Park/Preston Kroger in Plano closing after only 2 years

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Park/Preston Kroger in Plano closing after only 2 years

Post by architect » December 8th, 2017, 8:49 pm

Earlier tonight, I was driving by the Park/Preston Kroger in Plano (a former Tom Thumb turned Minyard Sun Fresh which was sold to and renovated by Kroger in late 2015) and noticed a store closing banner on the front of the store. When I went inside to check it out, the store was still well-stocked, but almost all product was being sold at 25-50% off. It is surprising that Kroger gave up on this store so quickly. During previous visits to this store, traffic seemed slow, but not slow enough to lead to closure in less than 2 years. According to an employee, Kroger made the decision to close this store in order to focus their resources on their other area stores, particularly their Marketplaces. Interestingly, she also mentioned that Kroger is looking at potential sites for a Marketplace in the area. This location apparently suffered from low traffic under both Tom Thumb and Minyard Sun Fresh, and Kroger could not turn things around. All employees are being relocated to surrounding stores. I highly doubt that the space will be filled by another traditional grocer, but it could be ideal for a chain such as Sprouts which could take advantage of the smaller space. Then again, one of the factors which likely hurt the store is the fact that it is deep within its shopping center and not visible from Preston, which would also impact whichever replacement retailer moves into the space. On the other hand, it is on the "right" side of the road for afternoon commuters coming from Dallas into the Plano/Frisco area, unlike the Market Street across the street which forces waits at lights to both enter and exit its shopping center.

Interestingly, as this Plano store is closing, another Plano Kroger is in the process of receiving a long-needed renovation at Indepence/Legacy (an early 90's store converting from Script to Marketplace decor along with a major food-centric merchandise shift and the addition of ClickList). It definitely seems that Kroger is doing a broad review of their DFW operations and making changes where necessary.

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Re: Park/Preston Kroger in Plano closing after only 2 years

Post by storewanderer » December 8th, 2017, 10:53 pm

It never looks good to close stores so quickly. Maybe Albertsons will take the location back.

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Re: Park/Preston Kroger in Plano closing after only 2 years

Post by architect » December 9th, 2017, 5:20 am

storewanderer wrote:
December 8th, 2017, 10:53 pm
It never looks good to close stores so quickly. Maybe Albertsons will take the location back.
I highly doubt that this will be the case, as Albertsons owns a Market Street just across the street, and apparently this store was losing money as a Tom Thumb even prior to it's divesture. Crazier things have happened though. If this space remains a traditional grocer, my guess is Sprouts as it is one of the only major area grocers that has not currently or previously been represented at this intersection.

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Re: Park/Preston Kroger in Plano closing after only 2 years

Post by pseudo3d » December 9th, 2017, 8:28 am

Interesting, from the things I read last time Market Street had declined significantly (to be more like a "regular" supermarket) and that caused an uptick in Kroger traffic. Thinking back to my visit, I thought it was the Market Street that had the worst visibility (I had to go from the back) though I never saw the Kroger. Market Street is about a quarter mile away from the road.

I did some research on the store. I don't think Albertsons would want it back anyway due to the fact that it was Kroger who couldn't even make it work, besides, the store is relatively small (Market Street is over 70,000 square feet while the former Tom Thumb is under 50,000 square feet). Furthermore, they couldn't even take it back if they wanted...it's still OWNED by Kroger and its subsidiaries (it was originally Cullum's, d/b/a Tom Thumb-Page, then Randalls which later operated under Safeway, then RLS Supermarkets (which owned Minyard and Minyard SFM), then Kroger Co. (and its subsidiaries). So unless Kroger is planning to do something like convert it to a Lucky's Market (unlikely since Lucky's is not in Texas, and probably isn't due to store cannibalization) or just sell off the store, it won't be used as food and drug for a long time.

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Re: Park/Preston Kroger in Plano closing after only 2 years

Post by architect » December 9th, 2017, 8:56 am

pseudo3d wrote:
December 9th, 2017, 8:28 am
Interesting, from the things I read last time Market Street had declined significantly (to be more like a "regular" supermarket) and that caused an uptick in Kroger traffic. Thinking back to my visit, I thought it was the Market Street that had the worst visibility (I had to go from the back) though I never saw the Kroger. Market Street is about a quarter mile away from the road.
Although Market Street has declined somewhat under Albertsons, that particular store is still far ahead of the Kroger in question both selection and staffing wise. Even though Kroger did a good job of renovating this store, it was simply too small to allow for a full product selection, especially when compared with surrounding stores. Between the two, Market Street won out primarily due to Kroger's insufficiency rather than any advantage of their own.

