Atlantic City Supermarket Paper

Atlantic City Supermarket | April 2015 Feasibility Study
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Feasibility Study
April 2015
Stockton University
Prepared for:
Fema Long Term Recovery
Mark Strohoefer
Thomas Fesen
Prepared By:
Rachel D’Angelo
Grace Mazur
Caitlyn Ruffalo
Florencia Nievas
ATLANTIC CITY
SUPERMARKET

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Table of contents
1. EXECUTIVE SUMMARY………………………………………………………………………………………….…1
2. INTRODUCTION………………………………………………………………………………………………..……….2
3. BACKGROUND……………………………………………………………………………………………………………..2
A. Geography………………………………………………………………………………..…………………...2
B. Wards………………………………………………………………………………………….………………….2
C. Transportation………………………………………………………………………….…………………2
D. Demographics……………………………………………………………………………….………….....3
E. Tourism ………………………………………………………………………………………….……………...3
F. Target Market………………………………………………...………………………….………………..3
G. Future Plans for Atlantic City………………………………………………….………………4
4. SITUATION ANALYSIS………………………………………………………………………………………….....4
A. Competitive Landscape……………………………………………………………….…………….4
B. Food Desert……………………………………………………………………………………….……….….5
C. Tourist Destination Status……………………………………………………………………....5
D. Perception of Crime…………………………………………………………………………………….5
E. Food Stamps………………………………………………………………………..………………………..6
F. Cargo Transportation Routes…………………………………………………………….......6
G. SWOT Analysis……………………………………………………………………………..…………….7
H. Similar Cases………………………………………………………………………………………………….7
5. RECOMMENDATIONS………………………………………………………………………………………………8
A. Store Layout…………………………………………………………………………………………………..8
B. Companies That We Suggest………………………..………………………………………..9
C. Land Suggestions…………………………………………………………………………………………9
D. Marketing Strategies…………………………………………………………………………………..9
E. Differentiation……………………………………………………………………………………..…....10
F. Branding………………………………………………………………………………………………………..10
G. Incentives for Supermarkets……………………………………...............................10
6. SERVICE LEARNING CHALLENGES…………………………………………………………………..11
7. RECOMMENDATIONS FOR FUTURE PROJECTS………………………………………...11

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1. EXECUTIVE SUMMARY
Atlantic City has a historic past of culture and entertainment. Throughout time,
millions of visitors have enjoyed the city as a quick getaway from their every-day lives.
Today, while the city continues to attract 26 million visitors per year, 40,000 local
residents struggle without access to a full-service supermarket. Atlantic City is a food
desert.
The rectification of this issue would improve the quality of life for residents, while
encouraging the development and infrastructure of the city as a whole. The purpose of
this study is to discuss which supermarket would best serve the population of Atlantic
City and a plan of action for all parties interested.
Atlantic City can offer supermarket chains a community that desperately needs
their goods. As the only one-stop-shop in the city and surrounding areas, the
supermarket would enjoy patronage of Absecon residents, as well as tourists and daily
commuters. Competition wise, Atlantic City has a large quantity of bodegas that offer a
limited selection of marked up goods. We believe that with the right plan, layout, and
management the chances that a supermarket will thrive are very high.
It is significant for investors to understand that they must cater to the population
in order to best serve the market. Similar cases have shown that supermarkets
succeed when focused on the needs of the community and use them as an outline for
the marketing strategy. Some challenges for a potential supermarket include: picking
the right location and determining the size and layout of the supermarket.
Through our research, we recommend that rather than having a large chain
supermarket, smaller chains, such as a PriceRite or C-Town, would suit the residents
and tourists alike. We believe that a successful supermarket would be smaller than
20,000 square feet as well as have multiple entrances to accommodate drivers and
pedestrians. The supermarket would provide the population with affordable store-brand
and brand name products, plus offer delivery services appropriate for the older and
disabled community.

