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Ukrop’s allure eludes Martin’s

David Larter January 20, 2012 17

 

For decades, the formula for developing successful new retail centers in Richmond was as clear as day: Land a Ukrop’s supermarket as the anchor tenant and fill in around it.

Given the chain’s no-alcohol policy, you usually got a wine store, and you could count on tossing in a pharmacy and maybe a few restaurants.

But that formula got more complicated in recent years, first when sales started to slow at Ukrop’s and then in 2009, when the Richmond-based grocer was sold to the parent company of Martin’s.

“Everybody wanted to be in a Ukrop’s shopping center, because Ukrop’s was the institution in Richmond,” said Peter Bunin, a broker with S.L. Nusbaum who helped develop some of the Ukrop’s shopping centers in Richmond and who leases space in four of the Martin’s centers.

Bunin said that for decades the 72-year-old brand made for an easy sell to prospective tenants but that the Ukrop’s centers eventually lost a bit of their allure. And then the economy slowed, making it harder to lease spaces everywhere.

A dozen brokers who talked with BizSense said that although Martin’s is still a big draw as an anchor tenant, outlying retail spaces in Martin’s centers are harder to lease to locally based businesses than when the stores carried the Ukrop’s banner.

That’s partly because there is simply more competition for grocery customers in Richmond, including Wal-Mart and Food Lion and more recent entrants such as Whole Foods and Trader Joe’s. And, of course, the economy is still hurting.

But brokers said Martin’s underestimated the loyalties of Richmonders and that their sales are lower than expected. And local retail tenants are more hesitant — perhaps just for emotional reasons, brokers say — to sign leases in centers anchored by Martin’s.

James Ashby, a broker with Cushman Wakefield | Thalhimer, said that overall there has not been a huge change in the kind of tenants attracted to Martin’s-anchored centers, but he noted that Richmonders have been slow to warm to the newcomer.

“Any time you make a big change, especially when they are taking over from a company like Ukrop’s, there will be some degree of that,” he said. “But overall there hasn’t been a big drop-off in foot traffic that I’ve seen in Martin’s centers.”

Connie Nielsen, also a Thalhimer broker, said that foot traffic in some Martin’s shopping centers dropped during the Ukrop’s days.

“Before Ukrop’s sold, they had seen a drop in quality and market share but had held onto their loyal fan base by being the hometown favorite,” Nielsen said. “Martin’s does not have that luxury.”

“The drop in patronage has [negatively] affected some merchants … that co-tenant with Martin’s,” she said. But “Martin’s is still a strong anchor, and as long as the property is well positioned and the center has other strong co-tenancy, they are still a desirable anchor.”

Luke Puccinelli, who works for Regency Centers and leases space near the Martin’s at the Village and at Gayton Crossing, said that local retailers are still wary of Martin’s shopping centers but that national retailers and restaurateurs see the grocer as a good anchor because its parent company is financially strong.

“They are too big a company and too experienced a company [to fail.] From the sales I’ve seen and the conversations I’ve had with their team last year and into this year, they’re moving in the right direction,” Puccinelli said.

As for Richmonders’ early reluctance to embrace the grocer, both as an anchor and a part of the community, it was a matter of how deeply entrenched Ukrop’s was in the Richmond culture.

“I think any other store would’ve had just a much trouble, whether it was Harris Teeter or Kroger or Food Lion,” Puccinelli said. “And a lot of other operators, I’m not sure they would have done as well as Ahold,” the parent company to Martin’s.

For Puccinelli, there is at least one big change that weighs in Martin’s favor: Unlike Ukrop’s, they are open on Sundays.

“In local name recognition, Ukrop’s was the better anchor tenant, but on Sunday there was almost no traffic,” he said. “Now retailers are saying, ‘Hey, Sunday is a full day of business.’ They are seeing traffic they never saw before.”

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17 Comments »

  1. Sheila Berry January 20, 2012 at 8:53 am - Reply

    This reminds me of what happened in Wisconsin after Kohls Groceries were sold to A&P when Herb Kohl ran for the Senate. Kohls was to southern Wisconsin what Ukrops was to Richmond. While I lived there, I continued to shop at Kohls Groceries, which was little changed with A&P in charge. I’m not sure what happened, but I moved away in 1991 and when I visited in 1996, all the Kohls Groceries had been closed. (The Kohls department stores, sold at the same time, have expanded.) I would hate to see that happen to Martins, because they have retained much of what made Ukrops so good — plus their hours are very convenient.

    • Center Flank January 23, 2012 at 12:27 pm - Reply

      Very Interesting! I had no idea there was a Kohls grocery!

  2. Danny DeBoer January 20, 2012 at 10:31 am - Reply

    Clearly, Martins does not possess the same culture of quality and service as did Ukrops. Nor do I believe they are attempting to get there

  3. Ben Remo January 20, 2012 at 11:07 am - Reply

    Martin’s is not trying to be Ukrop’s. The truth of the matter is everybody is hurting and anybody who takes over a local legend like Ukrop’s is bound to see a decrease in patronage.

