What would it take for downtown Knoxville to get a grocery store? We spoke to the experts

Like an empty stomach, talks of a downtown grocery store have been rumbling as the number of residents in the city's core continues to grow. 

But before a large grocery store chain — or an independent grocer, for that matter — would locate downtown, it must consider a variety of factors from parking availability to customer base. 

"From a downtown standpoint, we haven't been prodded by anyone to try and find a location," said Budd Cullom of Knoxville's CHM Development, which specializes in grocery stores and retail. "That doesn't mean any of these (grocers) might not be looking." 

A 30,000-square-foot grocery store space is included in renderings for the proposed Old City baseball park complex, but no tenant has been announced. 

A forthcoming mixed-use redevelopment at 300 W. Magnolia Ave. will include a 10,300-square-foot space that could be utilized by a small grocery tenant. 

But do grocers see downtown Knoxville as a viable market?

Finding a suitable location comes with its own set of challenges. And although downtown has grown over the past decade with an influx of urban dwellers, Cullom said, "the market is still considered a little bit thin."

Does Publix already serve downtown?

Cullom worked with Publix to open its store at University Commons in 2014. 

"The University Commons project, although it was ... what you would call 'urban,' they still felt like they were capturing several submarkets," he said. "They felt like there were more things that could feed into that store, as opposed to downtown (where) you're pretty much limited." 

Sequoyah Hills is one submarket for Publix, Cullom said, as well as the University of Tennessee when it's in session and residents south of the Tennessee River off Alcoa Highway. 

The store is also accessible from downtown Knoxville by trolley. That's one way Bill Lyons, a downtown resident and former deputy to the Knoxville mayor, gets his groceries. 

Lyons, who also served as the city's chief policy officer and board chair for Knoxville's Community Development Corp., remembers a handful of proposals for a downtown grocery store roughly 15 years back. Some proposals included requests for the city to assist with the costs of operating a store. 

The city never received a "viable proposal," Lyons said, and the conversations dwindled — especially after Publix opened at University Commons. 

But the number of downtown residents has grown from 1,100 in 2000 to roughly 2,600 today, according to the Downtown Knoxville Alliance, and those conversations are starting to pick up again. 

What would it take to get one? 

Each grocery store chain is different, but most have metrics for deciding where a location would be viable. 

In 2018, design and real estate strategy collective Streetsense examined the viability of a downtown grocery store in Memphis as part of an overall downtown analysis for the Downtown Memphis Commission. 

Larisa Ortiz, managing director of public nonprofit solutions for Streetsense, said it was determined downtown Memphis could support a store like a Save A Lot, but not a Kroger. 

From her analysis, Ortiz said, Kroger would have needed more than $500 per square foot in annual sales. Their average supermarket is around 64,000 square feet, she said. 

Save A Lot needed closer to $250 per square foot to support its costs, with the average store closer to 55,000 square feet.

To support the store, Ortiz said, Save A Lot required an urban population of at least 35,000. Downtown Knoxville has just a fraction of that population, but nearby neighborhoods like Fourth & Gill and Old Sevier could be considered part of an urban customer base. 

Each chain has different criteria for what would make a grocery store viable in any given location, she said, and larger chains tend to be unwilling to experiment outside their standards. 

Streetsense also looked at the viability of downtown grocery stores in Baltimore in 2017 and considered whether an Aldi could work there. 

Aldi considers density within a 3-mile radius when looking at the viability of opening a location. If there is an existing store within three miles, Ortiz said, the company would most likely think twice. 

The Publix at University Commons and the Food City on Western Avenue are about a 2-mile drive from Market Square. Three Rivers Market is just about 1.5 miles away from the city's core. 

"A downtown environment may not be the typical format of that grocer," Ortiz said. "So, they're not going to risk a place that they don't totally understand particularly well." 

What about an independent grocer?

Independent grocers and smaller chains could be a more viable option for downtown areas because they typically have more flexibility when it comes to algorithms and space requirements, Ortiz said. 

"Most chains have pretty defined store formats," said Laura Strange, spokesperson for the National Grocers Association. "What we've found on an independent side, because they don't have that chain, corporate mentality, they are able to be pretty agile and nimble on those business decisions." 

The National Grocers Association represents independent grocers, which Strange said often can impact communities more than larger chains. 

"One thing that we have found from our members is that they're very much layered into the fabric of the community," she said. "And they're really at the heart of that community and at the center of not only the economic development but also supporting the community." 

Because of this mindset, she said, independent grocery stores also are less likely to withdraw from a community. 

Finding a space, providing the parking

The only grocery option in the core of downtown Knoxville is The Market on Gay Street, which offers a limited food supply that includes produce and dry items similar to what can be found at a high-level convenience store.

Cruze Farm is also one of the only places in downtown that offers fresh milk for purchase. 

Lyons said not too many downtown spaces are big enough to support a grocery store, as most of the city's empty lots have been filled in.

And when thinking about parking opportunities for a potential grocery tenant, Cullom said, a flat lot would be "almost impossible" in downtown Knoxville. Not only is downtown space limited, but a parking lot would not mesh with the pedestrian-focused character of the city's core. 

Most likely, Cullom said, a grocery store would need structured parking similar to University Commons, which could triple the cost of construction.

“Here’s what I have seen not only with Publix but with other retailers … In an urban environment where they do know there is pedestrian traffic, they will relax their parking ratio requirement that they typically have," he said. 

However, according to Ortiz, the lifestyle of potential customers also must be considered by grocers.

"Downtown environments are presumably more walkable," she said. "A grocer has to feel comfortable that their customers are open to walking." 

While an urban store might not need as much parking as a suburban store, she said, it still needs to make just as much money as one. 

"These are not risk takers for the most part," she said. 

Even for larger cities, it's a challenge

All things considered, Lyons said, the proposed baseball stadium site seems like a logical option for a downtown grocery store if experts determine one is needed. The store would be supported by residents living in nearby condos and apartments, including Austin Homes.

While the store would be walkable for residents living on Gay Street, it might not be feasible to carry groceries that far. A secondary form of transportation probably would be needed.

As a downtown resident, Lyons doesn't feel the need for a downtown grocery store with Publix and The Market so close by — but it would be nice. 

"Once I get in my car, I'm the same as everyone else," he said, noting that everyone has to drive to the grocery store whether they live downtown or not. 

"Even when you go to some of the larger cities that really have a lot of people, built in residents right in the downtown, it's still very, very difficult to find the right location and make the numbers work on a grocery store," Cullom said.

"It almost becomes a labor of love for the developer, and the grocery store has to really want it.”'