A third urban Tom Thumb?

[architect]

Now, for the moment we have all been waiting for: PHOTOS!

I was able to visit both the Gaston and Turtle Creek stores last night. Both stores had changed very little from the previous life under The Fresh Market, except for a substantially larger general grocery and GM selection, and the addition of Florida decor (which meshes very well with the remnant Fresh Market decor). Honestly, these are some of the nicest stores I have seen under the Tom Thumb banner. Although the selection is somewhat limited simply due to the stores' size, both stores feel extremely upscale and seem to mesh well as "the local grocer" within their respective neighborhoods, a model which Kroger can't quite touch. Both stores were also well trafficked, which is quite remarkable considering that the stores opened with little media coverage.

Gaston:









Turtle Creek:

[pseudo3d]

I'm going to guess that The Fresh Market stores were modestly popular to begin with and really what the neighborhood needed, but their stores in Texas just weren't worth the distribution issues and competition that they needed for the long run, and never enough to expand. The Dallas market was only a year old before they pulled the plug but the Houston market was three years old (they bought most of the stores of a small chain called Rice Epicurean), and might have gone better had things gone better.

It's a bit of a shame because TFM did have its perks regarding product mix that Tom Thumb will (likely) never reach, though you're right...Tom Thumb does much better with small stores better than Kroger SW ever did.

[architect]

I'm going to guess that The Fresh Market stores were modestly popular to begin with and really what the neighborhood needed, but their stores in Texas just weren't worth the distribution issues and competition that they needed for the long run, and never enough to expand. The Dallas market was only a year old before they pulled the plug but the Houston market was three years old (they bought most of the stores of a small chain called Rice Epicurean), and might have gone better had things gone better.

It's a bit of a shame because TFM did have its perks regarding product mix that Tom Thumb will (likely) never reach, though you're right...Tom Thumb does much better with small stores better than Kroger SW ever did.

Overall, I think that distribution issues along with strong competition from Central Market convinced them that there were greener pastures to be found elsewhere. In many areas of the country, The Fresh Market's specialty concept is quite innovative and unique. However, in DFW at least, many of these stores targeted the same neighborhoods as the DFW Central Market locations, which are frankly feature a far more extensive selection, better pricing, and a Texas connection through their HEB lineage. In Houston, one would have though that acquiring Rice Epicurian would have given them an advantage, but maybe Rice was just simply loosing too much of their relevance in the market prior to the acquisition (much like Randalls under Safeway).

It will be interesting to see if Albertsons can continue to tweak this Tom Thumb small-store format. If they can make this work effectively, it could give them a huge advantage over Kroger which seems mostly focused on building larger and larger stores right now (even with their urban locations). It could also allow them to regain enough market share to scare off HEB, or at least to give them second thoughts about expanding into the market. Honestly, I think that DFW is now or never for HEB, at least with their traditional stores and pending any major competitive changes (such as another merger or chain shut down or sell off). In many of the urban neighborhoods which are poised to be the primary growth markets within DFW in the coming years, Kroger and Tom Thumb are quickly snatching up the best store sites, which could make expansion difficult for HEB if they don't jump in now. The suburbs will likely remain conducive for expansion for a while longer, however, so maybe HEB is planning to pull a Houston-style expansion where they focus primarily on suburban, single-family residential areas initially, and then infill within the cities themselves as opportunities arise down the road.

[pseudo3d]

Overall, I think that distribution issues along with strong competition from Central Market convinced them that there were greener pastures to be found elsewhere. In many areas of the country, The Fresh Market's specialty concept is quite innovative and unique. However, in DFW at least, many of these stores targeted the same neighborhoods as the DFW Central Market locations, which are frankly feature a far more extensive selection, better pricing, and a Texas connection through their HEB lineage. In Houston, one would have though that acquiring Rice Epicurian would have given them an advantage, but maybe Rice was just simply loosing too much of their relevance in the market prior to the acquisition (much like Randalls under Safeway).

Central Market's prevalence in Dallas (as opposed to Houston) definitely must have really put the hurt on The Fresh Market. Rice Epicurean kept one store after the sale to TFM, but I don't think it was lack of relevance, in fact, they had a number of decent stores in nice neighborhoods. Rice Epicurean was the former "high-end" version of the Rice Food Stores supermarket chain in Houston, which was once quite prominent, and the official reason was that the company was heading more into real estate than supermarket operations. When The Fresh Market came in, they downscaled the sales floor by about half in most locations (at least two were originally built as Safeway stores), except the Lantern Lane store, which was a former Lewis & Coker (they operated some Texas Kmart Foods back in the day), and even then I'm not sure on that.

