LOWER MACUNGIE TWP., Pa. — Lehigh County Executive Phil Armstrong said there’s been a push to get Trader Joe’s to the area, but the effort hasn’t yielded the desired results thus far.
“The Lehigh Valley Economic Development Corporation has tried," Armstrong said in a recent email. "There is a lot of competition in this area.”
But Trader Joe’s isn’t afraid of competition, experts say, and if residents get their wish, it won’t be long until the most in-demand grocery store in the country comes to the Lehigh Valley.
- Industry analysts say they're surprised Trader Joe's hasn't opened a store in the Lehigh Valley
- Residents see the proposed Lehigh Valley Town Center in Lower Macungie Township as an option
- Experts say there's an upside to a grocery chain retrofitting an existing building instead of building brand new
While the company is notoriously tight-lipped about its operations — and won’t comment on where, when or if it might open new locations — fans have clamored for a ‘TJ’s’ in the area for years.
Word of the Lehigh Valley Town Center spread out of public hearings, and it remains in the very early planning stages before the Lower Macungie Township Planning Commission.
But people are hopeful that enough customer feedback and the size and scope of the project could sway Trader Joe’s to sign on, especially with a spot for a mid-size grocery anchor already included in the plan.
The California-based chain currently operates a handful of stores in the Philadelphia area, and last March opened a location in Camp Hill, a small borough in Cumberland County just west of Harrisburg.
It’s that latest store — near the interchange of Routes 11/15 and 581, but in an area not typical for a Trader Joe’s store — that has raised anticipation in this area.
But in Lower Macungie — and in much of the Lehigh Valley — a Trader Joe’s would have an abundance of retailers at its doorstep, including Aldi, Giant, Grocery Outlet, Costco, Target, Walmart, Weis, Wegmans and Whole Foods.
Does it matter?
Finding the ‘right’ location
There is nothing comparable in the Lehigh Valley to what the proposed Lehigh Valley Town Center would look like if approved.
In that regard, no other store currently has the setting the unnamed “gourmet grocer” potentially would get if and when it moves into Building 9 — a one-story, 15,000-square-foot space off a reconfigured roadway entrance from Route 222.
The proposed campus surrounding it includes 375 apartment units, 135,000 square feet of office space, a 60,000-square-foot hotel with at least 100 rooms and nearly 145,000 square feet of retail space.
Other potential anchors — alongside a proposed Topgolf sports entertainment complex — include a performance venue, along with an aquarium or nature center.
Lehigh Valley Town Center by LehighValley Newsdotcom on Scribd
In public meetings, township Community Development Director Nathan Jones described the project as “unlike anything else we've seen here in the Valley or potentially the state."
Within a three-mile radius is a population of nearly 60,000 residents, with an average household income of $122,196. The daytime population within three miles, including those commuting in for work, is estimated to be nearly 75,000 strong.
But finding just the right location for a new store is a process that takes careful consideration, said Bob Gorland, vice president of Matthew P. Casey & Associates, which specializes in supermarket feasibility studies.
Neighborhood demographics are just one part of the puzzle, and other factors that will be heavily scrutinized include population, visibility, accessibility and more.
But Gorland said Trader Joe’s would place an emphasis on something even greater if it were considering opening in the area — staffing.
“Every management person, unless somebody wants to transfer or drive, let's say from Montgomery County or Delaware County or Philadelphia, you know, it could be tough for staffing a store from scratch,” Gorland said.
“It's not like they have other people that are close by because there aren't any stores that are close.”
Trader Joe’s places a strong emphasis on its crew (those running registers, stocking shelves and interacting with customers), mates (supervisors) and captains (store managers), and putting that team in place an hour from its nearest location could be a challenge, Gorland said.
“They would be virtually starting from scratch with trying to staff a store," he said. "And so it's easier, in that regard, to add a store in suburban Philadelphia, where you have the people that work already in place versus, ‘Oh, you want a promotion, you've got to drive an hour or move' to the Lehigh Valley."
The logistics of it all
Gorland said Trader Joe’s has a regional draw, meaning people will drive from outside of the area to shop there.
It’s something Lehigh Valley residents trekking to North Wales in Montgomery County know all too well in a quest for store favorites such as Everything But the Bagel seasoning and Hold the Cone! mini ice cream cones.
“It really is a regional drawn destination type of retailer,” Gorland said. “But [375 apartments], or potentially less than 1,000 people, if you're talking about apartments or condos, that's not going to make or break … it's never going to make or break a supermarket company's decision to go there."
"It's just not enough potential. If it could be only $10,000 or $15,000 a week in sales, it's not enough. It does nothing to the sales forecast.”
Instead, Gorland said population density will come into play anywhere a Trader Joe’s might open. That’s one plus for Lower Macungie Township, which is the Lehigh Valley’s third-most-populous municipality, while Upper Macungie Township was the biggest gainer in the last Census with a 32% growth rate.
