Update: How Did Richmond Become the Epicenter of Grocery Wars?

Posted on by John W. Anderson in Commercial Real Estate, RVA Grocery and Delivery Wars

In my previous post (available here), I discussed the abundance of active players in Richmond's hot grocery market. As expected, the activity has continued to boom. Food World recently reported that Richmond's local grocery market hit $3.67 billion.

  • Florida-based and employee-owned Publix has stated that it is "looking aggressively to grow in the Richmond area and elsewhere in Virginia." It is planning to open a store in the Nuckols Place shopping center in Glen Allen, and it is in lease discussions related to a second store in the Stuart's Crossing shopping center at Virginia Center Parkway.[1]In addition, Publix has been mentioned as a potential buyer of the 19 Martin's stores for sale as a result of a merger between the parent companies of Martin's (Royal Ahold) and Food Lion (Delhaize). As a condition of the merger, the Federal Trade Commission will likely require the disposal of overlapping stores.
  • As previously reported, Martin's announced the closing of three underperforming stores. The closing dates were recently released: South Crater Road in Petersburg will close on July 16; Bell Creek Road in Mechanicsville will close on July 23; and Stony Point Road in Richmond will close on July 30. This reduction in square footage will result in a loss of its market share.
  • New York-based Wegmans made its official debut in the Richmond market on May 22 with the opening of the Stonehenge Village store in Midlothian. An estimated 24,000 people came to the store on its opening day, making it one of the company's largest openings. Its second Richmond store is planned to open in the West Broad Marketplace shopping center in Short Pump on August 7. Both stores will feature a restaurant and will offer an extensive prepared food selection.
  • A new player on the scene, Jim's Local Market, is planning to open a supermarket in Richmond's Church Hill North neighborhood at the corner of Nine Mile Road and North 25th Street. This area has been identified as a "food desert."
  • German "no-frills" grocery chain, Lidl, is planning to open a store in the former Colonial Downs building on West Broad Street. This store will be the grocer's sixth planned store in Richmond.
  • North Carolina-based gourmet grocer, Southern Season, formerly located in the Libbie Mill development on Staples Mill Road, closed on April 24, 2016, after less than two years in business in Richmond.
  • Wal-Mart recently rolled out an online grocery ordering service to three of its Richmond stores: Bell Creek Road in Hanover; Sheila Lane in South Richmond; and the Walmart Neighborhood Market at Ironbridge Road. Customers can conveniently pick up their pre-ordered groceries at these stores. As previously reported, Kroger also recently released a similar online ordering tool.
  • Wal-Mart also added four Neighborhood Market (grocery only) stores to its offerings in 2015, with an additional two stores in 2016. As a result, for the first time, Wal-Mart overtook Martin's as the region's number 1 grocery retailer based on sales, as reported in Food World last week. Kroger moved to the number 2 slot, while Martin's fell to number 3 and Food Lion dropped to number 4.

The Richmond market currently offers shoppers over 400 locations to purchase groceries, and the number of locations continues to grow. In a recent Richmond Times-Dispatcharticle, Tammie Smith noted that Richmond's grocery market also experienced rapid change 20 years ago. Of the stores that entered the market at that time, only Food Lion remains today. It will be interesting to see how a new generation of shoppers will shape Richmond's grocery industry over the next 20 years!

Stay tuned for more updates!

[1] Update: As of July 7, 2016, reports indicate that Publix is no longer planning to open a store in the Stuart's Crossing shopping center near Virginia Center Commons.

About the Author

John W. Anderson is a commercial real estate attorney who represents Virginia businesses and individuals. He assists his clients with a variety of commercial real estate matters and transactions (lender counsel, purchases, sales, leasing, tax-deferred exchanges, and development, as well as providing counsel regarding compliance with access provisions of the Americans with Disabilities Act), tax-deferred exchanges, and general corporate and business advice, including entity formation.

Spotts Fain publications are provided as an educational service and are not meant to be and should not be construed as legal advice. Readers with particular needs on specific issues should retain the services of competent counsel.