I'm convinced that it was a wrong start in Houston (the stores being dramatically different and lacking a lot of the nicer features that Rice Epicurean had (like gelato or the fact that they were one of the few places in town that had See's Candies). I'm not saying that it was a failure because of those aspects, but TFM never gained the ground in Houston they really needed.

It will be interesting to see if Albertsons can continue to tweak this Tom Thumb small-store format. If they can make this work effectively, it could give them a huge advantage over Kroger which seems mostly focused on building larger and larger stores right now (even with their urban locations). It could also allow them to regain enough market share to scare off HEB, or at least to give them second thoughts about expanding into the market. Honestly, I think that DFW is now or never for HEB, at least with their traditional stores and pending any major competitive changes (such as another merger or chain shut down or sell off). In many of the urban neighborhoods which are poised to be the primary growth markets within DFW in the coming years, Kroger and Tom Thumb are quickly snatching up the best store sites, which could make expansion difficult for HEB if they don't jump in now. The suburbs will likely remain conducive for expansion for a while longer, however, so maybe HEB is planning to pull a Houston-style expansion where they focus primarily on suburban, single-family residential areas initially, and then infill within the cities themselves as opportunities arise down the road.

While Tom Thumb might gain an advantage in smaller sizes, it needs to be adaptable to larger sizes too, which I think will hinder it in some aspects. As for H-E-B, they've stated that they want to go forward with Central Market in DFW (having more locations there than anywhere in Texas), and they blew two big chances in the last past 10 years, either buying the DFW Albertsons when Albertsons LLC was seemingly just shedding stores like crazy (much like what they did do with the Albertsons stores in Austin) or buying Tom Thumb from Safeway in 2013. Or even buying off the stores from AWG (which ACTUALLY bid on the stores, not Minyard/RLS Supermarkets). The only thing that can really help them now is buying off the Dallas division from Albertsons or Kroger, but it's difficult to see either one becoming a reality, at least for a while. Brute-forcing could work in theory--they would have to dedicate enormous amounts of capital to make this work (Albertsons in Houston MIGHT have worked had they not been fighting off problems from ASC at the time). H-E-B still rules in so many other areas. They keep Albertsons (Randalls) at a distant 2nd in Austin, they fight for #1 with Kroger in Houston while keeping Albertsons (Randalls) in a distant...4th? They still have a few North Texas stores that seem to do better than the market leaders United (also owned by Albertsons). They've locked everyone out of Waco-Temple-Killeen, San Antonio, pretty much anything south of Interstate 10, and have either a major lead (at least) in smaller towns orbiting Houston. Not getting Dallas isn't a big deal.

[architect]

It will be interesting to see if Albertsons can continue to tweak this Tom Thumb small-store format. If they can make this work effectively, it could give them a huge advantage over Kroger which seems mostly focused on building larger and larger stores right now (even with their urban locations). It could also allow them to regain enough market share to scare off HEB, or at least to give them second thoughts about expanding into the market. Honestly, I think that DFW is now or never for HEB, at least with their traditional stores and pending any major competitive changes (such as another merger or chain shut down or sell off). In many of the urban neighborhoods which are poised to be the primary growth markets within DFW in the coming years, Kroger and Tom Thumb are quickly snatching up the best store sites, which could make expansion difficult for HEB if they don't jump in now. The suburbs will likely remain conducive for expansion for a while longer, however, so maybe HEB is planning to pull a Houston-style expansion where they focus primarily on suburban, single-family residential areas initially, and then infill within the cities themselves as opportunities arise down the road.

While Tom Thumb might gain an advantage in smaller sizes, it needs to be adaptable to larger sizes too, which I think will hinder it in some aspects. As for H-E-B, they've stated that they want to go forward with Central Market in DFW (having more locations there than anywhere in Texas), and they blew two big chances in the last past 10 years, either buying the DFW Albertsons when Albertsons LLC was seemingly just shedding stores like crazy (much like what they did do with the Albertsons stores in Austin) or buying Tom Thumb from Safeway in 2013. Or even buying off the stores from AWG (which ACTUALLY bid on the stores, not Minyard/RLS Supermarkets). The only thing that can really help them now is buying off the Dallas division from Albertsons or Kroger, but it's difficult to see either one becoming a reality, at least for a while. Brute-forcing could work in theory--they would have to dedicate enormous amounts of capital to make this work (Albertsons in Houston MIGHT have worked had they not been fighting off problems from ASC at the time). H-E-B still rules in so many other areas. They keep Albertsons (Randalls) at a distant 2nd in Austin, they fight for #1 with Kroger in Houston while keeping Albertsons (Randalls) in a distant...4th? They still have a few North Texas stores that seem to do better than the market leaders United (also owned by Albertsons). They've locked everyone out of Waco-Temple-Killeen, San Antonio, pretty much anything south of Interstate 10, and have either a major lead (at least) in smaller towns orbiting Houston. Not getting Dallas isn't a big deal.

