Uwajimaya to open fourth store on June 29

Uwajimaya will open its fourth store June 29, flexing financial muscle at a time when much of the retail industry is on its knees.

The new Asian grocery, which used to be the Renton Village Thriftway, is costing about $4 million to remodel, including the addition of fresh seafood tanks that hold 600 gallons of water and a pricey painting of a red dragon circling the store on a high wall.

The dragon "is a symbol in every store," said Uwajimaya CEO Tomoko Moriguchi Matsuno. "It's equal to a Ferrari in price."

Most retailers are not in spending mode during a recession that has been brutal for the job market and consumers' pocketbooks. Many are slashing stores, and big names like Eddie Bauer, Circuit City and Linen 'n' Things have filed for bankruptcy or closed altogether.

Even some grocery stores, which have picked up business from the beleaguered restaurant industry, are suffering. Safeway reported a 25 percent drop in first-quarter profit, and Costco's profit slumped 29 percent during its most recent quarter.

But others groceries are faring better, particularly with discounts and generic branded items.

Cincinnati-based Kroger, which owns QFC and Fred Meyer, saw fourth-quarter profit rise 8 percent, driven partly by record-high sales of its corporate brands. Its next earnings report is due Tuesday.

Family-owned Grocery Outlet of Berkeley, Calif., says transactions are up 20 percent from a year ago. Its profit margin, which is usually below the 2 to 5 percent range of regular groceries, has inched into that territory, said Vice President of Marketing Melissa Porter.

Grocers that can afford it are expanding and remodeling now, hoping to keep customer loyalty and dollars when the economy rebounds.

Grocery Outlet will open four or five stores this year, the same as usual.

Bellingham-based Haggen completed the $6 million remodel of its Olympia Top Food & Drug store late last year.

And Uwajimaya is looking for a bigger, better location for its Bellevue store, then wants to open something farther north, Matsuno said.

The economic downturn has not brought a break on labor or materials, she said, but she likes the Renton location and figures that sales from new stores will help leverage fixed costs such as advertising.

Tom Phillips, a veteran of grocery-interior work who is in charge of the Renton store's design and remodel, says he often does more grocery-store design work when the economy sinks.

His company, Phillips Enterprises, now has 27 grocery projects from Alaska to Hawaii to Santa Fe, N.M.

"I don't want people to think the grocery business is making a ton of money, because that's not the case," Phillips said. "But the independents (who he works for) know if they don't stay current, the chain operators are going to gobble them up."

He accompanied Matsuno on a walk around the new Renton store early this week, focusing on the big things (the soon-to-arrive fresh seafood tanks) and the details (what to put on the narrow shelves of one refrigerator case).

Lone cans of coconut milk and single boxes of matcha green tea stand on shelves, showing stockers where they should place each product when it arrives.

At the end of the walk, Matsuno turned to face the middle of the 27,000-square-foot space and exclaimed, "This is great!"

— Melissa Allison

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Retail Report appears Fridays. Melissa Allison covers the food and beverage industry. She can be reached at 206-464-3312 or mallison@seattletimes.com. Amy Martinez covers goods, services and online retail. She can be reached at 206-464-2923 or amartinez@seattletimes.com.