In the stark face of changing times, supermarkets are responding to emerging consumer habits with sophisticated store formats and creative new products and services. Phoenicia Specialty Foods in downtown Houston offers a prime example: a 28,000-square-foot, state-of-the-art market that opened its doors in November 2011 at the One Park Place luxury high-rise, across from Discovery Green Park. The market became downtown Houston’s first grocery store in more than 40 years.

Urban residents and workers now have a one-stop Yummy! shop stocked with all of the market’s signature food favorites. These include a sandwich station, salad bar, olive bar, espresso bar and a bakery with desserts and breads, prepared daily by European and Mediterranean chefs. The market also features a fresh pizza corner.

“The instore experience is always our focus,” said Ann-Marie Tcholkian, one of the owners of the family-owned business. “From there, everything evolves.”

The diversity that instores carry can translate into other realms, she added. The Houston grocer has turned its focus more on internal operations: product line and customer service.

“Definitely, people are looking for curbside delivery,” she said. “We are happy to be offering it at this time.”

Phoenicia Specialty Foods employs 125 to 150 staff, and the restaurant has another 40. The retailer never closed during the pandemic.

“It’s been challenging to find and retain the right workforce. At our core positions, we have kept our staff from pre-COVID days,” Tcholkian said. “We have a loyal and enthusiastic workforce. They help with our everyday decisions. They are on the ground floor with everybody. There is a willingness to work as a team of people.”

Origins of a specialty grocer

Phoenicia Specialty Foods is a dream that started modestly in 1983. Arpi and Zohrab Tcholakian, formerly of Lebanon, and of Armenian descent, opened Phoenicia Deli, a 2,500 square foot, Mediterranean-style delicatessen and grocery, on Westheimer Road in Houston. Zohrab convinced Arpi that it would be best for them to pursue their passion for food and not wait for the layoffs that awaited those in Zohrab’s engineering profession during the collapse of the oil industry in the 1980s.

Zohrab as a child enjoyed working in his father’s corner grocery store in Lebanon. The business came very natural to them, and despite the economic downturn of the 1980s, the Tcholakians were determined and created a loyal following. Phoenicia Deli still flourishes as a restaurant just across the street from where it once originated and is now called Arpi’s Phoenicia Deli after the matriarch of the family.

In 1992, Phoenicia Deli leased a space to store the many imported goods they were receiving. Soon, retail and wholesale customers started going to the storage space for a case of their desired, hard to find specialty items, and eventually this grocery storage space became a specialty foods market.

In 2006 Phoenicia Specialty Foods was born, a 55,000-square-foot international food market that sat across the street from the deli. The enterprise has continued to grow ever since, and has tripled in size, thanks to loyal foodie friends.

“We are still very much at the core a family business with owners who are very involved, but with a different set of growing pains and scale,” Tcholkian said. “Our specialization in the food of the Middle East, Mediterranean, European and Eastern European regions helped sustain us. My parents, founding owners from the beginning, wanted to make sure we were not too specialized and also not too overreaching that we lost our strength, which was staying true to this niche and serving food we grew up with and that were part of our roots. Also, we amplified our ability to find ways to produce hard to find or labor-intensive foods.”

For instance, the market is equipped with three conveyor belts that transport freshly baked pita and flatbreads from the market’s mezzanine bakery to customers on the ground floor.

Much of Phoenicia’s success has been due to importing power that has kept prices reasonable for patrons. Everyday Phoenicia improves because of a commitment to hear customer requests. Also, Phoenicia prides itself on producing sought after gourmet foods in-house, with freshness and quality in mind.

The grocer specializes in pita breads and flatbreads that they produce (including items like Tanour, Palestinian Bread, Iraqi Bread, Pita Puffs, Armenian Madnakash “Pulled bread”, Zaatar Bread, Feta Cheese Bread, Akawai Cheese Bread and Lahmajun Flatbread).   They also make at least 30 kinds of Middle East baklava and pastries, as well as European style baked goods and bakery staples. They make four types of hand rolled grape leaves and cabbage leaves.

“We make labor intensive and tasty Lebanese style Kibe, in balls and flat sheet pans, with the option to eat fresh in the market or frozen to bake at home,” she said. “Other labor-intensive items we produce from our chef’s kitchen include Pasticcio Greek Lasagna, Eggplant Parmesan, Mideast Meat, Cheese and Veggie pies, Spanakopita and Tyropita. My guess is that we make at least 15 different kinds of feta, and the seven or so we have by the pound in brine in the deli case is always refreshing to breathe in.”