Honestly, I don't agree that HEB has had a truly viable acquisition opportunity for DFW. Although the DFW Albertsons stores would have been a good grab back in 2005, HEB had their hands full with growing market share in Houston, and surely could not have managed another major market expansion simultaneously. In addition, many of the DFW Albertsons locations were either old and undersized compared to a typical new-build HEB, or were in terrible locations (starting in the mid-late 1990's, Albertsons made some very bad real estate decisions within the market). Likewise, when Safeway sought to unload Tom Thumb in 2013, many of these stores were also far smaller than a typical new-build HEB, and would have been difficult to convert since the two chains' stores designs are so drastically different. In a best case scenario, HEB would have been forced to cram a store model which typically spans 100-120k square feet into a 45-60k space (and this doesn't even take into account Tom Thumb's numerous small-format stores, which was uncharted territory for HEB at the time). In both of these cases, HEB would have been immediately building market share, but at the expense of their brand image by not being able to carry as extensive of a product selection in most of their DFW stores when compared to other markets. At this point, Kroger is clearly a stronghold in DFW, and will not be leaving the market anytime soon. Albertsons also seems set on growing the Tom Thumb brand, and could actually stage a convincing turnaround if they are able to market and staff the stores effectively. If HEB decides to enter with their namesake stores, it will primarily be through new construction or acquisition of selected stores, similar to the Minyard Sun Fresh purchase.

As crazy as this sounds, HEB needs DFW to be able to continue to grow. Although HEB is still fighting an intense grocery battle in Houston, their store base in the suburbs is actually mostly built-out (aside from adding new stores as neighborhoods pop up) and they are actively building/replacing stores in the more urbanized parts of the city. They also have Randalls at bay, as for right now, Albertsons seems content on just maintaining the status quo and evaluating their options for the chain (in comparison to DFW and Austin, where their respective chains are in active growth mode). The only markets left to really expand into within the state are the Panhandle (which would be expensive due to the large geographic area and spread-out population centers within the region), East Texas (which would be difficult due to Brookshire's anti-competitive strategies across the region, which include buying up land to prevent competitors from entering along with intense political games) and DFW (which is clearly the most competitive, but also the fastest growing of these three areas and the region with the largest degree of market shift taking place). The best route for an HEB expansion into DFW would be for the company to exploit Albertsons' weaknesses in the market, which are quickly becoming fewer and fewer as the company rallies around the Tom Thumb brand.

Expanding through the Central Market brand only is not a long-term strategy for DFW due to the limited demographics which these stores fit into, unless if HEB was to skew some Central Market stores slightly downward to cater to both high-end shoppers along with shoppers looking for a more everyday grocery experience. Although this would dilute the Central Market brand somewhat, it would also allow HEB to pick up more frequent shopper visits, and ultimately make the chain the "go-to" store for higher-end shoppers in the DFW area, much like Tom Thumb was in its heyday. Some DFW Central Market stores have actually done this to an extent. For example, both the Plano and Preston/Royal CM stores feature a larger selection of HEB-branded products than typical for a CM, catering towards the larger "family" demographic which frequents these stores.

[pseudo3d]

It will be interesting to see if Albertsons can continue to tweak this Tom Thumb small-store format. If they can make this work effectively, it could give them a huge advantage over Kroger which seems mostly focused on building larger and larger stores right now (even with their urban locations). It could also allow them to regain enough market share to scare off HEB, or at least to give them second thoughts about expanding into the market. Honestly, I think that DFW is now or never for HEB, at least with their traditional stores and pending any major competitive changes (such as another merger or chain shut down or sell off). In many of the urban neighborhoods which are poised to be the primary growth markets within DFW in the coming years, Kroger and Tom Thumb are quickly snatching up the best store sites, which could make expansion difficult for HEB if they don't jump in now. The suburbs will likely remain conducive for expansion for a while longer, however, so maybe HEB is planning to pull a Houston-style expansion where they focus primarily on suburban, single-family residential areas initially, and then infill within the cities themselves as opportunities arise down the road.

