Even the local rag is Hip to Hippo's!

New grocery store/deli to call downtown home
Web Posted: 10/18/2006 07:38 PM CDT

Rachel Stone
Express-News Business Writer

Look out, downtown dwellers: Here comes Hippo's. The developer of La Cascada condominium towers is set to start construction next week on a 3,600-square-foot grocery store near Dwyer Avenue and Stumberg Street. San Antonio-based Loopy Ltd. plans to open the upstart grocery before Fiesta 2007, which starts April 20.

The urban grocery store and deli will take up the ground floor of La Cascada's second tower — a 10-story sister to the 12-story luxury condominium tower that opened two years ago. Fairfield Resorts Inc. will operate the second tower as time-share properties. Loopy Ltd. principal Mitch Meyer said he couldn't convince a grocer to take a risk on a downtown store, so he decided to create his own grocery company. He and his partners spent six months researching the grocery business and visiting hundreds of corporate stores and mom-and-pop markets all over North America. "Whole Foods in Austin kicked me out for taking pictures of the shelves," Meyer said.

Hippo's, which will be about the size of a large convenience store, will carry some "fancy" items, but "you can get your gallon of skim milk and a loaf of white bread, too," Meyer said. The store will carry a more extensive selection of wines than anywhere else downtown, he said. And you can drink it in the store. The deli will serve beer and wine, along with sandwiches and soups, and will feature TVs and free wireless Internet. "It's all part of the lifestyle," Meyer said.

About two years ago, Loopy Ltd. bought a Handy Andy Inc. on South Presa Street, which had been the downtown area's largest grocery store. Meyer intended to resell it to a grocer such as H-E-B or Whole Foods Market Inc., but couldn't find any takers and sold it a year later to Ace Mart restaurant supply. The grocery business is tough because stores must rely on high volume to make up for low profit margins, said Rick Johnson, president of the Texas Grocery & Convenience Association in Austin. "Most of your major grocery stores operate on a 1 to 1.5 percent net profit," he said.

The grocery business in urban markets is even more vicious — Urban Market in downtown Dallas recently got a $1.1 million subsidy from taxpayers and private donors to stay in the black, for example — but Meyer thinks Hippo's is different. He said it defies the two major problems that kill grocery stores: a lack of residential density and not enough parking. Hippo's will draw customers from residents of downtown, King William, Southtown and Lavaca, as well as tourists and downtown workers, he said. And Loopy owns a six-story parking garage adjacent to the site.

But the grocery store will already have competition in Delivery Market at 709 S. Alamo St., a 2,000-square-foot market and deli that opened two years ago. Owner Roland Polanco plans to open a second Delivery Market at 318 Houston St. in January. The new market will have 4,000 square feet plus a patio. "We have a lot of demand in that Houston Street area," Polanco said.

But Meyer, who has taken to closing phone conversations and e-mails with "Hippo On," isn't deterred, though he acknowledges that grocery retailing is a risky business: "So is developing high-rise condos on the River Walk, but I did it because passion can sometimes overcome the risk," he said. Once he gets Hippo's rolling, he wants to open 20 more in five years. The company is seeking the public's input on the market. People can tell Meyer what they'd like to see in Hippo's at hipposgroceryanddeli.com.