Monday, November 2, 2009

Kick Them When They're Down - Culinaria Cannibalizes Downtown's Small Businesses

After nearly four years in business in the Paul Brown Building on Ninth Street, independent coffee house Espresso Mod closed its door for good this past Friday. Owner Paul Charsley was quoted in the Business Journal saying that "Culinaria killed us" and noted that business was down 40% since the store opened in the Ninth Street Garage less than a block north. I had talked to Paul and his wife a few months before Culinaria opened and they said that business had already slowed due to the recession, but that they expected to make it through. That was of course until Culinaria cannibalized both their coffee and lunch business.

Espresso Mod on 9th Street in the Paul Brown shortly after opening in late 2005.

Instead of simply concentrating on groceries, which was a definite need in Downtown, Culinaria went for the jugular by siphoning off business from Espresso Mod, Baladas, City Gourmet (formerly City Grocer) and other existing downtown businesses by including a Kaldi's coffee bar, sandwich deli, pizza by the slice, burgers, quesadillas, and more within their store. An employee of City Gourmet dropped off some coupons in our office just last week for buy one-get one free entrees after 5pm, which leads me to believe that their business has suffered since the opening of Culinaria.

Owner Paul Charsley behind the counter at Espresso Mod

Schnucks received a $4.14 million subsidy
from the City, State of Missouri, and Federal New Markets tax credits to build the Culinaria store.  That comes to a nearly $200 per square foot interior build-out allowance for the 20,800 s.f. space, which is more than a complete out of ground building costs to construct. This was of course after Desco (the development parent of Schnucks) cashed in their developer fee for the Ninth Street Garage and Old Post Office redevelopment destroying the Century building in the process. Neither Espresso Mod or any of the other small businesses that are hanging on Downtown received this kind of subsidy.

Interior of Baladas Bistro at 9th & Pine in the Paul Brown Building

Don't get me wrong, I am glad that Downtown now has a full service grocery, but I'm not happy about it's affect on existing businesses. So next time you go out for lunch Downtown please patronize one of the many independent small business choices available. Your dollars make the difference between their survival or their demise.


Anonymous said...

What if everyone patronizes other businesses and Culinaria closes? I'm sure people think that's unlikely, but it could happen. All-in-all I think Culinaria is a great addition to downtown. Because of it, more people will live downtown and smaller independents will have more customers.

Carrie Nenonen said...

That's a shame. I understand price and practicality for those who work and live downtown in an economy like this, but the small boutiquey businesses are what give the area it's unique flavor. Bummer.

Kara said...

I'm sorry to see Espresso Mod go. I tend to think that the strong interest in Culinaria will die off a bit as it's newness wears off. It's too bad that Espresso Mod couldn't wait this out.

Chris said...

I loved Espresso Mod, but I started having trouble with it being closed when I wanted to go there. Part of the problem? Also, it was a little on the expensive side.

Anonymous said...

It's easy to point a finger, but a true business thrives on creativeness and innovation. If a supermarket coffee stand put you out of business, there were already some underlying issues.

Matt Bauer said...

There is no doubt that some businesses will suffer in the short term. But long term I think this results in a wider variety and better quality of dining options.

The success of Culinaria proves there is a good market downtown. There are still plenty of niches to fill. See the possibility of a Great Clips and Everest Cafe coming to downtown. Culinaria can't duplicate that.

Everyone will need to step it up a notch in their offerings and execution.