Tall order

In just 5,000 square feet of space, Shorty’s The Urban Market brings a full assortment of groceries, meat, seafood, produce and wine to the residents of downtown Lexington, Ky.

“Get Shorty’s!”
That’s what urban planners and downtown redevelopment authority heads are going to be shouting when looking for a supermarket component to jumpstart their revitalization efforts, judging from the impact this little supermarket is having on downtown Lexington, Ky.

Since it opened in May, Shorty’s The Urban Market has become quite the local hotspot, drawing a wide range of downtown office workers, residents from nearby apartment towers and historic Civil War Era-mansions and tourists.

They come in to stock up on fresh meat, seafood and produce along with a full assortment of basic and gourmet groceries. Lines have been known to snake around the corner at lunchtime for the store’s signature panini sandwiches, while dozens of people cram into Shorty’s adjacent wine shop on Thursday evenings for the weekly free wine tastings. Shorty’s has been such a hit that its operators are talking about franchising the concept to other cities, including Cincinnati, Louisville, Birmingham, Vail, Colo., and Wellington, Fla., in Palm Beach County.

“Shorty’s is all about reclaiming our urban community with a lens on scale and street and connections,” Lexington Mayor Jim Gray tells Grocery Headquarters. “It is about doing good, making an investment in the right thing, and it’s about doing well at the same time, seeking a profit and growing a business that benefits our community. Shorty’s is the green grocer in our downtown.”

And it is an award-winner too. In just its first six months the 5,000-square-foot grocery store has racked up numerous awards and accolades.

“We just got voted ‘Best New Store in Lexington’ by the readers of Aces Weekly magazine and we were also named the ‘Best Hotspot for Lunch’ by Aces readers as well,” says Darren Teodoro, general manager.

In addition, the store and its architects, local firm EOP, have won an Excellence in Architectural Design award from the Kentucky Society of Architects, a chapter of the American Institute of Architects, as well as the Blue Grass Trust for Historic Preservation’s Clyde Carpenter Adaptive Re-Use Award for giving an old building new life as a chic urban business location.

Shorty’s is housed in what was once a branch of Central Bank and key elements of the original bank have been preserved. The vault—complete with its massive steel door —now houses the frozen food department. The former safety deposit box room is used for storage and service departments operate where tellers used to stand. “This building had been vacant for years and it was disgusting,” says Lee Ann Ingram, managing partner. “It didn’t have any electricity and the roof wasn’t even attached.”

So why decide on that location? A CPA by trade, Teodoro is a Connecticut native with family roots running deep into the food industry who was drawn to Lexington by his love of horses. He gave up accounting to work as a trainer on a horse farm owned by fashion designers Mark Badgley and James Mischka, who are behind the Badgley Mischka label. When they sold the farm he wanted to stay in the area and looked into buying a little deli on Paris Pike near the Bourbon County line. He asked Ingram for advice and she in turn asked some developer friends who persuaded them to look downtown.

“Downtown these people are very much for redevelopment because they don’t want development moving to the outskirts and taking over the horse farms,” Teodoro says. “They want to keep Lexington the way it is,” Teodoro says, adding that the city is trying to restore and readapt its historic buildings as much as possible.

“I started looking in the downtown area at at least 20 places,” Teodoro says. “This site was the best location. This is the hub of downtown on Short Street. All the new development, all the best restaurants, are all located right on this street.”

Bluegrass food desert

More and more upscale professionals are moving downtown—a massive hotel/condo/office project is slated for an empty lot a block away from the store­—but until Shorty’s arrived there was no where to grocery shop. Lexington may be known for its lush, rolling bluegrass hills, but downtown was a proverbial food desert with not even a 7-Eleven in sight.

“When we first started looking at the demographics we were told that the nearest Kroger was 12 miles from downtown, so roundtrip that was 24 miles,” Ingram says. Given the horrendous rush hour traffic along Main, Vine and High streets, a run to pick up a quart of milk could easily turn into a 45 minute trek.

“People that live downtown don’t want to get into a car and drive out of downtown,” Teodoro says. “There’s the traffic and they live downtown for a reason, the convenience factor so they can go to the gym, grocery store, etc., without having to drive. Plus, with the economy the way it is, people are much into saving money and being efficient and effective. If they have to leave downtown to go grocery shopping they are not doing that.”

Teodoro says initially Shorty’s was expecting its customers to shop maybe every two days. “There is not a lot of waste that way in your home because you are not overbuying and are just buying for a couple of days,” he says.

“Our idea started that you could shop for 48 hours and get what you needed for a couple of days, but we are finding that a lot of people come in every day and just buy what they want to eat for that day and to check out our specials and whatnot,” Ingram says.