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2. INTRODUCTION
FEMA Long Term Recovery has partnered with a service-learning team from a
Strategic Marketing class at Stockton University to conduct a supermarket feasibility
analysis for Atlantic City, New Jersey. Currently, the lack of a one-stop supermarket
creates tremendous adversity for local residents and city employees. These individuals
must rely on bodegas for access to food staples and supermarkets outside the city limits
for periodic grocery trips. This study aims to measure the feasibility of a supermarket in
Atlantic City and recommend a plan of action for all parties interested.
3. BACKGROUND
A. Geography
Atlantic City is located in southeast New Jersey, on the Absecon Island. It
borders Absecon, Brigantine, Pleasantville, Ventnor and West Atlantic City. The total
land area covers 10.75 square miles where approximately 2,624 acres are developable;
the remaining acreage consists of water and wetlands. The city offers a 3.4 mile long
sand beach, lined by a boardwalk. The layout of the city consists of a grid system with
an average size of 350 feet by 550 feet.
B. Wards
Atlantic City is subdivided into six
wards. The fifth ward is the most
populous and has more population density
per square mile. The fifth and sixth wards
have a larger white and Asian population
and feature a higher per capita income.
The lowest income levels can be seen in
the second ward.
C. Transportation
Fifty percent of the Atlantic City
population does not own a car. Most
residents use public services, walking or cycling as their transportation methods of
choice. New Jersey Transit offers 13 local, regional, and interstate bus routes that stop,
depart, or arrive in Atlantic City from a centrally located terminal at 1900 Atlantic
Avenue. The local routes serve the essential role of allowing city residents to reach
suburban destinations, plus gain access to employment, shopping, educational, and
medical locations within the region. An alternative to New Jersey Transit buses are 13
seat buses called Jitneys. These buses have four fixed routes throughout the city and
offer a cheap and convenient way for residents to travel.

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There is rail service available through New Jersey Transit that offers trips
between Philadelphia and Atlantic City, with stops at Absecon, Egg Harbor City,
Hammonton, Atco, Lindenwold and Cherry Hill. Greyhound provides longer distance
services for tourists and residents. Buses usually leave and depart Atlantic City from
the Atlantic Avenue Terminal. These buses are often the preferred way to visit the city
for tourists coming from New York City, Philadelphia, Baltimore, and Washington, D.C.
D. Demographics
Atlantic City’s population consists of 40,000 local year-round residents and
15,920 households. The average age is 36-years-old and 12.7% of the population
consists of senior citizens. The median household income is $26,000 per year. It is
estimated that 34.3% of the population live under the poverty level. The unemployment
rate is 12.4% and varies throughout the year. The fluctuation is due to the seasonal
leisure and hospitality industry, which employs 37.3% of the population. The population
density is 3,680 people per square mile.
E. Tourism
Atlantic City continues to be a tourist destination for many people despite recent
casino closings. It is estimated that 64% of visitors are between 30-years-old and 64-
years-old with an average annual income of $71,000. The typical Atlantic City visit
starts on a Friday and usually lasts 1-2 days.
F. Target Market
1. Primary market: Atlantic City Residents:
Most of the residents of Atlantic City are low-income families. These
families often have laid-off breadwinners, family members who earn low
wages or members who have seasonal or temporary jobs. As previously
stated, most residents do not own cars and use public transportation.
Residents would benefit from supermarkets that offer perishable groceries at
an affordable price.
2. Secondary Market: Tourists and Commuters
These two sectors of the market are sectioned together due to common
characteristics. Both tourists and commuters stay for short periods of time.
They will most likely visit the supermarket to pick up essentials, forgotten
items, or snacks. Since population trends fluctuate, it is hard to predict the
number of tourists and commuters that would patronize the store. Also, the
diverse incomes of this secondary market make it hard to cater to specific
needs.