While Tom Thumb might gain an advantage in smaller sizes, it needs to be adaptable to larger sizes too, which I think will hinder it in some aspects. As for H-E-B, they've stated that they want to go forward with Central Market in DFW (having more locations there than anywhere in Texas), and they blew two big chances in the last past 10 years, either buying the DFW Albertsons when Albertsons LLC was seemingly just shedding stores like crazy (much like what they did do with the Albertsons stores in Austin) or buying Tom Thumb from Safeway in 2013. Or even buying off the stores from AWG (which ACTUALLY bid on the stores, not Minyard/RLS Supermarkets). The only thing that can really help them now is buying off the Dallas division from Albertsons or Kroger, but it's difficult to see either one becoming a reality, at least for a while. Brute-forcing could work in theory--they would have to dedicate enormous amounts of capital to make this work (Albertsons in Houston MIGHT have worked had they not been fighting off problems from ASC at the time). H-E-B still rules in so many other areas. They keep Albertsons (Randalls) at a distant 2nd in Austin, they fight for #1 with Kroger in Houston while keeping Albertsons (Randalls) in a distant...4th? They still have a few North Texas stores that seem to do better than the market leaders United (also owned by Albertsons). They've locked everyone out of Waco-Temple-Killeen, San Antonio, pretty much anything south of Interstate 10, and have either a major lead (at least) in smaller towns orbiting Houston. Not getting Dallas isn't a big deal.

Honestly, I don't agree that HEB has had a truly viable acquisition opportunity for DFW. Although the DFW Albertsons stores would have been a good grab back in 2005, HEB had their hands full with growing market share in Houston, and surely could not have managed another major market expansion simultaneously. In addition, many of the DFW Albertsons locations were either old and undersized compared to a typical new-build HEB, or were in terrible locations (starting in the mid-late 1990's, Albertsons made some very bad real estate decisions within the market). Likewise, when Safeway sought to unload Tom Thumb in 2013, many of these stores were also far smaller than a typical new-build HEB, and would have been difficult to convert since the two chains' stores designs are so drastically different. In a best case scenario, HEB would have been forced to cram a store model which typically spans 100-120k square feet into a 45-60k space (and this doesn't even take into account Tom Thumb's numerous small-format stores, which was uncharted territory for HEB at the time). In both of these cases, HEB would have been immediately building market share, but at the expense of their brand image by not being able to carry as extensive of a product selection in most of their DFW stores when compared to other markets. At this point, Kroger is clearly a stronghold in DFW, and will not be leaving the market anytime soon. Albertsons also seems set on growing the Tom Thumb brand, and could actually stage a convincing turnaround if they are able to market and staff the stores effectively. If HEB decides to enter with their namesake stores, it will primarily be through new construction or acquisition of selected stores, similar to the Minyard Sun Fresh purchase.

As crazy as this sounds, HEB needs DFW to be able to continue to grow. Although HEB is still fighting an intense grocery battle in Houston, their store base in the suburbs is actually mostly built-out (aside from adding new stores as neighborhoods pop up) and they are actively building/replacing stores in the more urbanized parts of the city. They also have Randalls at bay, as for right now, Albertsons seems content on just maintaining the status quo and evaluating their options for the chain (in comparison to DFW and Austin, where their respective chains are in active growth mode). The only markets left to really expand into within the state are the Panhandle (which would be expensive due to the large geographic area and spread-out population centers within the region), East Texas (which would be difficult due to Brookshire's anti-competitive strategies across the region, which include buying up land to prevent competitors from entering along with intense political games) and DFW (which is clearly the most competitive, but also the fastest growing of these three areas and the region with the largest degree of market shift taking place). The best route for an HEB expansion into DFW would be for the company to exploit Albertsons' weaknesses in the market, which are quickly becoming fewer and fewer as the company rallies around the Tom Thumb brand.

Expanding through the Central Market brand only is not a long-term strategy for DFW due to the limited demographics which these stores fit into, unless if HEB was to skew some Central Market stores slightly downward to cater to both high-end shoppers along with shoppers looking for a more everyday grocery experience. Although this would dilute the Central Market brand somewhat, it would also allow HEB to pick up more frequent shopper visits, and ultimately make the chain the "go-to" store for higher-end shoppers in the DFW area, much like Tom Thumb was in its heyday. Some DFW Central Market stores have actually done this to an extent. For example, both the Plano and Preston/Royal CM stores feature a larger selection of HEB-branded products than typical for a CM, catering towards the larger "family" demographic which frequents these stores.

The likely plan for H-E-B is to continue to add stores in the north and south, and eventually build the D.C. they want to use to service those stores. Switching nameplates on some Central Market stores is a potential plan as well. We'll see. In any case, Albertsons needs to groom Tom Thumb to be a good alternative for Kroger in areas where they compete, including competing on price. Larger stores, new things to try. Probably better to merge South and United (into United) to save money and improve operations, but if they master Tom Thumb then they may not need to.