The retailer features their own in-house yogurts, lebnis, Shanklish cheese (dry cured spice crusted feta), Taramasalata, Basterma and the like, and so many prepared food options from hummus, couscous, pomegranate salmon to harissa wings.

Phoenicia Foods Downtown features MKT BAR, an in-house gastro-pub that accommodates as many as 260 guests. This hip, urban hangout is the perfect stop before the theater, after a sporting event, or just to enjoy a tasty night out. See MKTBAR.COM for the nightly music schedule and more. Phoenicia Foods Downtown is a unique destination for Houstonians, foodies and visitors alike (with the convenience of a complimentary, onsite-parking garage). In addition, catering and delivery is available for downtown neighbors.

Among many honors, Phoenicia Specialty Foods has been named one of the Top 10 Food Markets in the United States by Saveur magazine, and My Table magazine has named Phoenicia Best Grocery Store. Samantha Brown, travel host, has mentioned Phoenicia in her PBS show Places to Love.

Concepts that match needs

“Our Westheimer Road location caters to more of the family shopper – with big shopping carts looking for lots of ingredients,” Tcholkian explains. “At this downtown location, we offer a lot of both, including a lot of prepared foods. We expanded the line and got creative. People felt comfortable coming here. We weren’t getting the same lunch traffic as before because people were wanting to take food home.”

In response, the grocer created lots of ready-to-go salad packages and snack boxes. One creative example is a snack box featuring honey pepper goat cheese, salami, and Muhammara red pepper dip. “That was something new. They do really well,” she said. “Everybody can get their own little snack box. People like the idea of gifting these delicious gourmet packages. We love helping people celebrate.”

Every day they walk in the door, “We ask ourselves, ‘How can we be better?’ We want to set an example of how we can do this differently.”

For one, you definitely have to listen to customers. That’s why Phoenicia Specialty Foods has never stopped exploring new ideas. They offer Greek lasagna, cannoli, kabobs with rice, shrimp with pesto, meals that can be shared.

Listening to people, the grocer has learned shoppers want a more relaxed environment and more familiarity. They want healthier options.

“We brought back our salad bar and olive bar. People are thrilled.”

In the deli, they added a lot of deli prepared meals that occupy about 10 feet more of display space. This is something they are keeping. It makes sense for the changing lifestyles of their customers.

The Phoenicia brand

“Our brand is known for its established importing power and extending those benefits and economies of scale to our customers,” Tcholkian said. “If you walk through our Westheimer location you will see aisles of 4-story pallet racks of imported goods that are sold in our stores and also distributed wholesale to primarily the southwest region of the United States. If you walk through our olive oil aisle you will see reasonably priced items because of our importing strategies. We do our best to keep pricing reasonable and down to earth, and the products more staples on the dinner table, versus out of reach gourmet.”

In addition, the grocer focuses on sprinkles of creativity and character (like how things are named or posters suggesting seasonal kids cooking classes offered), displays, and product mix, which also play an important factor in making it an experience for customers.

Instrumental in their grocery was the ability to change the store footprint from a large 100,000-square-foot market location to a 26,000 square-foot market location when the opportunity presented itself, and sister restaurants that extend the name and experience.

The freshness, variety, novelty, hard to find factor, and quality makes the market an experience for customers.

“We have always worked hard to make the store an experience. That is still our main marketing tool, natural word of mouth,” she said. “Social media and a friendly effective website are our other focuses. We participate and donate to nonprofit events and needs in the community.”

E-commerce and online marketing are essential pieces of the program.

“COVID gave us time to create an ecommerce website that is more automated than what we used to offer,” Tcholkian said. “We have created platforms for our grocery side of the business as well as for the restaurant side of the business. This was definitely something we needed to do regardless of COVID but the habits COVID created have also made the need for these platforms very necessary.”

Looking forward, company goals are “differentiating ourselves always” and figuring out how the grocer can make its urban market thrive more, even when only less than one-third of the workers are working in physical offices in downtown.

“We will explore the idea of creating satellite locations to establish a presence in other Houston neighborhoods.”