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G. Future Plans for Atlantic City:
The future of Atlantic City looks bright. Within ten years, there are plans to
increase the population of Atlantic City by 10,000 residents. Atlantic City is working to
earn status as a sustainable city, ultimately making it more resilient against storms.
Diversification of the economy is the key towards a better future. A plan of action
includes the development of businesses other than casinos. With the increase of local
businesses comes new jobs; it is forecasted that the average annual income of locals
will increase from $30,000 to $50,000. New parks and housing developments will be
built to accommodate the projected increase of the population and make Atlantic City a
more attractive place to live.
4. SITUATION ANALYSIS
A. Competitive Landscape
The placement of a supermarket in Atlantic City would create competition with
bodegas; bodegas are small independently owned convenience stores that often mark
up the prices of the goods being sold. Bodega owners are known to shop at wholesale
retailers, break-up bulk purchases and sell per unit at a premium. These stores sell
ethnic foods and goods as well as snacks and food essentials.
Bodegas are also not conducive to a good neighborhood atmosphere, for they
have been described as “eyesores.” These stores have become meeting spots for
residents and often are linked to noise complaints and petty crime.

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Throughout the years, bodegas have thrived in Atlantic City by taking advantage
of low-income families who often have no other choice but to purchase their overpriced
goods. Atlantic City welcomes a full-service supermarket to allow competition for
bodegas; the intention of the city is to force the bodega owners to lower their prices.
Although some bodegas may not survive, it is predicted that bodegas that offer ethnic
goods and have a loyal following will continue to do well.
Currently, there is one supermarket in Atlantic City, located on 1501 Atlantic
Avenue, called Save-A-Lot supermarket. This supermarket was opened on May of
2012 and has been doing well in the area. It offers deals on store-brand items and
consists of 18,000 square feet. This supermarket employs armed security guards and
has a large amount of cameras in order to prevent theft. During the week, there is a
farmer’s market located on 1200 Atlantic Avenue. The farmers market offers a variety of
fruits, vegetables, baked goods and homemade crafts. Some farmers accept WIC and
Senior FMNP vouchers.
B. Food Desert
Food deserts are areas where at least 20% of families are at or below the federal
poverty line and where a third of the families are more than a mile away from a
supermarket, in urban areas, or 10 miles away in rural areas. Based on this, Atlantic
City can be defined as a food desert and is eligible for special plans, programs and
incentives. Save-A-Lot and the farmers’ markets have helped to slightly lower the
demand for discount groceries. However based on the above criteria, those who do not
fall within a mile of the Save-A-Lot’s radius still live in a food desert.
C. Tourist Destination Status
Contrary to popular belief, Atlantic City is not recognized by the New Jersey
Government as a tourist destination. Due to this, tourists cannot be counted as part of
the population when it comes to government issues. This affects the city in terms of
requesting funds for government related jobs, grants and activities. This issue also
skews many reports and research studies, as conclusions are reached by using the
local population and do not take into account the annual influx of tourists.
D. Perception of Crime:
Crime is not a threat to residents and tourists in Atlantic City. However, there is a
perception that Atlantic City is ridden with danger. This assumption is not supported by
actual data. For example, the total number of crimes in 1977 was 4,391. That number
rose to over 16,000 within ten years, fell to about 9,000 in 1999, and eventually
decreased to a little fewer than 3,000 in 2014.