Shorty’s is modeled after the upscale grocery stores found in New York, Chicago and other major cities. For ideas Ingram says they visited famous upscale stores, including V. Richard’s in Birmingham and the Turnip Truck in Nashville. “At the Turnip Truck they didn’t sell toilet paper—they sold organic toilet paper,” Ingram says. “We would buy things as we went in and the toilet paper was like using cardboard and the only dog food was organic. I said we need Tide, Cheerios, Alpo and Charmin.”

They were not aiming to be a  “gourmet” or “high-end” store, Teodoro says. “We just want to be a grocery store, but we do offer a lot of high-quality product but at prices that are affordable for everyone.”

Many prices are slightly higher than Kroger and Meijer, but when the cost of gasoline and time and convenience are factored in the difference is negligible, he says.

Some might also question Shorty’s selection. After all, with only 4,000 square feet of selling space about 15 Shorty’s could fit inside the average 60,000 square-foot Kroger.
“Our selling space is not very much compared to a Kroger, but if you go and look at the variety compared to the other stores you’ll see that we have almost everything they have, just on a smaller scale,” Teodoro says.

Paraffin and pantyhose

Indeed, Shorty’s stocks a full and eclectic assortment of groceries, including mainstays like Hellmann’s mayonnaise, Heinz Ketchup, Jell-O, Betty Crocker instant potatoes and Full Circle organic products. There is also a significant presence of nonfoods essentials including Mr. Bubble bubble bath, Chinet napkins, Kiwi shoe polish, Ace bandages and even Gulf Wax paraffin wax for canning and L’eggs pantyhose.

“We have to carry pantyhose,” Teodoro says. “The restaurants requested it for their waitresses because they rip their pantyhose.”

And while Shorty’s has a symbiotic relationship with the area restaurants—chefs pop in for a last-minute lemon or lime and the retailer buys restaurant gift certificates for its employees­—it is carving out a name for itself in Lexington’s fine dining scene.

“What we’ve expanded into, which we didn’t mean to, are our lunches and catering,” Ingram says. “Yesterday [Oct. 25] we did $1,900 at lunch in an hour and a half. We sold out of pork tenderloin in 30 minutes. We’re now expanding into a little bit of breakfast.”
Business has been so brisk that Teodoro hired two additional chefs, graduates of the prestigious Johnson & Wales University. They are working out of the Shorty’s new kitchen—about the size of a home kitchen—tucked into an alcove between Shorty’s main store and adjacent wine shop.

“We’re going to have a fryer so we can do a fixed menu during the week, have a fish fry on Friday with hush puppies and that sort of thing, all the Southern stuff,” Teodoro says.

This fall the retailer opened a wine shop in an adjacent storefront at 157 West Short Street, hence its Shorty’s Cellar 157–The Urban Wine Shoppe moniker. According to Wes Pearce, wine manager, Shorty’s Cellar 157 stocks around 150 SKUs, mixed between imported and domestic, a number that is steadily growing with two to three varietals added weekly.

While most of the domestics hail from California, Washington and Oregon, Kentucky is also well represented. “We support the Kentucky Proud program and have about 15 Kentucky wines and a very nice selection of probably 15 to 20 Kentucky bourbons,” Pearce says. “People come in and want to support Kentucky wines and food, so we have Kentucky cheeses in this department also,” he says, motioning to the refrigerated cooler just beyond the cash register. “A lot of people come in from out of town and want a wine from Kentucky.”

Pearce says Shorty’s average bottle retails for around $9.99. “Wines selling for $14.99 are also popular and we have everything up to $100 a bottle,” he says, adding, “We have a unique clientele. We have people coming in looking for things that they can store on their shelves—their trophy wines.”

Business has been steadily building, aided by the fact that the nearest wine shop is more than a mile away. “We have the Liquor Barn on the outskirts of town, which is like our big Walmart of liquor, but I think people get tired of going there because you don’t really get the personalized service,” Pearce says. As part of its attention to customer service Shorty’s conducts free wine tastings on Thursday evenings. On one recent evening four different Spanish wines were sampled, along with fresh oysters. “It is getting to be a big deal,” Pearce says. “We get about 40 to 50 people between 5:00 and 7:00.”

After purchasing their wines, many customers head out the front door and right into Shorty’s main store, and vice versa. Although the stores are in two separate adjoining buildings a passageway in the rear of the wine shop connects them—and the new kitchen—but it is not for public use. “Technically that pass-through is for employees. By law shoppers have to come outside and come back in and there has to be a separate register,” Teodoro explains.

