Grocery stores in Northern Virginia
Print this page by Gary Robertson Wegmans has opened two stores in the Richmond
region, one in Midlothian and one in Short Pump.
Photo by Adrienne R. Watson
Want 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 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.
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 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.
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.