  4. Jerry January 20, 2012 at 11:52 am - Reply

    Considering the fact that Martins bought the premium grocery in Richmond (Ukrops), and immediately did a 180 degree turn with it, turning the stores into poor service, extended hours and alcohol strewn floors who is surprised. Mean while, Kroger has filled the void created by this loss by continuing to upgrade their stores and providing a grocery shopping experience more similar to the standard Ukrops created.

  5. Vicki January 20, 2012 at 11:55 am - Reply

    It seems to me that I have heard the description “too big to fail” before….

  6. Andy January 20, 2012 at 12:08 pm - Reply

    Martin’s is too big of a store to “fit” into the Ukrop’s spaces, which are typically smaller stores with less square footage. If you visit Martin stores in Northern Virginia, they are on a much bigger scale with better service, better produce and more selection. Plus with Kroger expanding and remodeling all of their Richmond stores and more Target stores in the area getting produce, Martin’s is going to continue to feel the squeeze.

  7. dan hargett January 20, 2012 at 2:09 pm - Reply

    martins needs to abandon its sycamore square store and move to westchester. the store is tiny and reminds every shopper that goes into it that remodels are the best indication that a retailer cares about its customer

  8. James Grayland January 20, 2012 at 3:04 pm - Reply

    Agree with Danny and Jerry…Right before I Ukrops went out of business I started going to Kroger…Better Prices. Although, I would go to the “U” for produce.

    That said, Martins services is pretty bad. I agree that Martins does not possess the same culture of quality and service as did Ukrops and I would agree as well (with Danny) that they are not attempting to get there either. I only visit Kroger now.

  9. Mariane Matera January 20, 2012 at 7:00 pm - Reply

    The headline seems to contradict the story. Everyone you quote say there hasn’t been a drop in foot traffic, or whatever there is can be attributed to the economy. So why the headline making it sound like Martin’s is at fault?

  10. Tamara Smith January 21, 2012 at 12:24 pm - Reply

    Anyone who shops at Martin’s can tell you that the foot traffic isn’t what it was at Ukrops. Cashiers and baggers, are not as likely to greet shoppers with smiles and courteous treatment, a few seem to avoid eye contact altogether. There’s a lack of mission in their air. Martin’s will unlikely regain the customer loyalty that Ukrops once had in Richmond, but I’ve notice Martin’s is sponsoring more and more events in and around Richmond, they’re trying to get the attention of the Richmond resident. They’re not bad guys, they’re just slow learners.

  11. Rose January 21, 2012 at 5:00 pm - Reply

    The Gayton Crossing store still has the same great people and service they had before, Very helpful managers, employees and pharmacists. Tried other stores, always better service at Martins.

  12. JB January 22, 2012 at 11:25 am - Reply

    Pretty much every time I’ve visited Martin’s in Richmond, I have had a bad experience. Customer service at the Carytown store has dropped tremendously. Luckily Kroger is right across the street.

  13. Courtney B January 23, 2012 at 7:30 am - Reply

    Martins has failed to continue the same friendly customer service, clean stores, fresh food selection, and fresh produce, as Ukrops. Kroger is a much better option and we shop there; except for yesterday when Carytown Kroger was so busy there were no parking spots. We reluctantly went to Martins and not only did our bill tally higher, we felt like we got a lot less in service and product. I can’t wait for Fresh Market!!!

    • Courtney B January 23, 2012 at 7:38 am - Reply

      And a P.S. We bagged our OWN groceries! They woman working the checkout didn’t have anyone bagging for her and if we hadn’t stepped in, we would have waited forever while she rang us up THEN bagged. Not good customer service or very efficient.

  14. Myinnermind January 23, 2012 at 12:28 pm - Reply

    I may be the only one, but I really like Martins! (and no, they didn’t pay me to say it)

    I like that they are open on Sunday and sell beer now.

    I’ve found most of the exact same staff at the Village for years, with the same great service, far exceeding what I just experienced at Krogers yesterday.

    Martins shares the same sense of community involvement as the Ukrops.

    They just recently remodeled all the stores when they purchased the business.

    What’s not to love? I guess Richmonders hate change more than anything else. This is the problem, not the stores or anything about them.

  15. Issac Blue January 26, 2012 at 11:56 am - Reply

    The one point of conversation that was not addressed in this article or the comments is the fact that Ukrop’s was sold due to financial problems. This was a classic example of horizontal integration by a company that required substantial capital and resources, causing cash flow problems. Change of any degree will always be greeted with a certain percentage of unfavorable reviews. While customer satisfaction and service have arguably decreased since the purchase by Ahold/Martin’s, the alternative would be a “dark” store with no traffic.

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