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SWOT Analysis about doing grocery store in st joseph mo –
Downtown Trader Joe’s
· Convenience: Downtown residents or those working downtown will have a full, trendy grocery store “around the corner”
· Differentiation: Trader Joe’s has a selection of products that are only carried within their stores under private labels. They also have a robust alcohol selection that will be the de facto neighborhood liquor store.
· Footprint: Trader Joe’s stores are as small as 8,000 square feet, making it easier to fit a store within existing areas downtown than a bigger store.
· Brand: Trader Joe’s has acquired a respected brand that will draw people from surrounding communities.
· Competitive wages for employees: Trader Joe’s pays an average of $17.36/hr, making it one of the better paying jobs in the retail sector in Saint Joseph. Additionally, employees get competitive benefits at an average of $85/mo for health, vision, and dental insurance.
· Existing supply chain: Trader Joe’s has existing corporate structures and systems that would not require everyone to “reinvent the wheel.”
· Store experience: Trader Joe’s has deployed private labels in stores that do not carry any baggage from prior experience. To build trust, shoppers are given taste tests that lead to sales.
· Fewer headcount needed than competitors: Due to the size of the store, Trader Joe’s can be more selective than larger stores and draw their best talent.
· Parking: Depending on the location parking and the security of the parking location would be a problem. Smaller lots available downtown limit the ability to add additional parking.
· Higher prices: Due to the smaller volumes and more niche products the prices may be higher than other options.
· Smaller selection compared to competitors: A smaller store cannot over the same wide range of products that a store in a much larger footprint can.
· Break shoppers’ habits: All potential customers currently have their needs met by a competitor even if that option is less convenient. It will be an obstacle establishing new shopping habits with customers.
· Lack of advertising: No advertising would limit how quickly the population would be aware of the new store option and it will be hard to spread awareness on limited time promotions.
· Private labels: Many customers have specific brand preferences on certain items that would not be met.
· Saturation of grocery stores in St. Joe: This grocery store would not meet an unmet product demand need, but it would meet an unmet location need. Two new grocery stores have been added in the last four years. (Price Chopper and a second Aldi)
· Limited purchasing behavior
o Supplemental store: A shopper often will not be able to get their full list of grocery items at this store.
o Less likely to spend large amounts of money: Smaller transactions do not add up in revenue as quickly. Need a higher rate of transactions to remain solvent.
· Open property: Due to the large amount of vacant buildings in downtown St. Joseph, there are several properties that could be potentially renovated or rebuilt to house a grocery store.
· Downtown St. Joseph renovation: A major opportunity for all sorts of businesses, not just a grocery store, is the fact that the city of St. Joseph has recently made a major push to renovate and improve the downtown area. These renovations and improvements include adding new architecture, attracting and offering live entertainment, and increasing the promotions for many events and businesses downtown. This eagerness to have businesses move in could attract a grocery store as both a need for those working and living downtown and also to draw more people down to that area.
· St. Joseph’s rich history: The city of St. Joseph has a rich and deep history that extends hundreds of years with many famous events and people passing through such as the starting point for the famed Pony Express, death place of Jesse James and a popular stop along the Missouri River. Because of this, many local businesses and residents have great pride in making St. Joseph a popular and successful location. A grocery store, especially one that appeals to local residents, would only boster the pride that is within this city.
· Logistics: Due to the convenient location downtown is being right off of Interstate 229 and Interstate 29, the potential for foot traffic or those looking for a quick stop is almost limitless as logistically downtown is placed between two heavily-traveled interstates. Also, due to these interstate systems running through St. Joseph, there are many individuals living outside of the city who commute in for work and therefore would need a grocery store available to offer products before their commute home.
· Grant uncertainty: Much of the development that is improving downtown is driven by grants. We cannot guarantee these grants will continue, causing uncertainty about further downtown revitalization.
· Perceptions of downtown: Our survey data has revealed many concerning items about downtown. Of 103 responses, a significant percentage associate downtown with feelings of old buildings, crime, and parking issues.
· Established competition: The Saint Joseph community has several established grocery stores. These establishments have the ability to change their pricing and selections to undermine competition. Additionally, grocery delivery is a growing segment and may negate some of the benefits of being conveniently nearby.
· Stagnant or decreasing population: Anecdotal evidence is showing decreases in population for Saint Joseph with other counties like Andrew growing. This may impact the number of customers who believe they are within driving distance of a downtown store.
· Proximity to Kansas City: Part of the draw of Trader Joe’s is the unique selection. Other Trader Joe’s stores are within driving distance in the Kansas City metro area. This will limit our regional draw to communities that are to the East, North, and West.
· Low income/purchasing power: Saint Joseph has economic issues that may prevent success for stores that aren’t competing on price. Data shows that Saint Joseph has median incomes at 82.7% of the national average, per capita income at 78.8%, and 25% of the population below the poverty line. Additionally, 2017 estimates show violent crime is 50% higher than the national average and property crime is 2.9% the the national average.
· Crime: St Joseph has above average crime with higher crime rates in the downtown areas.
· Supply chain logistics: The downtown area is tougher to maneuver trucks in that the areas the other grocery stores are.
· Zoning and historical status restrictions: Some otherwise prime locations will not be accessible. These restrictions will be an obstacle towards building a new store.
· Parking: Existing parking may be inconvenient or too small for customers.
“Wolfram|Alpha: Computational Intelligence.” https://www.wolframalpha.com/. Data for “Saint Joseph” article. Accessed 24 Feb. 2020.