Grocery stores in prime Dallas-area neighborhoods usually don’t stay closed for long, so why have stores in Uptown, Lakewood, North Dallas and Lake Highlands sat unused for months?
A dozen former Albertsons and Tom Thumb stores were sold in early 2015 to RLS Supermarkets as part of the antitrust review of Albertsons’ acquisition of Tom Thumb’s parent company, Safeway. Several of these vacant locations have since been sold, in some cases more than once, and are waiting for some TLC.
Developers and grocers say there are many reasons their plans have been delayed — from permits to customers moving on to competitors. But first, let’s look at all the sites still waiting to be restocked, and who’s looking to do it.
- H-E-B’s Central Market owns two Dallas locations — in Uptown at Lemmon and McKinney avenues and on West Northwest Highway and Midway Road — that it plans to open as Central Markets, but the sites have stayed empty longer than expected.
- A week ago, a Sun Fresh Market in North Dallas on Arapaho Road that had held on the longest, closed. Bill Davidson, general manager of RLS Supermarkets,, said the store’s business had declined since a Wal-Mart Supercenter opened nearby about a year ago.
- Stores on Forest Lane and Midway in Dallas and in Bedford that had become Sun Fresh Markets closed and reopened as Fiesta Marts. Both just closed again. Fiesta closed Forest Lane on May 27 and Bedford on Aug. 3.
- Two vacant stores in desirable Dallas neighborhoods of Lakewood and Lake Highlands won’t stay empty, but it’s not clear yet how those spaces will be reinvented.
Central Markets delayed
H-E-B’s Dallas-based Central Market division has been actively working on the 45,000-square-foot Midway and West Northwest Highway store. While the retailer originally said that store would reopen as a Central Market this fall, the date has been pushed back to next spring.
One reason for the delay has been to gain more space from tenants relocating in the shopping center to allow for a new service that Central Market will be adding to all its stores: curbside pickup for online orders.
H-E-B is in the process of adding pickup areas for online orders throughout Texas at both the H-E-B and Central Market chains.
Central Market sees that store as serving customers from Bluffview, Devonshire, Preston Hollow and other neighborhoods west of the Dallas North Tollway, said Stephen Butt, president of Central Market.
“We are encouraged by the enthusiastic response from our surrounding neighbors, and we anticipate opening our doors by spring 2018,” Butt said in an emailed response.
Central Market at Lovers Lane and Greenville Avenue is also working on city permits to add curbside service, said Jackson Mabrie, H-E-B Central Market spokeswoman in Dallas.
The Uptown location at Lemmon and McKinney has no opening date yet and here’s why:
The land under the Uptown store that Central Market purchased is owned by a limited partnership that also owns the land under the Walgreens across the street. The properties are managed by a Florida company that didn’t return a request for comment. However, Butt addressed the process.
“Though very early in the development phase, Central Market is exploring options with our landlord for the best use of this choice location,” Butt said. “We are taking time to design a Central Market that will showcase a fantastic customer experience.”
Butt called the Uptown location “a rare opportunity to combine a great shopping experience like Central Market with such a powerful retail location.” He said the company is committed to the Uptown location “bringing the most exciting food journey” to Dallas, but it’s going to take more time.
A Whole Foods Market opened in Uptown in 2015 with apartments above it. A Tom Thumb is under construction in Uptown in a high-rise office and residential building called The Union that will open in 2018 or 2019.
Central Market has one more location that it still owns. It owns the former Minyard Sun Fresh Market and convenience store with gas pumps in Lake Highland’s Northlake Shopping Center but has no current plans to use it. The store is for sale, Jackson said.
In July, Dallas-based Westdale sold Northlake to Steve Gregory and Matt Malouf of Dallas-based Malouf Interests.
“It’s a great location with great schools and all these new young families have moved in,” Gregory said. “We hope something good moves into that building, but on the strength of the neighborhood we think it’s a great investment.
