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One Wegmans opened in Chesterfield


County’s Midlothian area, which has an average annual household income of $122,000 within a three-mile radius, according to Nielsen. The other Wegmans is in Henrico


County’s Short Pump area where the annual household income averages $124,000. Those figures compare with the median income for the Richmond metro area of $60,713, according to the Census Bureau’s latest annual American Community survey.


The Publix push Meanwhile, Publix has aggressive


expansion plans for Virginia. Opening soon will be a 50,000-square-foot store in Nuckols Place in Henrico County. This will be Publix’s first store in the region, and it is the anchor tenant in the 90,000-square-foot development. The growth of Publix in Richmond


is part of its ongoing rollout of stores in the Southeast, and future announcements about other store locations in Virginia will be forthcoming, says spokeswoman Kim Reynolds. “What we hang our hat on is providing


premier customer service. We try to treat our customers like ‘kings and queens,’” she says, employing a phrase often used by Publix’s founder. According to Reynolds, customers can


expect to be offered complimentary carryout of their bags to their cars and to be recognized by store associates when they arrive for shopping. “We’re the largest employee-owned


supermarket in the nation. Our associates are company owners, and they realize that how they do their jobs every day affects them and their families. It’s motivation to go above and beyond,” Reynolds says.


Lidl and Aldi On the other end of the spectrum,


discount grocer Lidl is developing a $125 million regional headquarters and distribution center in Spotsylvania County, and Aldi has announced plans for building a $57 million distribution center and division headquarters in Dinwiddie County. Lidl and Aldi, both based in Germany, are fierce competitors in Europe. Aldi has 32 stores in Virginia and plans


to have 60 by 2021. A spokesman for Lidl says its first U.S. stores will be open no later than 2018. “To date in Virginia, we have announced two facilities and at least 700


jobs — our U.S. headquarters in Arlington County as well as a regional headquarters and distribution center in Spotsylvania County. Our announced investment in these two facilities is more than $200 million,” says Lidl spokesman William Harwood. Lidl is expanding into Virginia, he adds,


because the company thinks it will be a great option for shoppers. It currently operates 10,000 stores in 27 countries.


Northern Virginia’s allure In Northern Virginia, Greg Ferrante, a


real estate and development executive with JLL (formerly Jones Lang LaSalle), says the grocery market is on fire with Wegmans, Whole Foods, Lidl and the anticipated arrival of Publix, which is eyeing the region as a potential market. Ferrante noted that many retailers


are continuing to converge on the Northern Virginia-D.C. area because of its disproportionate number of high-income residents. The three richest counties in America


are all in the Virginia suburbs near D.C., according to Census Bureau data. Falls Church — an independent city that the Census counts as a county — leads the pack, with a median household income of $125,635, followed by Loudoun and Fairfax counties. Yet even with all that wealth, Ferrante


says there may not be enough business to sustain every grocer that wants a share of the market. “I think there are a lot of grocery stores that will go out of business, the weaker ones. They’re squeezing a balloon. They’re going to be stealing from each other,” Ferrante says.


Whenever a well-known grocery brand


comes into a community, that move can have repercussions far beyond its geographic boundaries, Ferrante adds. For instance, he pointed to the recent opening of a Wegmans in Charlottesville. “By locating in the Charlottesville market, it will draw from 30 miles,” he says, and could impact other grocers and shopping trends throughout the region.


Ready-made items Tom Dunn, a JLL vice president of retail


brokerage based in Hampton Roads, says that one of the biggest trends he’s seeing in the grocery store market has been in response to customers wanting to have ready-made


www.VirginiaBusiness.com


items that they can carry from the store to the dinner table. “Gone are the days of people walking


to a grocery store and planning their meals. More people are eating out more, and grocery stores are changing their model to a larger selection of fast foods” including natural foods, Dunn says. Last year was the first time that


restaurant sales outpaced grocery sales in the U.S., he adds, in part because millennials are reshaping shopping patterns to fit their fast- paced lifestyles. “It’s a cultural shift in buying patterns,” Dunn says. Dunn, who splits his time between


Hampton Roads and Richmond, has only exclamation points to describe what he’s seeing in the grocery market. “I’ve never seen the level of activity that we’re seeing now. A plethora of players has landed. It’s pretty unprecedented.” When a major grocer can’t find the


space it wants, it creates its own space, Dunn says, pointing to what Kroger did in Hampton Roads when it purchased an existing shopping center and reshaped it to accommodate a sprawling 125,000-square- foot Kroger Marketplace. Susan Jones, a senior vice president


with Colliers International in Richmond and director of its retail brokerage, says Aldi did something similar in Richmond on a much smaller scale. Last year, the company acquired a former steak house and remodeled it for the first of what will be four locations in the Richmond area. Aldi recently announced that it would also build on a former church site in Virginia Beach. “As more and more grocers enter the market, sites have been harder to find. You have to get creative and still be right with your demographics” Jones says. For commercial brokers, Jones says, the


arrival of new grocers is more than welcome. “It’s money in the bank with new players, if we can find good sites and put developers and grocers together,” she says. Metzger of Food World says that, like


Richmond, nearly every metro area in the country is “overstored,” as saturated markets are strained even further. In Richmond, he believes Food Lion is particularly vulnerable. His prediction for the future of the


grocery store market over the next five years: “Nationally and in Richmond, there will be a thinning out of the herd.”


VIRGINIA BUSINESS 65


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