The closures of Circuit City and Linens ‘n Things have created more than 1,000 vacant big-box stores around the country and have prompted big-name grocers, such as Pleasanton, Calif.-based Safeway, to consider taking over the sprawling spaces. To wit, Safeway has filed paperwork to move into a former Linens ‘n Things and CompUSA in Towson, a Baltimore suburb.
It seems like a natural fit: A big store takes over a big space without having to build an entirely new location. City governments, worried about blight, also like seeing stable grocery retailers move into vacant big boxes. However, making this move isn’t always the best option for retailers, says David Livingston, a Waukesha, Wis.-based supermarket consultant.
“It’s not always cheaper to take over an existing building,” Livingston says. “Grocers require quite a bit of plumbing. Circuit City wasn’t built to handle refrigerated cases and would require a lot of retrofitting.”
Even if the retailer scores an excellent deal on the vacant big box and has to do only minimal retrofitting, small interior spaces and limited parking lots can pose issues for mass chains. Livingston also warns that although big boxes tend to be in highly trafficked areas with a high average per-capita income, retailers should remember that the former occupant went out of business at that location, so market studies are essential before moving to any new area. He advises grocers to consider building new stores, or leasing before taking over a big box location.