Upper Darby shopping center owner to propose $120 million renovation

Drexeline Shopping Center, an Upper Darby, PA retail center built in the 1950's, will undergo a $120 million renovation, according to property owner MCB Real Estate.

The new center will feature a redesign for current tenants like ShopRite, Crozer-Keystone Medical Center, PNC and Wells Fargo, and the addition of a Wawa Superstore, new office building, improved parking, pedestrian walkways, and a six-story self storage facility that looks like an office building.

According to MCB, Drexeline Shopping Center's annual economic impact is about $37 million, and it supports about 350 jobs. Upper Darby Township Mayor Thomas Micozzie believes that once the property is redeveloped, that annual impact will surpass $100 million, and will support 600 direct jobs.

"They will have to apply for a zoning variance," said Jeff Gentile, the township's director of licenses and inspections. "They would have to show compliance with a flood plain and go before the county's planning commission before it comes back to Upper Darby for final review. Then it will be brought to council for land development approval and building code review."

Thomas Judge, Jr., Upper Darby's Chief Administrative Officer, said earlier this month that no plans or applications have been filed with the township to date.

Delhaize may pull the plug on Bottom Dollar

Food Trade News reported in its August issue that Bottom Dollar Foods, a division of Delhaize America, "has reportedly felt enough competitive heat and is exploring the sale of its 66 stores located in Pennsylvania, Southern New Jersey and Northeast Ohio." 46 of the 66 stores are in the Greater Philadelphia market.

Reportedly several retailers received profile sheets in July and bids for the stores were due on August 13. In addition, Food Trade News learned that Wells Fargo is serving as Delhaize America's investment advisor.

Analysts believe that Delhaize is trying to sell all 66 stores rather than sell individual locations or groups of stores. Supervalu (Save-A-Lot) and Aldi are leading contenders.

According to information that Food Trade News obtained, all but 10 Bottom Dollar stores are leased. The stores typically have significant term remaining and rents of about $10-$12 per square foot, although they range from $1.76 (most likely a ground lease) to $26.23. Store sizes run from 16,848 to 30,352 square feet, with most closer to 20,000 square feet. Weekly sales volumes range from $103,000 to $296,800, with an average weekly volume of $156,802. 

Bottom Dollar entered the Greater Philadelphia Market in 2010, and many industry observers were skeptical. Discount operators like Aldi and Save-A-Lot were already in the market, not to mention PriceRite, dollar stores and Walmart Supercenters. 

Referencing Bottom Dollar locations, the Food Trade News story quoted a veteran merchant as saying "You get what you pay for... After seeing what their operating model was it was pretty clear that their questionable site selection would not be beneficial."

The Fresh Market expanding in CA, TX and FL

The Fresh Market isn't worried about Whole Foods' competitive price positioning and feels it is less prone to price sensitivity than its competitors, according to CFO Jeffrey Ackerman.

"Our view is that people are coming to us for the quality of the service, the quality of the food and a different shopping experience," Ackerman said last month.

The company plans to open 23 or 24 new stores in fiscal 2014, seven of which will be in Florida. Recent expansion efforts in Sacramento and Houston have struggled, and stores in Laguna Hills, CA and Dallas-Fort Worth are slated to open in the next year.

Analysts were cautiously optimistic about The Fresh Market's outlook following its first quarter earnings release last month. A Wells Fargo analyst said she was "encouraged to see comps did not decelerate in Q1, traffic was positive, new store productivity is improving and the company is committed to its refocused real estate strategy."

"Banner Churn" of 2013 may continue into 2014

Supermarket News published an informative year-end story about the many changes that took place this year in the food retail industry. They called it a year of "banner churn."

The article starts by pointing out that the "big three" made major moves. Kroger agreed to buy Harris Teeter, Safeway sold its Canada division and announced that its closing its Dominick's chain in Chicago (only a year after closing all but one of the company's Genuardi's stores), and Supervalu sold 877 stores - including the Albertsons and Acme chains - to an investment group led by Cerberus that includes Kimco and Philadelphia's Lubert Adler.

Regarding the Supervalu deal, Albertsons Chief Executive Robert Miller told Supermarket News that "we're in this for the long haul," and that "we have no plans to sell any of the brands."

Whether Miller is being truthful, or simply truthful for now, is yet to be seen. There are many that don't believe the company will hold on to Acme - or at least the banner's many underperforming stores - for very long.

As for the industry's future, Irene Marks and David Mell of Wells Fargo believe "consolidation and capital markets activity will remain robust well into 2014 as the grocery industry continues to evolve to suit today's eclectic, diverse and conscientious consumer."

To read the Supermarket News story, click here.