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REAL ESTATE


Supermarket supremacy


Grocery sector is ‘on fire’ with new players vying for sites and the right demographics


by Gary Robertson


‘Very competitive’ So, why is the grocery store


sector so hot? Connie Nielsen, a senior vice


president and veteran retail broker with Richmond-based Cushman & Wakefield|Thalhimer, says, “I don’t know that it’s necessarily a war,” but it is competitive. “Very competitive.” The Richmond market got


Wegmans has opened two stores in the Richmond region, one in Midlothian (shown in photo) and one in Short Pump.


W On the Web


CRE Intel, a free e-newsletter that publishes on Mondays, provides a statewide look at major real estate deals around Virginia. To register, visit


VirginiaBusiness.com


ant a grocery store with a restaurant and a wine bar — got it, at least at


some Wegmans. Want someone to carry


groceries to your car — got it, at newly arriving Publix stores. Want a small, no-frills, dash-in


kind of store — got it, at stores such as Lidl and Aldi. New grocery brands and


variations on old brands are moving like a wave across much of Virginia. There are so many players


that it’s getting hard to keep them straight. Some of the newcomers: Aldi, Lidl and Publix. Wegmans also is entering new markets. As for the tried and true:


there’s Wal-Mart, Kroger and Kroger Market Place, Whole Foods, Food Lion, Trader Joe’s, The Fresh


64 JANUARY 2017


Market and independents. In other words, a lot of stores


are vying for the grocery dollar, although not necessarily for the same customers. Some of the higher-end stores are purposely targeting high-income areas. Whatever the demographic, activity is robust, with grocery stores becoming the go-to anchor for new mixed-use developments. The Richmond region is


ground zero for much of the activity. Jeff Metzger, publisher of Food World, a trade publication that follows the supermarket industry in the mid-Atlantic, says Richmond will be the only place in the country where Wegmans and Publix will compete head-to-head, although Raleigh, N.C., will face that scenario in a couple of years.


a jolt in July when Florida-based Publix announced it was buying 10 store locations from Martin’s. The fate of Martin’s nine other stores that were not part of the Publix sale remains uncertain, although the grocer has indicated that it does not plan to stick around if a buyer or buyers cannot be found. The store sales were necessary


to satisfy federal regulators so that the Dutch retailer Royal Ahold NV, which operates Martin’s, can combine with the Belgian Delhaize Group, which owns Food Lion and Hannaford. Nielsen brokered the deal for


Wegmans, one of the best known high-end grocery brands, and found two sites in Richmond. Wegmans has one of the largest average footprints in the industry with some stores ranging to 140,000 square feet or more. According to Nielsen, every


grocer is looking for the niche location that best suits its brand, traffic requirements, customer base and operating style. In Richmond, Wegmans located in two of the highest income ZIP codes in the region.


Photo by Adrienne R. Watson


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