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The Question: Which Retailers Aren’t Opening In North Texas?

North Texas 2013

by Terrie Ellerbee/associate editor

From Amazon to Trader Joe’s to WinCo Foods, along with home state natives Brookshire Grocery Co., H-E-B, United Supermarkets and Whole Foods Market, a bevy of retailers have got it bad for north Texas. They are opening stores, sure, but also distribution centers, one to make good on a promise and others to boost their expansion in the region.

Texans will recall that Amazon.com and the state’s comptroller’s office had a tiff back in 2011, when the latter sent the Seattle-based online retailer a $269 million bill for state sales taxes it had not collected from 2004-09. Amazon got mad and closed its distribution center in Irving, blaming an “unfavorable regulatory climate.”

But they made up last spring and settled once Amazon.com agreed to start collecting Texas sales taxes on July 1 and to make $200 million in capital investments in the state.

The Irving distribution center did not reopen, but Amazon.com has confirmed plans to build two new ones in north Texas—one in Coppell and the other in Alliance Texas. Together the two distribution facilities will cover more than 2 million s.f. A third will be built near San Antonio.

Meanwhile, Irving may soon get a specialty grocery retailer to fill an existing distribution center: Trader Joe’s. The Dallas Business Journal reports that it is a possibility. Trader Joe’s Dallas-Fort Worth expansion is well under way. It opened its first store in the state at 2701 S. Hulen S. in Fort Worth last spring.

Ground will be broken in March on a mixed-used project in north Dallas that will be anchored by a Trader Joe’s, The Dallas Morning News reports. That store and another under construction in Greenville will be the first Dallas-area locations for the grocer, which has its U.S. headquarters in California. Trader Joe’s stores are already open in Plano and Fort Worth. Another is planned near Highland Park at Knox Street and Cole Avenue.

Meanwhile, anytime H-E-B requests rezoning, rumors fly that the San Antonio-based grocer soon will open a new store. That’s what happened when three acres at 4211 E. Rosedale St. and Miller Avenue in Fort Worth were rezoned in early February, according to the Fort Worth Star-Telegram. There is the potential, the company says, of a 55,000-s.f. grocery store coming to the site in a new shopping center to be called Rosedale Marketplace. But H-E-B’s spokeswoman Leslie Sweet told the newspaper that “it’s way too early in the game” to know whether a store will actually be built at the site, or which concept would be most likely to fit there. The company is known to buy real estate years ahead of construction, Sweet said.

H-E-B has stores in Burleson, Cleburne and Granbury, and its Central Market stores can be found in Fort Worth, Southlake, Dallas and Plano. The Central Market format is the company’s most likely growth vehicle for north Texas.

A new Whole Foods Market will open in Colleyville in early to mid-2014, reports The Dallas Morning News. It will take over a 40,000-s.f. former Albertsons store at 4801 Colleyville Blvd. as part of the redevelopment of Village Park Shopping Center.

The Austin-based natural and organic grocery retailer will open a new store this summer in Addison to replace its Richardson store. It also will open in Highland Village near Flower Mound in 2014 and in Fort Worth. Whole Foods also has plans for a store in Uptown Dallas on McKinney Avenue that will open in 2015.

Tyler-based Brookshire Grocery Co. (BGC) broke ground on three new stores in the region that are all similar in size (37,400 s.f.) and offerings. A new Joshua store opened on Feb. 13, and new stores also are coming to Ennis and Pottsboro. Each will include a pharmacy with a drive-thru, a bakery, deli and a gas station.

In Joshua, BGC bought 6.33 acres at State Highway 174 and Stadium Drive Boulevard. Construction on the store began last summer. The Brookshire’s grocery store is the first business to open in the mixed-use development called Joshua Station. That store replaces the company’s 106 Conveyor Dr. location.

In Ennis, BGC broke ground last Oct. 11 at a seven-acre site for a new Brookshire’s Food & Pharmacy. The Ennis Super 1 Foods, located about a half mile from the new store site, will close after the new Brookshire’s opens this summer.

Brookshire broke ground last June 28 in Pottsboro. That new store will be BGC’s 153rd supermarket. In 2010, Pottsboro’s business and civic leaders began a write-in campaign asking Brookshire’s to open a supermarket in the Lake Texoma area. That store could open in mid-March.

Construction for all three of the new stores emphasizes energy-saving and environmental-friendly features, including an automated lighting system that works in tandem with natural lighting to reduce electricity use, a cutting-edge cooling system that controls refrigerated and frozen foods freezers and coolers, a roof design with a high reflectance rating and polished concrete flooring that’s durable and reduces the amount of cleaning agents used.

BGC hosted grand re-openings at three Super 1 Foods stores in Longview last May 4. The stores, located at 1217 E. Marshall Ave., 1800 S. High St. and 2301 W. Loop 281, all received updated décor, signage and flooring, as well as new carousel checkout stands.