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In the 1980s, the majority
of the crimes committed
were from petty larceny.
For instance, robberies
due to casino visitors
leaving doors unlocked.
Most of the perception
currently comes from a
lack of understanding.
Those who are unfamiliar
with “city-life” are quick to
judge the city as
dangerous because
residents hang out on
street corners. Atlantic
City not only has
improved its safety
precautions, but officials
are actively updating
technology as well as bringing in cameras, advanced police software, etc. The city
needs a public relations campaign - one that educates potential visitors about its current
offerings and safe environment.
E. Food Stamps
Much of Atlantic City’s local population uses food stamps in order to meet the
nutritional needs of their families. Supermarkets considering a location in Atlantic City
should be prepared to work with the government in ensuring that customers will be able
to use their SNAP and WIC benefits. In order to be eligible to provide consumers with
this service, supermarkets must sell food for home preparation, consumption sell on a
continuous basis, and offer three varieties of products within the following categories:
meat, poultry or fish, bread or cereal, vegetables or fruits or daily products. Another
method of qualification would be if more than half of the dollar amount in total retail
sales comes from the sale of eligible staple foods.
F. Cargo Transportation Routes
Atlantic City is located on an island connected to the mainland through a series of
bridges. In order to limit the amount of traffic in residential neighborhoods, tractor-trailer
crossings are allowed in three bridges: the Atlantic City Expressway Bridge, the Albany
Avenue Bridge, or the bridge located on Route 30

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F. SWOT Analysis
Strengths Weaknesses Opportunities Threats
Demand by local
residents
Not designated as a
tourist destination
by the state
Conditions are set for
a successful
supermarket should
the right strategy and
leadership be put in
place
Misperception of
crime
21 million adults
located within 120
miles of A.C.
Less than 50% of
residents have cars
Government
incentives (food
desert)
Negative perception
of Atlantic City by
outsiders
New mayor and
fresh vision
Fluctuating
population
throughout the year
Supermarket delivery,
unique layout,
innovative store
design.
Decreasing trends in
tourism
Affordable and
effective public
transportation
Police staffing
during busy
summer months
Investments in the
city will most likely
increase the
population in the near
future
Bodegas
Low Income Levels
G. Similar Cases
Currently, there is a Pathmark in Harlem that is successful. It opened in April of
1999 and was the first full-service supermarket in Harlem in three decades (Pristin,
1999). It has drawn 30,000 customers a week, stated Harvey Gutman, a Pathmark
spokesman (Pristin, 1999). Only about 10% of the customers arrive by car, Mr. Gutman
said, suggesting to the company that most come from Harlem or the Bronx (Pristin,
1999). Last year, Extell Development purchased the Pathmark in East Harlem; the
building, at 142-96 East 125th Street, is under a long-term lease with Pathmark and
includes approximately 300,000 square feet of residential air rights and over 450,000
total buildable square feet with inclusionary housing bonuses (Clarke, 2014). “The site
has been a valuable asset to East Harlem since it was developed in the 1990s and we
believe it will continue to benefit the community for many years to come” Victor Sozio, a
property representative, explained (Clarke, 2014).
In 2013, the Pathmark on Mount Ephraim Avenue in Camden New Jersey closed
(Terruso, 2014). A year later, a PriceRite was established in the same location;
PriceRite was the first supermarket to move into Camden in 40 years (Terruso, 2014).

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The store is owned by Ravitz Family Markets, a family-owned business in operation
since 1968, which also plans to open a ShopRite in 2016 on Admiral Wilson Boulevard
in Camden (Terruso, 2014). Jason Ravitz described the PriceRite store as “a hybrid of
Aldi and Costco, with low prices and bulk items” (Terruso, 2014). “Shoppers bring their
own bags or pay 10 cents a bag a cost, Ravitz said, that would go toward keeping
prices low” (Terruso, 2014). The opening of PriceRite also marked a change for
Camden residents who have lived in a food desert. The store hired about 100 full-time
and part-time workers, more than 70% of who were Camden residents (Terruso, 2014).
This lowered the city's unemployment rate, which is now about 17% (Terruso, 2014).
5. RECOMMENDATIONS
A. Store Layout
We recommend that the
supermarket be 20,000 square
feet or less. In order to
accommodate for pedestrians,
as well as drivers, the
supermarket should have two
entrances, one at street level
and another towards the back,
accessible via parking lot. We
suggest that the supermarket
be self-serve, with meats and
deli items, pre-cut and
packaged. Warm deli cases
should be put near each
checkout with hot, ready to go
items, like rotisserie chicken
and pasta.
The store should run on
a Just-In-Time inventory
system, stocking just enough to
meet demand without having to
use up store space for storage.
The supermarket should stock excess merchandise on top of its aisles, much like
Costco and Staples do. The backroom should be solely used for food preparation,
management offices and deli and meat slicing.
In order to keep the store secure, we suggest investing in an excellent security
system, equipped with high technology security cameras and theft detectors.
Additionally, we suggest having a locker system, where an employee behind a desk

