Supermarket chains give city 2nd look

Giant, Safeway, Save-A-Lot plan expansions here

Mayor actively woos them

It's hard to find sites big enough for stores to become profitable

September 09, 2001|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Several big supermarket chains say they are eyeing Baltimore with renewed interest as city officials make an aggressive push to bring more grocery stores to the city.

Safeway Inc. expects to build at least one new store in the city in the next couple of years.

Giant Food Inc. hopes to decide as early as this fall where to build another city supermarket.

And St. Louis-based Save-A-Lot, with its limited assortment, low-priced format, plans to open six to 10 stores in the area - some in the city - in the next 12 to 24 months.

The chains, all of which already have stores in the city, say their biggest challenges in urban areas are finding and negotiating for sites.

Safeway and Giant, for instance, typically build stores as large as 60,000 square feet and have been forced to close smaller, outdated stores that became unprofitable.

But several of the chains say the city's effort to replace supermarkets that have closed within the past year is helping to pave the way for new development

Giant, which is planning three or four inner-city stores in Washington, has turned its attention to Baltimore as well. The chain - the region's largest - opened its last store in the city on Edmondson Avenue two years ago.

Giant officials met with Mayor Martin O'Malley about two months ago, after which he assigned members of his staff to continue meeting and to dig up neighborhood demographic information to help identify sites.

"This is an attitude we had not seen before," in both Baltimore and Washington, said Barry F. Scher, Giant's vice president of public affairs. "We have two very responsive new mayors that have rolled out the welcome mat to the food retailers. We are aggressively pursuing sites. We see a lot of revitalized development going on, with residential, and we want to be present."

But, he added, "It's very difficult to do it on our own with developers - not impossible - but you need a partnership from the mayor because of all the red tape that's often prevalent with inner-city food store developments."

City officials have been calling on and meeting with supermarket executives, scouring neighborhoods for sites, doing demographic research for the chains and leading tours of vacant supermarkets and land.

Most of the work has been in response to supermarket closings, including those of two Super Fresh stores in Cedarcroft and Bolton Hill, and eight Super Pride Markets, which closed last year when that independent chain went out of business.

"We would like to see many of these closed stores occupied," as well as to interest companies in sites where new development could occur, such as in Sandtown, and replacements for vacant Super Prides, such as in Park Heights, said Kevin Malachi, director of commercial revitalization for the city's Department of Housing and Community Development. "We're trying to cover all the areas where we see a need. We have made it easy to do business in the city."

Besides meeting with Giant, Safeway and Save-A-Lot, the city has been in talks with Trader Joe's, Shoppers Food Warehouse, Stop Shop & Save and Mars, the area's largest independent chain, now mainly in Baltimore County. Even Super Fresh, which has closed some of its smaller stores, is still considered a potential player here, Malachi said.

"We've had positive conversations with every chain we've talked with," Malachi said.

For Save-A-Lot, a subsidiary of Minneapolis-based Supervalu Inc., Baltimore is an under-served market. The company - the 15th-largest U.S. retail grocery chain with $4 billion in annual sales - has five stores in the city, but will expand its presence.

"We have found city officials to be receptive and willing to work very diligently in bringing grocery stores to neighborhoods," said Dan Kimack, a spokesman.

The chain has identified more than a dozen communities as candidates and hopes to begin pinpointing specific sites within the next two to three months. Its first new store, announced Tuesday, will be at the site of a Food King in Govans that closed Aug. 14. The new Save-A-Lot should open by late November to mid-December.

And Safeway, too, has included Baltimore in its expansion plans. Though it has always built stores in the suburbs and urban areas, urban development has become more difficult as the average store size has grown to sometimes twice the size of older stores.

Still, Safeway has built three of its newer, larger stores in the city over the past several years, including stores in Canton, Charles Village and Waltherson.

"Generally, developing urban stores has a longer set of challenges than building elsewhere," said Greg TenEyck, a spokesman for Safeway's Eastern division. "It's difficult to put together the assemblage of property."

The chain has been in talks with city officials. "We would hope to open at least one new store in the city over the next few years," TenEyck said.

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