled Phoenix store in March, and to open a new store in Las Cruces in the third quarter, he said.

Provenzano’s company is also looking at putting stores in Dallas and San Antonio, he said. Late last year, it sold its four California stores so that it could concentrate on Phoenix, where it opened its seventh store in December, and on other Southwest markets, he said.

Vista’s remodeling

Piña said he and his brothers would like to add more stores in El Paso after it completes remodeling the three other stores it bought in 2009.

The Piñas bought the local, five-store Quality Food Mart chain in summer 2009 for an unspecified amount.

The Piñas are modeling the stores after its showcase Vista Central Market store at 2231 N. Zaragoza, which opened in September 2007. Remodeling of the Quality store at 10005 Alameda in Socorro was completed in July, and remodeling of the Quality store at 3920 Doniphan was completed in October.

“We tripled sales in those stores” after the remodeling, Pina said. “Next year, we’ll look at possible further expansion.”

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Scott Walker featured in Texas Real Estate Business

January 4, 2010

MIMCO’s Director of Leasing, Scott Walker, recently participated in roundtable discussion published by Texas Real Estate Business. A portion of the article is below, and you can read the full article by clicking on the link at the bottom of the excerpt.

TREB: What is the current state of retail activity in your market?

Scott Walker: El Paso in general has remained very stable. Mom-and-pop operations are continuing to open more locations throughout El Paso. Regional and national retailers continue to open and expand in the area.

TREB: What retail leasing/development trends have surfaced during the economic downturn?

Scott Walker: Approximately 80,000 people have moved from Juarez into El Paso over the last couple of years due to the continued violence in Juarez. As one can imagine, they have moved many businesses/restaurants from Juarez and the economic impact for El Paso has been significant. Additionally, the Fort Bliss military base, which is located in the northeast part of El Paso, is the fastest growing military base in the country. As a result, El Paso expects to have an additional 50,000-plus troops and related residents by 2013. The recently developed Texas Tech University Health Sciences Center, Paul L. Foster School of Medicine is expected to have a $1.5 billion impact on the community and will create more than 500 jobs.

TREB: Have any major developments come online this year? Are any planned?

Scott Walker: There are several new developments coming online this year or planned to come online soon. Among them, Walmart is opening a new site at the Montana and Highway 375 intersection, which should open the last quarter of this year. Along with them, Lowe’s, Chase Bank, Taco Bell and Peter Piper Pizza have already opened. Pad sites remain along with a 10,000-square-foot building that has small space available. Another exciting development in the works is The Fountains at Farah, which is at the North East Corner of Hawkins and Interstate 10, which will be approximately 600,000 square feet. Freedom Crossing which is located on Fort Bliss is a 455,875-square-foot shopping center that is in its last phase with the Grand Theatre, The Exchange, Buffalo Wild Wings, Smashburger, Sarku Japan, Junga Juice, Arby’s, Einstein Bros. Bagels, GameStop and Val Verde opening in November.

TREB: What submarkets are performing best?

Scott Walker: The entire city is doing very well with all of the growth from former Juarez residents. However, the far eastside and northeast continue to be the largest areas of growth and seem to have the most new developments coming on board.

TREB: Have any major retailers entered/exited your market?

Scott Walker: Some of the new retailers to the market include Pot Belly Sandwiches, Five Guys Burgers, Smashburger, Panda Express and the Vitamin Shoppe. There are rumors of several others that have tied up land or are doing due diligence in El Paso but not yet fully committed.

TREB: What is vacancy like? Are rental rates holding steady?

Scott Walker: El Paso does not keep an overall vacancy number for the retail market, but I would guess, based on our portfolio, El Paso vacancy rates are somewhere between 6 and 8 percent.

TREB: How is the second half of 2010 performing compared to the first half? Is there more activity/optimism?

Scott Walker: Again, El Paso in general has been very stable. Regional and national tenants continue to analyze the market and continue to open here, which tells me retailers in El Paso are doing well.

TREB: Do you believe things will turn around in your market in 2011? Why or why not?

Scott Walker: I believe things will continue in the same direction they have been going — a positive one. My enthusiasm for the city in 2011 is very high.