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takes the customers’ bookbags and purses and places them in a cubby. The customer
then receives a number belonging to a cubby hole where the items were placed.
Customers should only be carrying their wallet inside the store. Once the purchase is
done, the customer simply returns the number and receives their belongings back.
There should be at least two armed guards, one at each door during all business hours,
and one night custodian.
B. Companies That We Suggest
Supermarkets chains, such as C-Town or PriceRite that have a history with
opening supermarkets in challenging areas should be approached. We recommend
that Atlantic City stay away from big corporate supermarket franchises, as these
organizations usually have many rules in place – those that do not allow for the
customization that Atlantic City’s market needs.
Private investors, entrepreneurs and small business owners should also be
contacted. The unique marketing challenge may be attractive to investors, and the
appeal of serving a community in need can help entrepreneurs get funding from banks.
C. Land Suggestion
We recommend that investors seek privately-owned land in a centralized location
near the Jitney route. We have heard of similar supermarkets that have been in
negotiations with community organizations for a long time, and the process has been
extremely slow. Opening a business is complicated enough; if the people of Atlantic
City are top priority, then they should not continue to suffer the consequences of a food
desert due to lengthy negotiations.
D. Marketing Strategies:
1. Finding the right investors:
In order to make the plans for a supermarket become reality, the right
investors must be reached and be fully on-board with customizing a supermarket
to fit Atlantic City. They must have an optimistic view of Atlantic City’s future and
be fully aware that the crime perception is false. In exchange, Atlantic City must
provide investors with the guarantee that the supermarket will be successful even
though there are those that have failed.
2. Marketing to the Primary Market
The new supermarket is going to enter the market at a time where there is
high demand. A small advertising campaign should be sufficient enough to
spread the knowledge that there is a new supermarket. Word of mouth plays a
big advertising role in communities like Atlantic City.

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During the first months to a year, a lot of attention must be called to the
services that the supermarket can provide for the community. For example, if the
supermarket delivers to seniors and handicapped individuals, then it should be
advertised throughout the weekly booklets.
E. Differentiation
Unlike bodegas, emphasis should be placed on the convenience aspect of the
one-stop-shop that the supermarket will become. It will provide customers with
affordable prices for both brand name and store-brand products. The supermarket will
have no frills, and will be simple to navigate.
F. Branding
Branding should focus on the fact that the supermarket is for the people of
Atlantic City. However if it already has an established reputation, then that status
should be used to earn the customers’ trust.
G. Incentives for New Supermarkets
The incentives to open a supermarket in Atlantic City should be fully explored
and promoted as it can help make the city more attractive to investors. It is important to
note that some of the grants and loans available require that the funds be distributed
through private, non-profit organizations.
The following grants, loans and tax credits are available to Supermarkets:
 Up to $125,000 in grant money from the New Jersey Food Access Initiative.
 39% of amount invested by Community Development Agencies towards new
businesses in low-income areas can be returned via tax credits -- CDFI Fund.
 Up to $90,000 grant from the Voices for Healthy Kids, if the supermarket partners
with a 501 c3 non-profit organization.
 Community Food Projects Competitive Grants Program is a private, non-profit
organization that can provide grants to cover up to 50% of costs of building and
establishing projects that will help increase food security in communities.
 The Reinvestment Fund, a non-profit organization, has funding and loans for
supermarkets opening up in food deserts.
 The following grants, loans and tax credits are available to new businesses of
Atlantic City.
 The New Jersey Economic Redevelopment and Growth Program provides up to
50% of the project cost.
 The Grow New Jersey Assistance Program provides employee tax credits for new
full-time employees.

