Tuesday, June 18, 2013

New Grocery Supermarket Not So Okey-Dokey

How can an unknown and non-existent grocery company quickly open up stores in South Florida, and directly compete for market share in the highly competitive and powerful grocery and supermarket industry? 

Okey Dokey Grocery Market, had grand plans to quickly explode upon the South Florida scene by opening up 30 stores by the end of 2012, and plans to open at least 50 stores each year after that.  This blitzkrieg-type expansion concept was conceived by Okey-Dokey's parent company, AgroTrade.  Since AgroTrade successfully developed two food retail stores in Eastern Europe called Karusel and Pyaterochka, they planed on accomplishing the same success within the United States by first targeting the South Florida Market.
Okey Dokey Supermarket

Grocery Supermarket Concept

First, AgroTrade leased a 136,000 square-foot warehouse distribution facility in Miami-Dade County that would service their grocery markets scattered throughout both Miami-Dade and Broward County.  

AgroTrade then hired representatives to search for and find retail shopping centers in Miami-Dade and Broward County that could provide between 4,500 to 7,500 square feet of retail space for their Okey Dokey grocery markets.  According to Roy Sartin, AgroTrade's director of personnel development, "Our goal as a company is to provide every community with quality and value priced groceries in a convenient and friendly environment."

The Search For Shopping Center Locations

Around April, 2012, AgroTrade identified the Miller Heights Shopping Center, located in Miami, Florida, as one of several potential sites to open up grocery stores selling items including tobacco, beer, wine, and liquor.  Because the Miller Heights Shopping Center was in the midst of a major facade renovation project, several rental units were available, and could be combined in order to accommodate Okey Dokey's size requirement for their business.

Miller Heights Shopping Center
9375 SW 56th Street, Miami, Florida 33165
The property management and leasing at the Miller Heights Shopping Center is handled by Sharpe Properties.  According to Mason Sharpe, Vice President and General Counsel with Sharpe Properties, Okey Dokey tried to compete with well established national tenants for the same storefront locations.
"During the shopping center's renovation project, several other well known pharmacies, grocery markets and dollar stores were competing with Okey Dokey to open up at our shopping center.  Although Okey Dokey was willing to lease the location at favorable lease terms, we were concerned with the tenant's unrealistic expansion plans, and their lack of experience within the South Florida real estate market.  Consequently, we selected Dollar General to become the shopping center's anchor tenant."
Although Okey Dokey was not able to meet their lofty expansion goals, they were still able to open up at several retail shopping centers throughout South Florida.

Supermarket Sizzle Quickly Fizzled Out

According to Okey Dokey Markets' website, they are still open for business:

Twelve (12) Currently Open Stores in South Florida
  • 6 in Miami-Dade County
  • 6 in Broward County
Nine (9) Future Store Locations in South Florida
  • 3 in Miami-Dade County
  • 6 in Broward County

However, landlords and property managers of South Florida properties are now saying that Okey Dokey has already started to close up their grocery stores, and turned over their rental locations back to the landlord.  

Additionally, Oscar Musibay, a reporter with the South Florida Business Journal, recently reported within a news article  that Miami-Based AgroTrade America, whose senior executives are behind the X5 Retail Group, have notified the state that it plans to lay off 157 employees in August.

Regardless of whether Okey Dokey is able to keep some of their grocery markets and remain afloat in the South Florida area, their initial plans of directly competing with well-known grocery supermarkets such as Publix and Winn-Dixie, and national tenants such as Walmart, Target, Dollar General, Dollar Tree, and Family Dollar have quickly fizzled out.  Just because AgroTrade's concept worked in Europe doesn't necessarily mean that it will work in the United States as well.