[arizonaguy]

Astoundingly, this wouldn't be the smallest Tom Thumb in the chain once opened. About a mile west of the store at Lovers Lane and US-75 (which itself is a mile south of a smaller store near NorthPark Center) is the Snider Plaza store, a store that befits the Tom Thumb name at around 15k square feet AND still includes a pharmacy. Incredible. (Unless the store has two stories, something I may not have considered)

I've been to the Snider Plaza store. It definitely is only a single story and was one of the most densely packed supermarkets I've ever been in.

The aisles appeared to be taller than a typical supermarket. It almost reminded me of Smart & Final in terms of the height of the aisles.

[architect]

Astoundingly, this wouldn't be the smallest Tom Thumb in the chain once opened. About a mile west of the store at Lovers Lane and US-75 (which itself is a mile south of a smaller store near NorthPark Center) is the Snider Plaza store, a store that befits the Tom Thumb name at around 15k square feet AND still includes a pharmacy. Incredible. (Unless the store has two stories, something I may not have considered)

I've been to the Snider Plaza store. It definitely is only a single story and was one of the most densely packed supermarkets I've ever been in.

The aisles appeared to be taller than a typical supermarket. It almost reminded me of Smart & Final in terms of the height of the aisles.

There are actually quite a few Tom Thumb stores set up this way, with very dense/tall aisle configurations. Along with Snider Plaza, the most notable stores in this regard include Preston Center (Villanova/Pickwick just south of Northwest Highway), Preston/Royal and Inwood/University in Dallas, along with Arapaho/West Shore in Richardson. Aside from the Inwood/University store, all of these locations are legacy stores which have likely stayed open simply due to a lack of available land for a more spacious replacement, and as a result, management has been forced to store products wherever possible. Inwood/University is a unique situation, as this store was built in 2010 as a replacement for DFW's last remaining Simon David, and was constrained by both land cost and neighborhood feedback (Safeway was actually forced to modify their original design for this store in order to minimize impact to the surrounding houses, as the store's footprint was actually increased slightly from the original Simon David site).

Speaking of the Preston/Royal store, I noticed earlier this week that this store still has not received the lighting "upgrade" circulating around the DFW area, one of the only Tom Thumb stores left which has not. Although this store does decent business, I am curious if a closure is imminent due to the fact that it is located in such sloe proximity to the large Preston/Forest location. One thing is for sure, the shopping center which it is located in is an absolute pain to navigate, which likely pushes many potential shoppers to the Preston/Forest location on that factor alone.

[pseudo3d]

Astoundingly, this wouldn't be the smallest Tom Thumb in the chain once opened. About a mile west of the store at Lovers Lane and US-75 (which itself is a mile south of a smaller store near NorthPark Center) is the Snider Plaza store, a store that befits the Tom Thumb name at around 15k square feet AND still includes a pharmacy. Incredible. (Unless the store has two stories, something I may not have considered)

I've been to the Snider Plaza store. It definitely is only a single story and was one of the most densely packed supermarkets I've ever been in.

The aisles appeared to be taller than a typical supermarket. It almost reminded me of Smart & Final in terms of the height of the aisles.

There are actually quite a few Tom Thumb stores set up this way, with very dense/tall aisle configurations. Along with Snider Plaza, the most notable stores in this regard include Preston Center (Villanova/Pickwick just south of Northwest Highway), Preston/Royal and Inwood/University in Dallas, along with Arapaho/West Shore in Richardson. Aside from the Inwood/University store, all of these locations are legacy stores which have likely stayed open simply due to a lack of available land for a more spacious replacement, and as a result, management has been forced to store products wherever possible. Inwood/University is a unique situation, as this store was built in 2010 as a replacement for DFW's last remaining Simon David, and was constrained by both land cost and neighborhood feedback (Safeway was actually forced to modify their original design for this store in order to minimize impact to the surrounding houses, as the store's footprint was actually increased slightly from the original Simon David site).

Speaking of the Preston/Royal store, I noticed earlier this week that this store still has not received the lighting "upgrade" circulating around the DFW area, one of the only Tom Thumb stores left which has not. Although this store does decent business, I am curious if a closure is imminent due to the fact that it is located in such sloe proximity to the large Preston/Forest location. One thing is for sure, the shopping center which it is located in is an absolute pain to navigate, which likely pushes many potential shoppers to the Preston/Forest location on that factor alone.

Don't forget the Central Market catty corner.