Grocery stores are coveted anchors for strip malls, but no developer would woo one unless he thought the store would succeed, says a Chicago retail consultant. And success depends on the dollars available in the area and the competition.
Neil Z. Stern, a senior partner with McMillanDoolittle, is familiar with strip centers like the one of Kirchoff Road in Rolling Meadows where a Dominick’s store has been vacant for almost nine years. The center’s new owner, Clark Street Development, has announced a grocery store called Uncle Joe’s Tuscan Market will anchor the mall.
The fact Dominick’s closed has to be taken into consideration when judging the store’s chance of success, but things have changed in nine years, said Stern. There is a Jewel across Kirchoff Road, but that chain does not offer the same type competition it did a number of years ago, he added.
“There used to be two chains in Chicago — Dominick’s and Jewel,” Stern said. “Now there are Trader Joe’s and Whole Foods and Mariano’s and a number of discounters and strong independents.”
Super Valu, Inc. sold Jewel-Osco to an investor group, with the sale scheduled to close next month. A spokesman for the buyers said personnel and operations will be examined.
“We understand it’s a very competitive industry,” said Karen May, a spokeswoman for Jewel-Osco, “but right now for Jewel-Osco it’s business as usual and we will continue to do everything on our end to serve our customers no matter what happens with the vacant property across the street.”
Other retailers like to be near grocery stores because the average customer visits the grocer 70 times a year, said Stern.
Fritz Duda, an executive with the shopping center owner Clark Street Development, said his company worked with a consultant to identify sites where grocery stores would succeed before acquiring the Rolling Meadows site through foreclosure.
Although Rolling Meadows expects an economic boost from the new grocery store and other possible additions to the long struggling shopping center, Stern warned that retail development is not a panacea.
“If you’re trying to grow retail in your town, you might be taking away from an other town. as opposed to getting people to spend more money,” he said. “They are not getting the easy growth of 20 to 30 years ago when population and the suburbs were growing. Retail is very selective. It’s tougher to get quality retail today. It will get tougher because the economy still isn’t recovered and online is taking a lot of the future growth.”Copyright © 2013 Paddock Publications, Inc. All rights reserved.