By KRYSTLE CHOW
Published in the Ottawa Business Journal newspaper and website.
Aug. 8, 2011 (Aug. 10 on OBJ.ca)

Click here to view this article on OBJ.ca.

Local produce vendors offer alternative to unsuccessful grocery store model

The second satellite location for the Ottawa Farmers’ Market is now up and running at the Bayshore Shopping Centre, and the hope is that the pilot project will solve the surrounding community’s long-standing lack of fresh produce shops, says the mall’s general manager Denis Pelletier – while giving shoppers one more reason to come to the shopping centre.

“(The farmers’ market) represents a tremendous opportunity as an added service we can offer to patrons, general customers and mall employees,” says Mr. Pelletier.

The market – which last year branched out from its main Lansdowne Park location on Sundays with a satellite at the Orleans Town Centre on Fridays – opened near the Bayshore transit station earlier this month, and the mid-week affair is scheduled to run until the end of the growing season. Mr. Pelletier says it’s the first event ever to use the mall’s exterior grounds, to the best of his knowledge.

It’s something of an experiment for Bayshore, which has witnessed the departure of two groceries and two groceterias in the past, despite strong demand for fresh fruits and vegetables from the local community.

Steinberg’s was the first grocery store to take space at the mall when it opened in 1973, followed by a Your Independent Grocer location and then a Market Fresh in 2004. A Savory’s Fine Foods then opened at Bayshore in the summer of 2006, following the Market Fresh’s closure in December 2005, but it too closed in August 2007.

Today, shoppers are still able to buy some groceries at the Zellers, but locals continue to identify fresh fruits and vegetables as a specific need, something Bayshore hopes to address with the market’s launch.

Mr. Pelletier notes that many of the sister malls owned by parent company Ivanhoe Cambridge have hosted similar farmers’ markets, with favourable results, although he wasn’t able to provide specific statistics.

“We expect a positive impact on traffic, and this improves our overall offerings … we hope to get 3,000 to 4,000 (people) per week to make this farmers’ market successful,” he says.

That figure is based on roughly 7,500 people representing about 2,700 homes in the immediate Bayshore community and the mall’s daily traffic of between 25,000 and 35,000 people, as well as approximately 400 to 500 Bayshore employees that Mr. Pelletier hopes will also “pop by” during their workday.

The added traffic from the farmers’ market represents a boon for nearby businesses inside and outside the mall – Farmers’ Markets Ontario cites studies indicating that 60 to 70 per cent of marketgoers visit neighbouring businesses on their way to and from the market.

It’s something Anita MacDonald has observed when chatting with the establishments located at the Orleans Town Centre. “The businesses directly in the area have noticed an increase in sales and traffic on Fridays that wasn’t necessarily there before,” says the executive director of the Heart of Orleans Business Improvement Association.

She adds some business owners have reported seeing double the amount of people they would normally see on a Friday, especially when combined with the overflow from attendees at the Orleans Festival and its Iron Chef cooking competition tie-in with the farmers’ market.

Ms. MacDonald notes the BIA hopes to organize more events around the farmers’ market to capitalize on its success, including some kind of Oktoberfest or fall festival.

However, some are skeptical of the benefit the farmers’ markets bring to area businesses; Barry Nabatian, a real estate and retail analyst with Shore Tanner & Associates, says surveys of the Orleans area indicate the effect of the market is marginal at best.

As for the new Bayshore location, Mr. Nabatian says the farmers’ market is likely to suffer from the same problems that plagued its produce-providing predecessors.

Firstly, as grocery shopping tends to be a matter of convenience, the multi-level garage parking provided by centres such as Bayshore are less conducive to the quick in-and-out experience that shoppers crave.

While there is ground-level parking adjacent to the market, Mr. Nabatian says shoppers forced to park elsewhere on mall property are unlikely to want to walk up several levels with heavy bags of produce.

Bayshore’s focus on fashion retail also presents a challenge, Mr. Nabatian says. “Food shopping and fashion shopping don’t go together. People don’t dress up to go food shopping, they want to be comfortable, get their food and go home right away. Fashion shopping is a leisure activity, with people taking their time and going window shopping.”

As well, the neighbouring community is largely comprised of rental units, which would not be occupied by the type of people who tend to shop at the pricier farmers’ markets.

“The vast majority of those who shop at the ByWard and Parkdale markets are homeowners,” says Mr. Nabatian, adding that this more affluent demographic would have the luxury of seeking out organic, local produce with less concern for convenience and price, unlike many renters.

There’s one thing Mr. Nabatian and Mr. Pelletier agree on, however, and it’s that the area has a fast-growing population that’s underserved by produce shops.

“If they could somehow have the farmers’ market at grade level with surface parking nearby, they would do better,” says Mr. Nabatian.

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REDEVELOPMENT REDUX

Although Bayshore Shopping Centre’s management says the addition of a satellite location for the Ottawa Farmers’ Market is independent of the mall’s larger plans for redevelopment, both stem from high demand from surveyed customers.

However, while plans for the farmer’s market are now bearing fruit after about a year of organizing, there’s “nothing specific” happening on Bayshore’s redevelopment at the moment, despite the fact that planning documents were filed with the city two years ago.

In 2009, Ottawa’s fourth-largest shopping centre put forward a plan for a $130-million, 250,000-square-foot expansion that would add between 140,000 and 150,000 square feet of shopping and concourse space to the east and allow the two-floor Zellers to consolidate its retail operations on a single floor at ground level.

The Zellers will be converted into a Target when the U.S.-based retailer takes over the lease as it makes its way into the Canadian market in 2013.

The plans also included a rehabilitation and expansion of the parkade.

Bayshore’s redevelopment plans are part of a larger expansion trend among Ottawa’s large regional malls and large power centres of more than 375,000 square feet – St. Laurent Shopping Plaza has also announced it will be growing to 1.3 million square feet, with an anticipated completion date between 2014 and 2015.

The expected growth comes as vacancy rates in the city’s largest shopping malls continue to drop. In the first half of 2011, vacancy in the segment decreased 0.1 percentage points from the second half of 2010, to 0.7 per cent, according to Cushman & Wakefield Ottawa.