"It makes us feel proud that we were able to take a space that's been closed for 40 years, and have people feel like this is a place they want to come back to and hopefully support," Jeff Heinen said.
CLEVELAND, Ohio -- Now that the opening day ceremonies are over, the pink-champagne glasses have been drained, and the TV trucks have driven away, the newest Heinen's Fine Foods needs to focus on its primary role of being a supermarket and downtown foodie destination.
The $10-million-plus store must find a way to convert Wednesday's visitors who were nibbling samples, taking selfies in The Balcony wine-and-beer lounge, and posting Instagrams of its Tiffany-style Rotunda, into shoppers who will come back and spend money.
Tom and Jeff Heinen have said that downtown Cleveland doesn't have enough residents yet to support their store, but that didn't prevent them from splurging on the design and aesthetics of the newest Heinen's at 900 Euclid Ave., in The 9 building. The current population of 13,000 residents is expected to balloon to 18,000 within three years, according to the Downtown Cleveland Alliance.
What the brothers saved by not building a store from scratch was more than eclipsed by what they spent to accentuate the architecture and artwork of the 1908 Cleveland landmark, they said. That includes placing their meat, seafood, deli and bakery departments around the perimeter of the circular lobby, and transforming the second-floor balcony into a lounge from which people can sip wine and gaze up at the stained-glass windows from plush couches. And they quietly acknowledge that the Cleveland store will be more expensive to operate than their 17 other Ohio locations.
Wednesday's opening ceremonies and ribbon-cutting drew hundreds of people, from local officials to curious office workers to lovers of architecture, but it was hard to know how many of them were actually shopping. Two items that sold out: More than 200 commemorative Heinen's downtown Cleveland shopping bags, featuring the store's signature Rotunda, and more than 40 pounds of swordfish from the seafood counter.
"Whenever there's a new store, people come in and they just want to look around," trying to determine if they could see themselves shopping here, Jeff Heinen said. "You don't usually expect people to come in and do a lot of shopping."
"We expect that pattern to go on for weeks," twin brother Tom Heinen agreed. "It's true in any store," but perhaps especially so in a building with so much to look at. People vote with their feet and with their wallets, he said, and Heinen's will adjust its assortment of offerings based on what people are buying or ordering.
View full sizeHeinen's sold out of this $1.49 shopping bag commemorating the Feb. 25 opening of the downtown Cleveland store, but said more are available today. Betting the growth will continue
Retail expert Robert Antall, managing partner of Consumer Centric Consulting, said: "This is clearly a risk for many reasons. One, the downtown population is evolving. Likely Heinen's is betting the growth will continue, however nothing is a sure thing.
"Two, food shopping in an urban environment is different," he added. "In general, people shop more frequently and buy less per visit. Parking is less convenient. Traffic, especially during business hours, is usually heavier.
"Some people will walk or bike to the new store, making smaller purchases. Also living in the city generally means smaller homes with less space. What all this means to Heinen's is unknown.
"With that said, I am optimistic that Heinen's will succeed," Antall added. "These are top flight business people who have done their homework. There is a nationwide trend of people moving back into cities. Millennials are urban dwellers and they are the largest population segment. Baby boomers, the next largest segment, are down-sizing. Heinen's has a very strong value proposition that matches the increasing population.
"I believe that the first year or two may be a challenge, but in the long run, Heinen's will be successful in downtown Cleveland," he said.
"Well, it was worth it"
Their primary customers will be those who live and work downtown, but those folks tend to have smaller families and buy less per trip than their suburban counterparts. "We'll learn more about them as we go along," Jeff Heinen said. "We're making notes about what we need, and that will be a three- or four-week process."
Customer comment cards, which Jeff and Tom both personally read, are scattered prominently throughout the store asking for feedback and new ideas (customers are asked to email consumeraffairs@heinens.com or call 216-475-2300 ext. 2337).
From the moment the store opened Wednesday morning, "people have meandered in and lingered," Jeff Heinen said.
For example, one shopper took her validated parking receipt to the garage at 740 Euclid Ave. and was told she would have to pay full price because only 90 minutes' worth of parking was free. She looked surprised, then said, "Well, it was worth it," and fished out her wallet. (Heinen's validates parking only at that garage for customers who spend at least $50.)
The two said they each got an earful from customers who both welcomed them to downtown Cleveland, and congratulated them on having kept the architectural flourishes intact. "People said, 'I'm so glad you didn't trash the place,'" Jeff laughed.
"It makes us feel proud that we were able to take a space that's been closed for 40 years, and have people feel like this is a place they want to come back to and hopefully support," he added.
Tom said the reason Jeff spoke at the ribbon-cutting and he didn't was because "they thought I'd get too emotional and cry. There were times that I did get a little emotional," remembering how their grandfather and company founder, Joe Heinen, banked in that building, and how proud their late father, Jack, would have been about their investing in Cleveland.
Jeff said Heinen's will compete for its grocery and beverage sales with other retailers who are already well-established in downtown Cleveland. "They've been here longer, and we're the new person, so we'll have to earn our business," he said.
The chance to be part of a building like this
Tom said that during focus groups of downtown residents before they decided to come downtown, "when we asked them where they shop for food, some of them said, 'CVS.' And in the suburbs, I'm not sure that a lot of them would say that."
Expanding into suburban Chicago stores before christening the downtown store on Wednesday helped the company to be more nimble and efficient about its store openings, to the point where they have a team of employees who specialize in that process.
"Although we're happy to give those new-found skills a rest, at least for the time being," Jeff added. The brothers have signed a letter of intent to open a store in the Village of Chagrin Falls, but still don't know when that deal will come together.
Jeff credits the Geis brothers for having "the vision of turning this space into a grocery store," when they could have easily turned it into a restaurant or other business. "We did look at other locations downtown, so it wasn't like it came out of the blue, but when you see a round space -- and grocers like squares and rectangles -- we said, 'How's this going to work?' But once you come into this space, and you see the magnificence of it ... the chance to be part of a building like this, we said, 'We need to look at this.'"
Tom Heinen said Ari Maron of MRN Ltd. took them on a walking tour of their future neighborhood on a flawless, picture-perfect day. "It was a beautiful summer day, 73-degrees and not a cloud in the sky," he said. And when he pointed out the buildings and said, 'One hundred units here, and 200 units there," the brothers began to understand what they could become part of.
We have to be a little more innovative
"Retail is about following the migration of people. There are probably more residences being built in downtown Cleveland right now than anywhere else in the seven-county area," Tom Heinen said. "There's been a migration of people moving downtown for years. We still don't have the critical mass here to support this store, so we expect red ink for a while."
Jeff agreed, saying: "We really don't know how successful this second floor [beer-and-wine lounge] will be. We don't know how busy the lunch crowds will be.
"When we open a suburban store, even in Chicago, we can pretty much predict how people are going to use it," but the downtown demographic still has too many variables for them to know if this store will fulfill everyone's enormous expectations, he said.
"That just means we have to be a little more innovative," Tom Heinen said. "We have to be trying new things. This store will be much more event-driven. More events, more planned gatherings."
What about weddings under the Rotunda? Tom shakes his head, saying: "They'd have to be really small."