Specialty Foods Stores Will Go Head-to-Head at Union Square

Trader Joe's, the chain of grocery stores known for discounted, high-end specialty foods, plans to open its New York City flagship store near Union Square, blocks away from a three-story, 48,000-square-foot Whole Foods store scheduled to open March 16.

The exact location of the new Trader Joe's remains unknown, though managers from Trader Joe's stores in the metropolitan area said the Monrovia, Calif., company is in negotiations to lease space from New York University.

A company spokeswoman would not comment, as a lease has not been concluded. "There is no done deal," the spokeswoman, Pat St. John, said. "We never talk about any particular location until we have a signed lease."

Managers at Trader Joe's at Long Island, who spoke on condition their names be withheld, have been told to expect a Manhattan store by this fall.

The arrival of the grocery-store chain adds to the growing number of brand name supermarkets clustering around the square and along 14th Street, which has become a magnet for food since the city launched its biweekly farmers market in 1976. The Greenmarket has become a New York City institution, widely credited for helping to rejuvenate the neighborhood.

Besides Trader Joe's and the soon-to-open Whole Foods, other supermarket chain outlets on 14th Street include Gristedes, Garden of Eden, and Food Emporium. This spring, Balducci's, another upscale market, plans to open a 20,000-square-foot store in the former New York Savings Bank at the corner of 14th Street and Eighth Avenue.

"I think there is room for everyone in the neighborhood," a marketing coordinator for Whole Foods, Angela Rakis, said.

Whole Foods, the largest seller of organic produce in the country, also plans to open a store in 2006 in the Gowanus neighborhood in Brooklyn.

News of Trader Joe's prospective arrival whetted the appetite of its loyal fans, such as Bob Plummer, who had been following rumors of the chain's possible arrival in Manhattan on the Web site chowhound.com. Mr. Plummer, who is from a suburb of Chicago, said he has been hankering for a particularly inexpensive form of truffle oil carried by Trader Joe's.

Standing outside Garden of Eden yesterday around lunchtime, Mr. Plummer also said: "I'm a huge McCann's Instant Oatmeal fan and, at Trader Joe's, it's about half the price of all the other stores around here. So if they opened around here, that'd be great."

Yesterday at Garden of Eden, Mc-Cann's Instant Oatmeal, maple sugar flavored, cost $4.75 for 15 ounces.

For those unfamiliar with Trader Joe's, such as another shopper, Jodi Frieman, certain criteria so important to those who live in Manhattan must first be met. "If it delivers, it's fine," Ms. Frieden said.

Standing with her lunch from the Garden of Eden salad bar in hand, Ms. Frieden, who works at Union Square but lives at the Upper East Side, said: "It's not about the money, it's about convenience. If it has a lunch bar, a salad bar, fine."

For deliveries, Ms. Frieden might be better off choosing FreshDirect, the online supermarket that delivers and is already trying to stave off competition from Whole Foods.

In the past 10 days, FreshDirect's "guerrilla marketers" have targeted pedestrians in front of the Whole Foods Union Square store, which is located on 14th Street across from the park, handing out flyers comparing their prices to those of Whole Foods, which has thrifty detractors who call it "Whole Paycheck."

A spokeswoman for FreshDirect, Dana Smith, said the flyers were a preemptive strike. "They are a key player in the market," Ms. Smith said of Whole Foods. "We're trying to hold our own in preparation for their opening."

The chief operating officer of Garrick-Aug, a firm specializing in retail leasing, said the neighborhood, commercially and residentially, is now one of the city's most vibrant, active seven days a week with those who work, live, and play there. The key, the executive, Peter Botsaris, said, is density.

"The density is so enormous that there are enough people to go around," Mr. Botsaris said. "In New York City, the competition is fierce, but they all seem to thrive because of the density."

Given the competition and the potential market, which includes NYU dorms for upperclassmen, managers at Trader Joe's stores in the region said the Manhattan flagship will carry one item that will be unique among the chain's other nine stores in the state: wine.

In 2002,Trader Joe's made headlines when it began selling Charles Shaw's Chardonnay, Cabernet Sauvignon, and Merlot for as little as $1.99 a bottle. The exclusive deal with a Ceres, Calif., wine distributor, the Bronco Wine Company, exemplified the grocer's ability to acquire bulk quantities of high-end specialty foods and repackage the goods under the Trader Joe's brand as Trader Joe's Soy and Flaxseed Tortilla Chips or Trader Giotto's Pizza Bagels, and then sell them at low prices.

While Trader Joe's does offer organic and locally grown food, the company is less known for its fruits and vegetables. That is an area Whole Foods has dominated, much to the encouragement of those who promote the Greenmarket.

"Our feeling is there are and should be lots of models for locally grown: Trader Joe's, Whole Foods, roadside stands," the executive director of the Council on the Environment of New York City, Lys McLaughlin, said. Ms. McLaughlin's agency helps run the Greenmarket.

"To the extent these stores buy locally, it raises all boats," she said.