Old-fashioned checkout

Shoppers entering the main store grab either a mini bi-level carriage or hand basket and head down the long single aisle that runs to the back. To the right are seven-tier shelves lined with condiments, pickles, barbecue sauces and peanut butter and jelly; to the left is the checkout counter, not a conveyor-belt checkout “lane” like one would find in a traditional supermarket, but rather a genuine marble “counter” that hearkens back to the day of the old-fashioned general store, replete with candy bars, gums, mints and other snacks, as well as local honey. Behind it HBA items, including Pepto-Bismol, Claritin, Aleve, Afrin and Zantag line the wall and are retrieved for customers upon request.

“Our front-end uses Easy Scan registers and we find it is a very, very good system,” Teodoro says. “I am very pleased with it. It is very user friendly. It does everything you need and everything is tied into your accounting system so it works well.”

Further down on the left is the service deli/sandwich station/meat/seafood/bakery counter.

The deli features homemade salads and has also developed a strong following for its made-to-order sandwiches using Boar’s Head lunchmeats and local artisan breads merchandised from weathered antique bins below the counter. “With the bakery, my bread bill is easily $1,400 per week,” Teodoro says. “We go through a lot of bread, a lot of sandwiches. But it is the artisan bread that sells. The bread makes the sandwich. It really does.”

Produce is merchandised across the aisle from the service counter and includes a cornucopia of mainstream and exotic product, including heirloom tomatoes and Morel mushrooms, sold at competitive prices.

“Our best-selling items are bananas,” says Rusty Campbell, retail sales manager. “We just got two cases in yesterday and I had to get more in today because we already sold out. We sell so many bananas that it is crazy.”

But Shorty’s tries to hang its hat on local produce.

Much of it comes from the farmers market held every Saturday down the block at the Fifth Third Bank Pavilion, a block-long covered glass canopy that serves as the city’s meeting spot. “When the farmers are finished they bring their left-over products up here because we try to sell the overflow product during the week,” Ingram says. “We have local honey, coffee, cheeses and meats, too.”

Dairy is merchandised from cases adjacent to the service cases and includes take-and-bake pizzas, packaged meats, bacon, milk and cheese.

In the vault

The dairy case leads to a short aisle of canned goods and boxed cereal, opposite pet food, and that, in turn, leads up to the Vault—the solid steel round door from the bank’s vault that allows shoppers to enter the refrigerated beverage and frozen food cases by traveling up a small ramp with their shopping carts.

On one side is where cold soda—including local must-have Ale 8-1—is merchandised, along with beer, while the cases on the other contain frozen foods. A pretty broad assortment is carried inside the eight doors, including Amy’s organic items, Marie Callender’s pot pies, Ore-Ida potatoes, Stouffer’s and Hungry-Man dinners, Pepperidge Farm layer cakes and ice cream brands such as Graeter’s and others.

Outside the Vault, groceries and non-foods/general merchandise are merchandised on black standard shelving that blends in nicely with the rustic bare brick walls. In addition to traditional groceries there is a pretty extensive assortment of gourmet items.

Shorty’s main wholesaler is Laurel Grocery out of London, Ken. Teodoro contacted them on the recommendation of Fish Market, his seafood supplier. “Laurel is very good. I have two trucks a week from them, plus I have a lot of DSD vendors that I use,” Teodoro says. “My produce is piggybacked through them as well, out of Caito Foods in Indianapolis. I use Sysco for some stuff, but most of our other product is all local from nearby bakeries, farmers and honey producers. I have a good rapport with them.”

Teodoro needs two delivery trucks a week because of his limited storage space. Excess groceries are stored on the top shelves, accessible by a rolling ladder, the kind found in libraries. “I find because I don’t have storage, what I have on the shelves is what I have in inventory, so it turns over a lot faster and my shrink is very low in terms of trying to move product because it rotates so well,” Teodoro says. “I wish I had more room for storage, but then I think I would be stockpiling stuff. This way at least I know what I have on hand in the store and what I need to order so it keeps moving.”

Because Shorty’s is proving to be such a hit Teodoro is talking about expansion. “We have been asked to do other stores elsewhere. We are looking at franchising,” he says, noting that he has been approached by developers from several mid-size cities similar to Lexington, including Birmingham, Cincinnati; Louisville; Franklin, Tenn.; Vail, Colo.; and Wellington, Fla. “Everybody wants us to keep it the same feel.”

Teodoro is also thinking of expanding the original Shorty’s in Lexington, should his neighbor the Traditional Bank move out later this year. If that comes to fruition, downtown Lexington residents can look forward to a bigger deli with a sit-down Café and more grocery and nonfoods items.    

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