Lion-Sized Holes When Grocers Close

When Food Lion shuttered 113 stores earlier this year, the move left workers without jobs and communities all across the country with huge holes in shopping centers.

In the Charleston area, the closures add to a handful of already empty grocery storefronts, and many in the real estate and development industry publicly worry that those holes may take some time to fill.

Empty grocery stores “are a challenge for a lot of communities," said Summerville Director of Planning and Economic Development Madelyn Robinson. "It can be cheaper to build from the ground up.”

And once one grocer fails in a particular location, others are less likely to take a chance there.

"Because traffic patterns have changed, they do not have the drive-by traffic they used to," Robinson said. "Those shopping centers just start to fade away, because they don’t have the customer base anymore."

REVERBERATING IMPACT
Food Lion, finding itself pushed out of many markets when Walmart entered the food-store business, took roughly 5,000 jobs nationwide with its closures. That’s a big dent in an already struggling economy, but the closures may have residual impacts on small businesses located in shopping centers formerly anchored by Food Lion stores.

“It’s going to be hard without all the foot traffic,” said Mike Palmer, who owns Tour Tennis in the Belle Station Shopping Center in Mount Pleasant. “We think we’ll be just fine because we’re a specialty shop that pulls in customers anyway, but it could be hard on a lot of the smaller stores out here.”

GOLDILOCKS EFFECT
Grocery stores aren't the only buildings with limited uses. Sofa Super Store also plans to shutter its two remaining stores in Charleston. Both are large storefronts that may be hard to fill because of their limited applications.

Like grocery stores, which typically occupy about 30,000 square feet, the furniture stores are too big for many retailers and too small for big-box stores.

While many businesses find the stores unappealing, some are willing to take a chance.

Consign Charleston recently moved into a 27,000-square-foot space in West Ashley that has housed a Food Lion and, most recently, a Sofa Super Store.

"We were looking to expand," said owner Seana Flynn. "Our first store in Columbia is 36,000-square-feet. We didn't want to go that big though. We were looking for about 15,000-square-feet."

But there aren't many 15,000-square-foot commercial locations in the Charleston area, says Flynn.

"If you bumped it up to 20,000-square-feet-plus, there's a lot of options," she said.

Ultimately, Consign went with the larger space, because of the location and to support the community.

"The plaza was falling to two-thirds empty with Sofa Super Store leaving, I didn't want to see that," Flynn said. "I really didn't want to see the community around the plaza suffer."

LIMITED USES

While large buildings are desirable for manufacturing or warehousing, grocery stores often don't have the heavy-duty flooring needed for manufacturing or the loading docks needed for warehousing, said Dorchester County Economic Development Director Jon Baggett.

Dorchester saw some success converting grocery stores into call centers in the late 1990s and early 2000s. Grocery stores are, after all, spacious with lots of parking spaces, he said.

IQOR in Dorchester County is housed in an old grocery store building. Baggett called that a "success story.” But that market has dried up in recent years.

"We used to have pretty good luck with the call center type things moving in those spaces, but we haven't seen that many call centers lately," Baggett said.

Owners of the former Food Lion shopping center on St. James Avenue in Goose Creek had to get creative in their search for a tenant after more than five years on the market.

Broker Charles Carmody said the sticking point had been finding a tenant happy with the location — the shopping center is hidden behind a restaurant and a bank.

"We exhausted the grocery stores and went looking for other uses," he said. A Mt. Pleasant-based self-storage company is now looking to develop the site for storage units and limited office space.

HOPEFUL OUTLOOK
Still, there’s some hope that when the economy improves, some other retailer – perhaps another grocer – will find the property attractive, said Mount Pleasant Mayor Billy Swails.

“I think it was a problem specific to Food Lion. They just had a hard time competing in Mount Pleasant and a lot of other communities,” Swails said. “We have several grocery stores that have moved here in recent years, and they are doing great business.”

Even with the two recent Food Lion closures joining an already closed Food Lion store, Mount Pleasant still has 14 grocery stores. That’s a ratio of about  5,000 customers per store.

“Mount Pleasant is a desirable place for a lot of businesses,” Swails said. “We’re not writing those stores off. We think we’ll fill them.”