Case Study: Small Expansion, Big Project

Good Foods Market & Café

Good Foods Market & Café: Lexington, KY
Founded: 1972
Number of Members:3,400
Equity Investment: $200 per household
Number of Staff: 110
Retail Square Feet: 10,500

Even expansions of small square footage can be complicated these days, especially when food service is a part of the plan. That’s what Anne Hopkins, general manager at Good Foods Market & Café in Lexington, Ky., learned early on. Their expansion story began in 2005 when their landlord was selling an adjacent 9,000 square foot space. It was too big and costly, so they passed on it. A year later he offered 2,000 square feet and lowered the price. A market study supported the idea of taking on the additional space. They acquired that bit and started the planning process for the space in early 2007.

“We didn’t have current expansion plans,” Hopkins said, but she could see it was a good opportunity to expand café seating, add a bathroom and a deli prep area. Sounds simple enough, but as the planning process got underway, pent up needs by the staff, membership and board came forward. Suddenly, the 2,000 square foot addition potentially became a whole-store remodel as owners said they wanted more fresh meat, beer and a bakery too. “It morphed from a small project to a whole store,” Hopkins said as they contemplated how to integrate a greater vision for the expansion.

“When the bid came back to us it was more than double our budget for leasehold improvements,” Hopkins said. “We had to look at the plan and figure out why it was so expensive.”
As they went back to the drawing board, they engaged the advice of consultants and experienced peers. They worked and reworked ideas, and Hopkins said she was finally able to decide how much was the right amount to spend when she measured the square footage impacted by the different plans and assigned per-square foot dollar cost to it.

In the end, they decided to do the bathrooms and seating area, and expand the grab and go, bakery and meat departments. They also decided to reconfigure grocery aisles, but not remodel the whole store. Hopkins focused specifically on certain food service programs because those sales yield a higher return on the co-op’s investment.

Hopkins has done expansions before, but the pressure for it to “be a good project” is more intense. This is because physical plant changes are complicated, the board, owners and staff need to be properly engaged, and the project has to be financially viable. Hopkins thinks that soliciting the right help, including hiring a project manager, is going to be critical to her project’s success moving forward. “I’ve been cautious,” she said, “I feel a great responsibility to the owners.”

FavoriteLoadingAdd to favorites
By |March 30th, 2008|Categories: Case Studies, Solutions|Tags: |

Leave A Comment