Owners of malls and retail centers are increasingly seeking to open specialty food markets

Landlords looking to lure shoppers to their malls and retail centers are trying a fresh idea: specialty-food markets.

Nearly every major retail development proposed in North Jersey in the last five years has included plans for a food market described variously as a "gourmet market" or "fresh and prepared foods market" or a "Whole Foods-type market."

A Whole Foods Market store is the goal for landlords with 60,000 square feet or more to fill, after the success of the stores in Edgewater and Paramus. But Fairway Market, Wegmans, Trader Joe's and Stew Leonard's also are on the short list of chains that developers are courting.
"Usually we're a big draw for any shopping center, because we get 100,000 customers a week in our [food] stores,'' said Stew Leonard Jr., president and chief executive officer of the Stew Leonard's chain.

"We're a high-traffic generator. Landlords like us for that reason."
Large wheels of cheese at the new Whole Foods at Bergen Town Center in Paramus. The borough is becoming something of a foodie focal point: It also has a Trader Joe's store and a Stew Leonard's.

Interest in "fresh-style'' markets among developers has been fed by the success of the Whole Foods chain, whose New York and New Jersey stores often draw more than 100,000 shoppers per week. A survey by market research firm The NPD Group last year found that 70 percent of Americans said they were going out of their way to purchase and eat "better for you'' foods such as whole-grain or organic options.

"Landlords are coming to us and asking, 'Are there any food markets that we can bring in, because we need someone to generate traffic,' " said Chuck Lanyard, president of Paramus-based real estate brokerage firm The Goldstein Group.

The "fresh markets" landlords crave usually emphasize high-quality produce, prepared "take-home" meals and treats not found in typical supermarkets, such as hand-rolled and fresh-baked bagels (Fairway), shish kebab, gyro and panini stations (Whole Foods) and fresh mozzarella made while you watch (Fairway and Whole Foods).
Bounty in Paramus

Two Paramus shopping centers that put in early bids for these types of food stores are poised to reap the rewards this month. A 63,000-square-foot Whole Foods store opened at Bergen Town Center on Thursday, and a 52,000-square-foot Fairway will open this Wednesday at the Fashion Center.

The new stores make Paramus something of a foodie focal point. It also has a Trader Joe's store and a Stew Leonard's.

Various Paramus landlords have been trying to entice the Stew Leonard's chain to bring one of its food stores to the borough, but Leonard said the company is going to concentrate on its wine stores in Paramus and Clifton for the time being.

Vornado Realty Trust, the company that bought the former Bergen Mall in 2005, with a plan to remodel it into a modern shopping center, made a Whole Foods Market a key anchor store in its vision for a rejuvenated mall.

A Vornado spokesman said Whole Foods was the company's top choice for a food market because of its ability to attract shoppers beyond Paramus.

The drawing power of a Whole Foods was in evidence Tuesday, two days before the store opened, when more than 1,300 people paid $10 to take a "sneak preview" tour of the store.
The cash registers weren't open, and nothing was on sale yet, but Whole Foods fans lined up to meet the manager, fishmonger and other store employees, and to sample everything from skin cream to salmon. The $10 entrance fee was donated to a charity.

Among the Whole Foods fans at the preview tour were two Woodcliff Lake moms, Dona Eichner and Peggy Belinski, who said the store has given them a reason to once again come to the former Bergen Mall.

"To go to Ridgewood is a trip," said Belinski, referring to another Whole Foods location.
"This is very convenient. I can stop here and run into Whole Foods," said Belinski, who said she shops at Whole Foods because she wants her family to eat healthier foods.

"I'll definitely come here," she said.

Magnetic appeal

Christina Minardi, Northeast regional president for Whole Foods, oversees 19 stores in New Jersey, New York and Connecticut, and has 10 more stores "in the pipeline," including one in Closter. Minardi said the new Paramus store will fill a gap between the existing stores in Ridgewood and Edgewater and should lead Whole Foods shoppers who live near Paramus to make more frequent visits to Whole Foods.

Landlords are hungry to land a Whole Foods because "other retailers can latch on to the foot traffic that Whole Foods will bring to a center," said Michael Fasano, regional manager of the New Jersey office of Marcus & Millichap, a real estate investment firm.
Fasano said he's seen the lure of Whole Foods firsthand.

"I'm in Elmwood Park, and three or four times a week a group of guys from the office go to Whole Foods in Ridgewood just to have lunch, because it's quality, it's healthy, and they enjoy the atmosphere.''

Stores such as Whole Foods and New York food institution Fairway are prized tenants for several reasons, said food retail consultant Bill Bishop.

"The demographics of a fresh [food] store are very attractive," said Bishop, chairman of Willard Bishop LLC, a food retail consulting firm based in Barrington, Ill. "The income level skews upward."

The stores also draw customers from a geographic area "substantially larger than a supermarket because people will drive farther to get something special," Bishop said.

Shoppers tend not to use the gourmet or specialty-food markets as their primary grocery stores, Bishop said, but shop there for out-of-the-ordinary items, "which actually makes them ideal to combine with other shopping trips," he said. "People will say, 'I'm going to the lifestyle shopping center and we're going to get a wonderful loaf of bread at the same time as we do two or three other things, because that's the only place I can get that bread, or that pie, or that piece of salmon,' " Bishop said.

Fairway, a chain begun on Manhattan's Upper West Side, believes it stands out from the other fresh and gourmet markets by being a place where people can do all their grocery shopping, as well as pick up an exotic olive oil or a specially aged cut of beef.

"We're sort of a cross between a Whole Foods and a ShopRite," said Howard Glickberg, whose grandfather founded the first Fairway. "I'll have the Whole Foods quality at much lower prices. I'll have pretty much the same assortment as ShopRite on groceries, and I'll price myself at or below them," he said.

Fueled appetites

The Fashion Center store will be the fourth Fairway, and the chain is working on a fifth location in Westchester County. The company recently received a $150 million cash infusion from the private equity firm Sterling Investment Partners of Westport, Conn., which took a large stake in the Fairway to finance an expansion.

Lanyard of The Goldstein Group said chains such as Zeytinia, which has stores in Englewood and Oakland and which is slated to come to the Xanadu mall in the Meadowlands, and Garden of Eden, which has locations in Hoboken and South Orange, also are mentioned as tempting tenants for landlords.

Both chains feature selections of fresh foods and prepared meals. Wegmans, a traditional supermarket with an emphasis on produce and prepared foods with seven stores in central New Jersey, also would be a coup for a North Jersey landlord because local residents are familiar with the chain.

Stew Leonard Jr. believes the appetite on the part of shoppers and developers has been fueled by the popularity of the Food Channel, and television cooking shows.

"People are much more into cooking," he said. "They're making an event of eating at night."