POSTED ON JUNE 16, 2010:
In the Bag
With healthy corner markets on the rise, Scott Smith eyes opening another market
A Lesson Learned. Blue Jackalope owner Scott Smith said his experience at the store has taught him the revenue stream that comes from selling offerings other than groceries is crucial to the success of a small market.
FILE PHOTO/KATIE SULLIVAN
Two years into a rapidly growing project that began with the founding of a small corner grocery market, Scott Smith only laughs when asked if he understood what he was getting himself into.
"I don't know -- it wouldn't be what it is if I had gone into it with my eyes more wide open," he said one afternoon last week while taking a break at the Blue Jackalope, the tiny store he opened two years ago at 306 S. Phoenix Ave. in the Crosbie Heights neighborhood on the western fringe of downtown.
Smith's efforts to make healthy food available and affordable to underserved Tulsans on the north and west sides have gone in a number of directions since he opened the Blue Jackalope, meaning his crusade -- he cringes at the word -- is now much bigger than just his store.
Soon, Smith hopes to open a second operation, this one in north Tulsa. He has targeted a site in the Northland Shopping Center on 36th Street North just east of Cincinnati Avenue that is owned by Neighbor for Neighbor, a nonprofit interfaith organization offering programs that assist the uninsured, unemployed, seniors, handicapped and impoverished. The space is adjacent to the planned University of Oklahoma Wayman Tisdale Specialty Health Center, which is expected to be completed next year.
Smith's new store, at approximately 5,100 square feet, will be more than five times the size of the Blue Jackalope, allowing it to fulfill more of the role of a traditional healthy corner store that offers fresh fruits, vegetables, breads and meats instead of foods loaded with fat, sodium and sugar. He anticipates signing a letter of intent and submitting his financial information to Neighbor for Neighbor by the middle of this month, then securing his financial backing by the middle of August.
"I'm hoping to have something tangible in place by the time the Tisdale crews come in," he said.
The business would feature a small kitchen that would be able to provide lunch for the nearby construction workers and, later, the staff at the Tisdale center.
Smith said his experience at the Blue Jackalope has taught him the revenue stream that comes from selling offerings other than groceries is crucial to the success of a small market. He also believes the larger space at the new store will make a major difference.
"You have to have more space dedicated to inventory and an alternate source of revenue," he said. "For me, that's coffee and the deli. Without that, it would be really hard to succeed."
Smith said he's learned a lot of lessons about how to make a small market work in the two years since he opened the Blue Jackalope. One of the most striking, he said, was that it took quite a while for the neighborhood to accept him.
"Sociologically, there was a lot of mistrust of me opening this place up, even though I had been in the neighborhood a long time," he said. "Even at the one-year mark, the majority of my business was coming from outside the area because of all the media and the press we had gotten. But now things have settled in to the point where we're more of a neighborhood business."
Smith has accomplished that by making the Blue Jackalope a local gathering spot, a space where people can enjoy a cup of coffee or a sandwich while listening to live music, engaging in a forum on topics of local interest or watching a movie. On Sundays, the Blue Jackalope is known for offering barbecued ribs that Smith smokes himself. Even though the store is a mere 900 square feet in size, more than half that area has been turned over to community space.
"We sit around and talk about redesigning the interior," he said. "There are things we can do like using bulk bins and de-emphasizing the candy, even though that's a nice attraction for the kids in the neighborhood. Mostly, just using space that's underutilized."
The Blue Jackalope's status as a neighborhood hangout is well established, but that hasn't necessarily translated into a solid bottom line, Smith said.
"In terms of this place being a sustainable business, it hurts to admit this, but it isn't," he said. "It doesn't do enough business to sustain itself. But it keeps limping along. The business side I've picked up over the last two years tells me I went into it really underfunded."
Traffic was sparse at the Blue Jackalope on a recent weekday afternoon. Smith had just returned from giving his teenage daughter a driving lesson when he was handed a message indicating that his ribs supplier was having a problem meeting Smith's weekly order of nine to 12 slabs. A quick phone call resolved the crisis, but not before Smith was sent into a mild panic.
That issue is typical of the supply challenges the Blue Jackalope faces. With such a small inventory, Smith can't afford to make purchases in the kind of bulk that most wholesalers require. So he resorts to hunting for bargains from other retailers -- Smith calls it "opportunity buying" -- such as Aldi to help keep his shelves stocked.
"So, for me, it's a matter of how much time do I want to go out shopping," he said. "I try to keep the shopping down to three days a week. But there's still a lot I don't know about the grocery industry."
That difficulty should be eased somewhat by the opening of his second store, allowing Smith to begin purchasing in larger amounts that will make his economies of scale more favorable. Still, Smith said, he believes there's got to be a better way than obtaining a sizable portion of his inventory from other retailers.
The answer, he believes, lies in the creation of a food redistribution cooperative venture that would serve the Blue Jackalope and other small grocers, allowing them to place bulk orders from wholesalers. The products would be delivered to a centrally located warehouse from which individual store owners could retrieve their merchandise.
Smith has been working on the idea for several months, recognizing that having such a system in place would provide him with a reliable supplier and allow him to keep his prices lower. And while he declined to provide any specifics, he believes such an apparatus will be in place by the fall to serve his two stores and the Westside Harvest Market, a new grocery that opened at 2232 S. Nogales Ave. earlier this year to serve west Tulsans. The store is a project of the United Methodist Church and Global Gardens.
Smith also is heartened by the recent opening of the Gateway Market, a supermarket at the corner of Pine Street and Peoria Avenue in north Tulsa, and the planned opening of the 2,000-square-foot Latimer Store in Brady Heights by Justin and Leah Pickard. All those enterprises are serving or will serve people whose access to fresh, healthy food has been so limited they live in what have come to be known as "food deserts."
The Latimer Store initially was scheduled to open sometime this summer, but Justin Pickard said recently it was more likely the market would not open until fall. He said he hopes to close on a loan soon from the Tulsa Economic Development Corporation, with the renovation of the building taking two to three months.
Smith has been joined in his fight to improve the access of low-income people to nutritious food by state Rep. Seneca Scott, D-Tulsa, who authored House Bill 3015. The recently passed measure would make healthy corner stores -- those designed by the state Department of Agriculture as markets that sell primarily fresh fruits and vegetables, as well as other nutritious foods -- eligible for low-interest loans of up to $350,000.
Scott is looking forward to the opening of the Pickards' market at 210 W. Latimer.
"It's a big step forward for offering more retail services in that area that continues to be revitalized," he said. "I think it's really exciting, this plan to work with traditional members of the community and local youths to have them work in that store."
In many ways, the Pickards will be hoping to follow in the footsteps of the Blue Jackalope by having their store serve as a community rallying point. Smith believes the Crosbie Heights neighborhood that surrounds his market finally is headed back in the right direction after decades of decline.
"I don't think I can claim much credit for the revitalization or the resurgence of the neighborhood, but this store being here has definitely brought more attention from twentysomethings," he said. "I've had a couple of people tell me they've bought a house here because the store is here. They like downtown and what's happening there, and they were seeking a domestic experience on the fringe of it."
Smith laughed at the idea that the media attention his store has gotten has made him a "celebrity grocer," but he acknowledged that the Blue Jackalope has been very successful at establishing its own brand.
"Somehow, I've tapped into something people are really interested in," he said. "We've got a pretty relaxed atmosphere about most things, and a lot of people come in and do whatever they want to do here ... so it's been successful on some level."
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