FLORENCE, Ky. — The Kroger on Mall Road is gearing up for its newest Marketplace store to open its doors, but just on the other side of Florence Square, sits its older counterpart—soon to be locking up for good.
The two Kroger stores bookend the Square, and with a grand opening slated for April 17, the old store, which opened in 1977, makes way for the new with nearly 100,000 more square feet more of aisles, groceries and other goodies.
Marketplace stores add home decor, baby items, kitchen supplies and much larger gourmet counters and expanded cosmetic sections to its produce and dry good aisles. And the Florence store is just one of several new expanded stores planned for the region this year.
So what happens to those old stores that served their communities for, in some cases, decades?
Shiny And New: When One Door Closes Another Opens
Since 2004, Kroger has spent $325 million on 13 new Marketplace stores in the Cincinnati, Northern Kentucky and Dayton, Ohio markets. The grocer has also spent $66 million on 20 remodels in the past five years. Each new Marketplace store runs about $25 million; each remodel about $5 million, said Jennifer Lien, a customer communications specialist for Kroger.
In the past year, grand re-openings for remodeled non-Marketplace stores included:
- Hartwell on Vine Street
- Queen City
“[It’s] an investment into the community… always reinventing in our stores,” Lien said, including creating at least 200 new jobs for each Marketplace that opens.
“They want bigger stores, more variety, more services—to get that, we need more square footage,” she said.
More than a dozen new Marketplace stores have opened in Tri-State, several taking the place of existing, smaller Kroger stores.
In fact, most new Marketplace stores are built directly next to, sometimes adjoining, the current or recently closed older Kroger store, or in some instances is no more than a half-mile away.
But sometimes those non-Marketplace locations have remain closed, collecting dust, including two in Amelia, one in Lebanon and one Mt. Orab, which has sat vacant for four years.
Formerly a Thiftway grocery store, the vacant west Amelia Kroger, at 1260 W. Ohio Pike, is currently for lease, but not by Kroger, as that lease expired. The east Amelia store, located at 1783 E. Ohio Pike, is owned by Kroger and is for sale.
While the smaller stores, often referred to as ‘box’ stores, are on average 50,000 square feet, they are not always easily leased.
There are several variables that contribute to an ongoing vacancy in commercial real estate, said Steven Miller, a partner with Viking Partners real estate firm in Cincinnati, which specializes in commercial real estate.
Some commercial real estate, like Kroger’s box stores, are not easily sold or leased based on location, size and the business looking for space’s criteria.
“Kroger draws from a tighter radius—they are a community-oriented grocer,” Miller said.
Frequent shoppers and convenience drive Kroger’s volume. Those who may lease a smaller box store next to the newer Marketplace, may not fit that same criteria and therefore would not reap the benefits of a thriving neighborhood grocer next door.
The size of the box store can complicate things, too. It’s expensive to subdivide a store and to renovate, Miller said.
Mt. Orab's rural location makes it a tricky, he said.
And in some cases, leaving a store vacant is cheaper for an owner — rather than investing in upgrades in order to lease or sell the property. But, that, too, comes with “its own set of problems,” he said. Building deterioration, heating and air conditioning costs and thieves who steal copper impact the value.
But really it comes down to the basic economic tenet of supply and demand.
“When there’s no demand, there’s no value,” Miller said.
PHOTO: An empty cart sits in front of a 'dead' Kroger store, where right next door is a Marketplace opened in 2006. No one has leased the older, Kroger-owned 66,846 square-foot box store. Jessica Noll | WCPO
But Lien said, Kroger isn’t losing money on old stores they own.
“It’s something we’re willing to take a loss on because a Marketplace will serve the community better,” Lien said.
A local commercial real estate broker agreed.
“I wouldn’t call it losing money. They are opportunity costs,” Chris Hodge, a broker for CB Richard Ellis Commercial Real Estate Services, in Cincinnati, said.
Hodge, who works on some of Kroger’s real estate ventures and leasing properties, said it could be difficult to secure new tenants for some locations based on demographics. On average, he said it takes between 12-18 months to lease out an old Kroger store, which is generally under $10 per square foot.
The older the store, the cheaper the lease, he said.
Some stores do get new life breathed into them.
They can be split up, redesigned for multiple tenants and re-purposed into retail stores, or storefronts holding religious organizations, medical practices or a small corporation, Hodge said of stores he has worked on in the past.
The 56,409 square-foot Kroger in Harrison, on Harrison Avenue, which opened in 1990, was closed in 2010 when their Marketplace counterpoint opened in the shopping center adjacent to it, where it could expand and add a gas station.
Kroger leased that property. The store is home to a Goody’s clothing store and is currently renovating the other half for a Dunham’s Sports.
Similarly, in 2006, the first Marketplace store opened at 7300 Yankee Road, in Middletown, shutting the doors at its smaller store at 7172 Cincinnati-Dayton Road, which opened just six years earlier.
The 55,883 square-foot, Kroger-owned store, just a half-mile down the road, was converted into an indoor entertainment center called, The Web Extreme Entertainment, located in the Liberty Towne Center.
Up Next On The Conveyor Belt
The current 66,000-square-feet Kroger on US 42 in Union, Ky. which opened in 1997 can no longer “provide the variety of merchandise and services that Union resident are requesting,” Kroger stated in its project description for rezoning residential land within the city.
The grocer wants to more than double the size of its current store. And like most old-new Kroger duos, the current Kroger is 1/8 of a mile from the proposed site.
The new development—a Marketplace just eight miles from the new Florence location—if approved, would include:
- 135,976 square-foot Marketplace
- 9,820 square feet for non-public use
- 8,000 square-foot liquor store
- 12,000 square feet of building area for offices
- 730 parking spaces
- 9 gas pumps at fuel center
While the Boone County Planning Commission and many nearby residents are against the rezoning and construction in the current-residentially zoned locale, the store may be on the docket soon enough.
The planning commission recommended denial of Kroger’s application at its Feb. 5 business meeting, however, the city of Union held a hearing on April 3, and passed the first reading of the ordinance, overturning the planning commission’s recommendation, Todd Morgan, Boone County Planning Commission’s senior planner of zoning services, said.
The city voted, again in favor of the rezoning, during its second reading of the ordinance Monday night—approving the map amendment and development plan.
The city's attorney, Gregg Voss said if no one files an opposition, the city will proceed with rezoning and the Kroger Marketplace will be built.
Oakley Store To Be Largest In Nation
Kroger's Oakley Marketplace store will be its largest yet. At 154,000 square feet, it will include a clothing department—a first for Kroger. Currently, the Centerville Marketplace store, which opened in 2011 at 1095 S. Main St., is the largest store at 147,000 square-feet. On average Marketplace stores are 123,000 square feet, Lien said.
Kroger plans to break ground this summer in Oakley, with the store slated to open in early spring 2015. It will be the 14th Marketplace store to open in the region.
But Kroger isn’t calling it quits on building new, smaller box stores, either. Last year, the grocery chain built the 24-hour, 97,000 square-foot Austin Landing store in Miamisburg, Ohio, for $15 million. It opened in January 2013, employing approximately 300 employees.
“Marketplaces don’t work everywhere… there’s just not enough room,” Lien said.