In Lakewood, Northwood Investments purchased the store on the southeast corner of Mockingbird Lane and Abrams Road from Lincoln Properties in April. Lincoln owned it a short time and had purchased it from Central Market, which purchased it from Sun Fresh. Northwood, which owns The Shops at Park Lane, also purchased Hillside Village across the street in February.
Ward Kampf, president of Northwood Retail, said that the corner is “underserved” and that he’s looking at several prospects, including a grocery.
“That box is very active,” Kampf said, and a strategy is being put together. He added that grocery isn’t the slam-dunk it’s been, partly because of shoppers now fast adopting online shopping, even for food.
Real estate trends
For decades, grocery-anchored neighborhood shopping centers have been some of the strongest and dependable kinds of retail real estate investments. They still are, experts say, but the industry is watching online grocery shopping, even though most people still prefer to buy perishables in stores.
Adam Howells, managing director in JLL’s Dallas office, said the company recently examined the risk that investors see when looking at retail real estate.
Despite grocery’s stable reputation, the volume of grocery-anchored shopping center transactions nationwide fell by 31 percent in the first half of this year, according to a JLL report released this month.
“Dallas-Fort Worth is such a vibrant, growing market and one of the most vibrant in the country,” Howells said. “So we’re always going to keep seeing grocery expansion.”
He called out Central Market and H-E-B, WinCo Foods and German grocer Lidl, which opened its first U.S. stores on the East Coast this year and has purchased parcels in North Texas, among those that will continue to build stores in North Texas.
But even before the Amazon.com purchase of Austin-based Whole Foods, the grocery business has been changing right before our eyes similar to all of retailing, Howells said.
Landlords of neighborhood centers are looking at prospective tenants differently.
“No one wanted the pizza parlor or the gyms,” Howells said. “Now things have changed, and those are good tenants for driving traffic to the center, including moms.”
|The divested dozen|
|Two and a half years ago, 12 supermarkets were sold as part of the Albertsons acquisition of Tom Thumb’s parent company Safeway. The local dozen were among 168 locations sold after a government antitrust review. A few of the stores are still in flux. Here’s what happened to those stores:|
|Albertsons stores that became Minyard Sun Fresh Markets in February 2015||What happened next||Current status|
|3630 Forest Lane, Dallas 75234||Sold to Fiesta Mart in July 2016; closed in May||Vacant and for sale|
|6464 E. Mockingbird Lane, Dallas 75214||H-E-B Central Market sold it to Lincoln Property in November 2016; Northwood Investors bought in April||Vacant, but Northwood said several plans are under consideration|
|4349 W. Northwest Highway, Dallas 75220||Sold to H-E-B in August 2016; closed that fall||Vacant and under construction to reopen as Central Market|
|3524 McKinney Ave., Dallas 75204||Sold to H-E-B in August 2016; closed that fall||Vacant and awaiting redevelopment plan from land owner, which will include a Central Market|
|10203 E. Northwest Highway, Dallas 75238||Sold to H-E-B in August 2016; closed that fall||Vacant and for sale|
|7007 Arapaho Road, Dallas 75248||Closed in August 2017||Vacant and for sale|
|1108 N. Highway 377, Roanoke 76262||Closed in fall 2016||Vacant and for sale|
|8505 Lakeview Parkway, Rowlett 75088||Closed in December 2015||Vacant and marketed by JLL as a 63,000-square-foot store that can be broken up into smaller spaces.|
|Tom Thumb stores that became Minyard Sun Fresh Markets in February 2015|
|3300 Harwood Road, Bedford 76021||Sold to Fiesta Mart in July 2016; closed in August||Vacant and for sale|
|4000 William D. Tate Ave., Grapevine 76051||Sold to H-E-B, then sold to Albertsons-Tom Thumb in 2016||Reopened in May 2017 as Tom Thumb|
|4836 W. Park Blvd., Plano 75093||Sold to Kroger in December 2015||Reopened in 2016 as Kroger|
|3001 Hardin Blvd., McKinney 75070||Sold to H-E-B , then sold to Albertsons-Tom Thumb in 2016||Reopened in May 2017 as Tom Thumb|
|SOURCES: The companies; Dallas Morning News research|