A new grocery retailer is coming to the metro area. Dallas-based LIG Assets and the Texas Real Estate Hedge Fund have executed 20-year term leases on the first of 10 planned locations of the new premium Terry’s Supermarket concept. The first Terry’s Supermarket, a 61,000-s.f. store, will be located on 4.22 acres in Carrollton. LIG bought the property for $3 million.

LIG says a location for a second Terry’s Supermarket has been targeted, but the site was not made public.

United Supermarkets is working on its seventh Market Street location in the Dallas-Fort Worth area, this one to be located in Flower Mound.

Gantt Bumstead, co-president of Lubbock-based United Supermarkets, says that Texas is seen as “a land of opportunity,” and the Dallas-Fort Worth metroplex is one of the state’s most desirable markets.

The new Flower Mound store will be part of The River Walk at Central Park development, at the northeast corner of Crosstimbers Road (FM1171) and Prairie Road (FM2499), according to Tony Crumpton, EVP of facilities, fuel and supply for United Supermarkets. “We anticipate site work and construction will begin before the end of the year, with hopes of a fall 2013 opening.”

The new store will be noticeably different—both inside and out—from its sister stores in the Metroplex. At 55,000 s.f., it will be slightly smaller than any other Market Street location, in addition to sporting a new look inside.

“We believe this store will serve as a new prototype for us, both in terms of size and décor,” Crumpton said. “It should provide an exciting shopping environment for our guests.”

“We are taking the best of our 70,000-s.f. stores and bringing it into a smaller footprint—merchandising from a guest perspective,” added Wes Jackson, CMO of United Supermarkets. “Although we might not have as wide a selection in terms of size and flavors, we think we will still have a very good variety for meeting our guests’ everyday needs.”

Jackson noted that the store’s offering of organic, natural, specialty, body care and supplements “will be an entirely new presentation that will offer the widest variety of any of our stores.”

In addition to the store’s size, guests also will notice a separate entrance and exit. Other Market Street locations have two entrances.

“We think this will greatly improve the traffic flow and shopping experience for guests, not only as they shop but especially after checkout,” Crumpton said.

Two other significant changes: the “fresh from the farm” produce department at the front of the store, and a large casual dining area, complete with indoor-outdoor seating.

“We are also excited to be offering beer and wine by the glass in the casual dining area, which will be a first for our company,” Jackson said.

WinCo to bring its large discount format to DFW

Idaho-based WinCo Foods has purchased 12.5 acres in south Fort Worth where it will build a store that should open in 2014. The 94,000-s.f. store will employ about 200 full-time and part-time workers.

Construction is expected to begin this summer, and it will take about nine months to build.

But that’s just to get the company started in the Lone Star State. It plans to have several stores in the Dallas-Fort Worth area, according to Mike Read, the company’s VP of public and legal affairs, who spoke to the Fort Worth Star-Telegram. He said WinCo is looking at other sites in the metroplex.

The company operates large stores with a wide selection of national brands and is extremely competitive on price. The stores are open 24 hours and have 18 checkout lanes. Shoppers bag their own groceries and self-checkout lanes will be available in the new store, the Star-Telegram reports.

As an employee-owned company, WinCo’s workforce is “extremely dedicated,” the company’s website (www.wincofoods.com) says. Employees have seen their stock ownership plan grow at a 21.51 percent annual compound growth rate.

Its 86 stores are located in Washington, Idaho, Nevada, California and Oregon (hence WinCo, though the retailer now says it is short for “winning company”) and in 2009, a store opened in Utah, marking the first entry into a new state since the ESOP was put in place in 1985. Last year, WinCo made its Arizona debut.

Chicago-based Green Grocer opened a 4,000-s.f. store in Dallas at 3614 Greenville Ave. It is just the second location for the small grocer, which wants to position itself as an alternative to the larger chains by offering products from small, local vendors, reports Pegasus News.

Kroger adds to presence in the metroplex

Kroger was busy in the Dallas-Fort Worth market last year. Last May 4, the country’s largest traditional supermarket operator opened its first Fresh Fare store in Texas at Maple Avenue in the Medical District in Dallas.

The 73,000-s.f. store features Texas-grown produce; more than 100 USDA certified organic fruits and vegetables; and a bulk food area with more than 100 bins of nuts, granola, seeds, snack mixes, spices, teas and nut butters.

A large prepared food area includes a Boar’s Head sandwich shop as well as chef-prepared entrées, vegetables and salads. There also is a sushi counter; a tortilleria that puts out five flavors of tortillas; a cheese shop with more than 100 cheeses; and a salad bar area with soup, olives and antipasti. The store offers 1,275 varieties of wine and 400 beer options.

