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2017-07-19 / Featured / Real Estate

Who will fill Chesterfield’s shuttered Martin’s stores?

BY RICH GRISET STAFF WRITER


The Martin's grocery store near Chesterfield Towne Center closed July 10. 
ASH DANIEL The Martin's grocery store near Chesterfield Towne Center closed July 10. ASH DANIEL As the winners and losers are still being determined in the ongoing Richmond grocery war, Chesterfield has lost at least one battle.

Last July, Florida-based grocery chain Publix announced that it would buy 10 local Martin’s Food Markets, only one of which is located in Chesterfield, on Hull Street Road in the Harbour Pointe Village shopping center. The remainder of Chesterfield’s Martin’s stores have either closed, or will close on Aug. 2. The closures mark the end of an era for some Chesterfield residents who have shopped at the same grocery store location for decades, first under the Ukrop’s banner, then Martin’s after the Richmond-based Ukrop’s was purchased in 2010.

Brian Glass, senior vice president of retail brokerage for Colliers International, says Publix’ bypassing of the county has to do with the location, size and footprint of the Martin’s stores. For the amount that it would cost to convert the Charter Colony location that opened in 2014, for instance, Glass says Publix could build their own building. The Charter Colony location was the only store Martin’s built from scratch in the Richmond market.

“They would have to gut the inside of the store,” Glass says. “They’d be better off building a store from the ground up.”

So what will become of these empty stores that anchor shopping strips around the county?

Glass says it may be tough to replace the empty Martin’s storefronts with other grocers. The remaining stores are likely the wrong size and shape for recent newcomers Publix, Aldi and Lidl. If strip mall landlords are determined to keep a grocery store as part of their tenant mix, Glass says they may have to go with nontraditional grocers like an international market or a discount grocer like Midlothian Turnpike’s Fresh To Frozen.

“The point is, it’s going to be a very, very one-off kind of situation,” Glass says.

Jim Ashby, senior vice president of brokerage and head of retail services with Cushman & Wakefield/Thalhimer, says these storefronts have a variety of future possibilities. As an example, Ashby mentions that the Stony Point location in south Richmond is courting a range of potential tenants.

“We have interest from gym uses, grocery uses, thrift stores, you name it,” says Ashby, who is serving as the leasing agent for nine Martin’s locations in the Richmond area. “Our hope is that we’ll backfill that box with a grocery store.”

While Ashby says he can’t comment on ongoing discussions to fill the remaining Martin’s spaces, he’s recently fielded “significant” interest from potential tenants. And just because a former Martin’s storefront is empty doesn’t mean the landlord is hurting. Depending on the terms and length of each leasing agreement, Martin’s may be paying rent for years to come, lessening the demand for landlords to fill empty anchors. Martin’s may be trying to find subtenants for their spaces, but landlords can often veto replacements if they don’t like the tenant.

“As real estate brokers and landlords, our goal is to find the right tenant, and find a tenant that’s not only going to add value to the existing tenant mix, but also the overall community as well,” Ashby says. “Typically in leasing situations, the landlord does have some approval rights in terms of who the tenants can sublease space to.”

While Publix may have only taken over one existing space in the county, Garrett Hart, director of the Chesterfield Economic Development Authority, says there are plans in the works for Publix to open multiple stores in Chesterfield built from the ground up. Overall, Hart says retail is strong in Chesterfield, and that entertainment tenants are a possibility to replace these old Martin’s stores. “We don’t have any specific replacement ideas in the entertainment industry for any specific Martin’s location, but we do see interest for that type of activity in the county,” Hart says. “We see strong retail pressure right now all over the county, particularly in the grocery market. I’m very expectant that we can get the facilities reused.”

Whatever happens to the old Martin’s stores, the ongoing grocery war promises a continued shakeup of the local retail landscape. The first of 12 planned Richmond-area Publix stores opened in Henrico this past weekend. Wegmans opened its first Chesterfield location in May, and Aldi and now Lidl are rapidly joining the market. Perhaps feeling the pressure of other chains, Kroger recently scrapped plans to build new stores in Colonial Heights and Mechanicsville.

“A lot of grocers in the market are in a hold pattern to see what impact the opening of the new Publix stores will have on the entire grocery market,” Ashby says. “Folks are just kind of waiting to see how all of these grocers … will perform in the market with all of the competition that is out there.”

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