Another checkmark is proximity to a warehouse for distribution, with Trader Joe’s already moving products from a repository on Silver Crest Road in East Allen Township, near Nazareth.
According to its website, the company also uses TAGG Logistics on Schoeneck Road in Macungie to move its branded, specialty products to stores.
For comparison, Gorland looked to Aldi’s proximity to its distribution center in Upper Saucon Township as a reason it's been so aggressive in opening stores across the Lehigh Valley.
The German discount grocery chain soon will open its ninth area location at the site of a former Kmart space at Bethlehem Plaza on Route 191, across from Bethlehem Square (which includes a Walmart, Home Depot and more).
Last year, Aldi announced plans to renovate and expand its Upper Saucon facility with a 60,000-square-foot addition to better serve the stores it supports. It bumped the total square footage to 575,000 and included the installation of more coolers, new docks and more.
By comparison, Blue Rock Construction, a privately held firm with offices in Allentown, took an existing 132,800-square-foot processing and packaging facility and turned it into a cold storage warehouse for Trader Joe’s more than a decade ago.
Within the facility at the border of Lower Nazareth Township are various cold storage environments and a large flex warehouse space, but less is known about the current size and capabilities of the facility today as it serves Trader Joe's stores from Boston to Washington, D.C.
But given the setup, Gorland believes it’s not a question of if, but when, Trader Joe’s will open a Lehigh Valley store.
Other industry experts agree.
“Trader Joe’s has always been tight-lipped about their real estate strategy,” said retail analyst Jeff Green, a partner of Hoffman Strategy Group, a boutique, national real estate advisory firm.
“They have so many inquiries from developers throughout the United States they want to keep everyone guessing. That being said, I am really surprised they have never gone forward in the ABE market."
“I always thought they might consider the area around the Promenade at Saucon Valley, or near the Whole Foods at Highway 222 and Krocks Road. They tend to want to locate near Whole Foods.”
Green said some centers have both retailers co-mingling, which sounds strange, but it works.
“Both chains have realized that there is tremendous cross-shopping between the two stores,” he said.
“For example, you can get a great selection of organic fruits and vegetables at Whole Foods that you can’t get at TJ’s. But TJ’s has great private-label products not available at Whole Foods. It took years for the two of them to realize that they were complementary, not competitive.”
Gorland said he also believes the expansion of other stores in the Lehigh Valley isn't a detriment to Trader Joe's, and the expansion of stores such as Grocery Outlet face their own challenges, such as making sure consumers are aware of and understand product offerings.
Grocery Outlet currently has three Lehigh Valley locations — two in Allentown and one in the Easton area.
"It took years for the two of them to realize that they were complementary, not competitive.”Retail analyst Jeff Green on Trader Joe's and Whole Foods
A new build or a fixer-upper?
Experts say more companies are retrofitting existing buildings in lieu of traditional build-to-suit developments, and believe Trader Joe’s eventual entry into the area may follow that pattern.
“There could be an existing site in another area [outside of Lower Macungie] where they think, ‘Hey, this has good access, visibility, etcetera,’” Gorland said.
The line of thinking follows a period where market conditions and continued supply chain disruptions have to be factored in. The lead times on materials, for instance, are making the construction of new buildings or building expansions more challenging.
In addition, choosing to retrofit an existing space rather than build a new one allows companies to operate sooner, perhaps by six months or more.
And with a configured timeline and proximity to population centers driving many decisions, Gorland said owners who choose to retrofit have the potential to prioritize both schedule and location.
“To me, unless Trader Joe’s chooses the location … and they’ve done this in many places where they take over an existing building of some sort … a new-from-the ground-up development, such as the one you’re talking about [in Lower Macungie] could take many years to come to fruition.”
Gorland saw that play out in Camp Hill, noting the timeline “from rumor to opening” probably stretched nearly five years.
“So it’s more than just the population," he said. "It’s all of these things that I’ve talked about, including access, visibility and also the deal itself."
"It’s really the art of the deal, and if they want a 25-year lease and they say, ‘No, we want a 50-year lease,' then all of those things could change it overnight."
“Or they’re asking, ‘Should we mess around with these people for three to five years or should we just find another location and go into an existing space?'"
"You’ve seen that happen all over. You’ve seen that happen here with the Grocery Outlet. You’ve seen the conventional supermarkets like Giant and Weis go in existing spaces that became available.”
But even in an area Gorland sees as “pretty well stored,” he’s shocked Trader Joe’s hasn’t opened its doors here — yet.
“Yes, I'm particularly surprised at this junction that we have not heard of Trader Joe's in the Lehigh Valley, or that anything has come of that to date. There’s a lot of people that want them.”