Kroger opened a newly constructed Signature store last July 2 in Fort Worth. The Kroger Signature concept places more emphasis on an interactive customer experience and offers more natural and organic foods, chef-prepared meal solutions, and ethnic and gourmet food choices. The 100,000-s.f. store at 12600 North Beach St. is the first store of its kind that Kroger has built from the ground up in the Fort Worth area.

Along with a fuel center, the new store features a pharmacy and offers a vast wine and beer selection. Kroger has about 30 Signature stores in the Dallas-Fort Worth market.

A new Kroger Marketplace is going up in Wylie. It will anchor Woodbridge Centre, a 25-acre shopping center at the intersection of FM 544 and Woodbridge Pkwy. The 123,000-s.f. store will be a full-service supermarket and also sell general merchandise for the home, furniture, toys, baby products and fine jewelry. It is scheduled to open in the second quarter. It will be the fifth Marketplace store for Kroger in Dallas-Fort Worth.

A Kroger supermarket will anchor a development in Forney being built by Dallas-based Hunt Properties north of the U.S. Highway 80 and FM 548 intersection. Hunt Properties will develop the 40-acre property, and Kroger will build its own store in the project. Construction is expected to begin in the second quarter, The Dallas Morning News reports.

Walmart is losing ground in the Dallas-Fort Worth grocery market, according to the Dallas Business Journal. The newspaper spoke with Walter Bialas, VP and market research director for Jones Lang LaSalle’s Dallas office. He said Walmart has “topped out” while other retailers like Kroger “establish their brands and serve their customers.”

Walmart opened almost 20 locations over the past year in north Texas, but its market share has declined about 1 percent, according to Jones Lang LaSalle.

Aldi opened a new store on Valentine’s Day in Rockwall at 3085 Ridge Rd. The German-based limited assortment retailer has about 40 stores in Texas, with most in the Dallas-Fort Worth area. It opened its first store in the Dallas market in 2010.

Target Corp. is looking for 100 employees to run its new food distribution center in Denton. The Minneapolis-based retailer’s new 360,000-s.f. facility, located at 3255 Airport Rd., is expected to open in March and will supply about 235 stores.

Why the rush to north Texas?

So what is it about Dallas-Fort Worth that prompts grocery retailers large, small, new and established to flock there?

The market is drawing job seekers, which is driving population growth and improving the housing market.

Employment growth in the area was 3 percent in 2012, stronger than in 2011, according to D’Ann Petersen with the Federal Reserve Bank of Dallas. The Dallas-Fort Worth metroplex added more than 79,000 jobs from December 2011 to December 2012.

The Dallas Business Journal reports that Fort Worth and Dallas are among five Texas cities NerdWallet named as the top 10 best places in the country for job seekers. NerdWallet said Dallas, ranking No. 7 on the list, “is known as the ‘Silicon Prairie,’” because it is home to high-tech companies and near the “Telecom Corridor, a hub for telecommunications manufacturing.” Fort Worth, at No. 6, has seen an upsurge in population and has low unemployment and a low cost of living.

Penske Truck Rental’s annual study revealed that Dallas-Fort Worth is the country’s second most popular moving destination, moving up from No. 4 last year. (Atlanta took the top spot.)

The population is expected to rise by an average of 100,000 a year, according to Ted Wilson, president of Residential Strategies, who told the Dallas Business Journal that the real estate market is “as tight as I’ve ever seen it.”

The metro area housing market now has less than three months supply of available single-family homes. As a result, home prices rose 3.9 percent from December 2011 to December 2012.

“The recovering economy is manifesting in North Texas with solid job and population growth,” Wilson told The Dallas Morning News. “The overhang of housing inventory, both in the form of vacant for-sale housing and unoccupied rental units, is largely gone.”

Herb Weitzman, chairman and CEO of The Weitzman Group, said in January at the firm’s 23rd Annual Shopping Center Survey & Forecast that as retail footprints shrink, property owners are renovating their sites in order to draw the new, smaller stores.

The Dallas Business Journal quotes Weitzman as saying that “there is an opportunity to fill up our existing retail centers before the next wave of construction.”

Ross Perot Jr., owner of real estate firm Hillwood Cos., which signed the deals with Amazon.com for its new Coppell and AllianceTexas distribution facilities, said at a recent event, “These are the days you move forward and gain ground and build your business.”

Kenneth McCarthy, chief economist for Cushman & Wakefield, believes the north Texas market will continue to benefit from a growing economy in 2013, reports the Journal. He expects the economy to pick up speed toward the latter part of the year, and that Dallas-Fort Worth will continue to be chosen by companies looking for a business-friendly market.

“It would take a lot going wrong to create a recession,” McCarthy said. “Where we are right now in the cycle, it would take a lot to dip down again.”

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