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6. SERVICE LEARNING CHALLENGES
We encountered some challenges with our service learning project. First, our
team had a difficult time figuring out how to approach the project. FEMA had a vague
idea about putting a supermarket in Atlantic City. To overcome this challenge, we
decided to research similar cases of successful supermarkets in urban areas, such as
the Pathmark in East Harlem and the PriceRite in Camden. By finding this research, we
were able to decide what type of supermarket should be placed in Atlantic City and
which location would best suit the population. Second, the main problem our team
faced in working together was schedule conflicts. Despite this, our team worked
extremely well and each member did an equal amount of work.
7. RECOMMENDATIONS FOR FUTURE PROJECTS
We recommend having a new public relations campaign created to neutralize the
negative perceptions associated with Atlantic City, specifically aimed at crime. This
would be beneficial because a supermarket chain and other businesses will be more
willing to invest in the city if the actual amount of crime that occurs was publicized. The
misperception of crime could ultimately affect the willingness of future organizations to
migrate to Atlantic City. We also encourage finding a way to attain tourist destination
status, as this would give the city more capital to fund special projects. Lastly, we urge
the city to have more summer events and festivals to attract tourists and businesses, as
well as encourage residents to stay apart of the community.

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REFERENCES
Procida, L. (2011, October 2). Food Deserts in Towns Such as Atlantic City Leave Residents
Relying on Community Gardens. The Press of Atlantic City.
http://www.pressofatlanticcity.com/communities/atlantic-city_pleasantville_brigantine/food-
deserts-in-towns-such-as-atlantic-city-leave-residents/article_0ee87f26-ed39-11e0-80af-
001cc4c002e0.html
Casino Reinvestment Development Authority. (2012, February 1) Atlantic City Tourism
District Master Plan Volume 1
http://www.atlanticcitynj.com/!UserFiles/crda/TourismDistrictMasterPlanV1.pdf
Israel Posner & Stockton University. (2013, February) AC Visitor Profile Study.
https://intraweb.stockton.edu/eyos/business/content/docs/LIGHT/AC%20Visitor%20Prof
ile%20Study%20-%20Final%20for%20Website.pdf
City of Atlantic City (2008, September) Atlantic City Master Plan
http://www.cityofatlanticcity.org/docs/20120222151057-4.pdf
Supplemental Nutrition Assistance Program (2014, September 17) USDA Food and Nutrition
Servicehttp://www.fns.usda.gov/snap/how-accept-snap-benefits-your-store
Terruso, Julia (2014, October 17) Camden Gets a Supermarket. Phili.com
http://articles.philly.com/2014-10-17/news/55112667_1_north-camden-pricerite-camden-
counties
Clarke, Katherine (2014, April 16) Extell Makes Deal for Harlem Pathmark Official. The Real
Deal http://therealdeal.com/blog/2014/04/16/extell-makes-deal-for-harlem-pathmark-official/
Pristin, Terry (1999, November 13) Harlem's Pathmark Anchors a Commercial Revival on 125th
Street. The New York Times http://www.nytimes.com/1999/11/13/nyregion/harlem-s-pathmark-
anchors-a-commercial-revival-on-125th-street.html
A SPECIAL THANK YOU TO:
Mark Strohoefer FEMA Long Term Recovery
Thomas Fesen FEMA Long Term Recovery
Paul Perillo FEMA Long Term Recovery
Elizabeth Terenik City of Atlantic City
Frank Gilliam City of Atlantic City
Pamela Fields Main Street Atlantic City
Christina Bevilacqua Main Street Atlantic City
Professor Jennifer Barr

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