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Re: Park/Preston Kroger in Plano closing after only 2 years

Post by pseudo3d » December 9th, 2017, 9:15 am

architect wrote:
December 9th, 2017, 8:56 am
pseudo3d wrote:
December 9th, 2017, 8:28 am
Interesting, from the things I read last time Market Street had declined significantly (to be more like a "regular" supermarket) and that caused an uptick in Kroger traffic. Thinking back to my visit, I thought it was the Market Street that had the worst visibility (I had to go from the back) though I never saw the Kroger. Market Street is about a quarter mile away from the road.
Although Market Street has declined somewhat under Albertsons, that particular store is still far ahead of the Kroger in question both selection and staffing wise. Even though Kroger did a good job of renovating this store, it was simply too small to allow for a full product selection, especially when compared with surrounding stores. Between the two, Market Street won out primarily due to Kroger's insufficiency rather than any advantage of their own.
The store really wasn't that small, though, from aerial measurements it was a bit under 50,000 square feet, which is more than enough to run full perishable departments and have a good merchandise mix. I think my favorite Kroger store ("Kroger of the Villages") is about that size or smaller and it had most everything I needed, and it survived against a massive 100k square feet H-E-B on the other side of the freeway an exit down (plus H-E-B was on the correct side of the freeway for outbound traffic). I can't help but think that this relates to the chaos at the distribution center.

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Re: Park/Preston Kroger in Plano closing after only 2 years

Post by architect » December 9th, 2017, 1:46 pm

pseudo3d wrote:
December 9th, 2017, 9:15 am
architect wrote:
December 9th, 2017, 8:56 am
pseudo3d wrote:
December 9th, 2017, 8:28 am
Interesting, from the things I read last time Market Street had declined significantly (to be more like a "regular" supermarket) and that caused an uptick in Kroger traffic. Thinking back to my visit, I thought it was the Market Street that had the worst visibility (I had to go from the back) though I never saw the Kroger. Market Street is about a quarter mile away from the road.
Although Market Street has declined somewhat under Albertsons, that particular store is still far ahead of the Kroger in question both selection and staffing wise. Even though Kroger did a good job of renovating this store, it was simply too small to allow for a full product selection, especially when compared with surrounding stores. Between the two, Market Street won out primarily due to Kroger's insufficiency rather than any advantage of their own.
The store really wasn't that small, though, from aerial measurements it was a bit under 50,000 square feet, which is more than enough to run full perishable departments and have a good merchandise mix. I think my favorite Kroger store ("Kroger of the Villages") is about that size or smaller and it had most everything I needed, and it survived against a massive 100k square feet H-E-B on the other side of the freeway an exit down (plus H-E-B was on the correct side of the freeway for outbound traffic). I can't help but think that this relates to the chaos at the distribution center.
The aerial measurements for this store are somewhat deceptive. Although the store seems large at first glance, much of the square footage is open circulation space around the bakery/deli/produce departments, along with a large wine department. The receiving area is also quite large. Although the food selection is well-featured, most products only have 1-2 facings which make out of stock situations much more common, and GM is clearly lacking due to shear space. With the Kroger of the Villages, the store works well because it is largely serving just the immediate neighborhood surrounding the store, much of which is wealthy families simply looking for a no-hassle shopping experience which is an alternative to the madhouse Bunker Hill HEB. On the other hand, much of the retail at the Park/Preston intersection serves traffic to/from points north into/out of Dallas. With so many other grocers nearby, most potential shoppers were likely just making the decision to shop closer to their homes vs stopping at a less full-featured store on the way home. In addition, many residents immediately surrounding this store actively avoid Preston around commute times, which may have hurt this store even further.

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Re: Park/Preston Kroger in Plano closing after only 2 years

Post by architect » February 24th, 2018, 4:05 pm

Interesting update on this Kroger's closure: According to a Google Local Guides poster who spoke with an employee at the Preston/Campbell store, the Preston/Park location was facing around 1.7 million dollars in annual maintenance and upkeep costs, largely due to a lack of maintenance both under Tom Thumb and Minyard Sun Fresh. When Kroger approached the shopping center owner about assisting with the repairs, the owner refused to pay anything, so Kroger was essentially being forced to close or risk investing a substantial amount of capital expenditure into a store which was only pulling moderate traffic.

Interestingly, this same employee at Preston/Campbell supposedly mentioned that that store is also in bad shape and needs substantial maintenance/repairs. As a result, there is speculation that the Preston/Campbell store might be either extensively renovated, replaced, or just outright closed. If this location was to be closed, it would leave no Kroger stores in the entire area of Far North Dallas.

As a whole, Kroger definitely seems to be slipping in DFW. Recently, I have noticed far more low stock and out of stock situations, along with expired inventory and low staffing. At one store I frequent, the deli checkout register has been broken for months now, and the balkery/deli has been understaffed by several people for a while, according to multiple longtime employees.

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Re: Park/Preston Kroger in Plano closing after only 2 years

Post by storewanderer » February 24th, 2018, 9:52 pm

I understand closing stores with too much deferred maintenance but if that is what is happening then you need new stores in the pipeline to replace those that are being lost, in my opinion.

I would think they knew about the deferred maintenance going into this Park/Preston Minyard, but maybe they did not generate the traffic they were expecting so that messed up their projections. And maybe there were more "surprises" than expected which further pushed things in the wrong direction.

I agree Kroger's operations are slipping... and centralized decisions and programs that come from Cincinnati as of late are losers but can't seem to be adjusted fast enough to be fixed. It is sad to watch. At least the pricing and private label programs remain strong.

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Re: Park/Preston Kroger in Plano closing after only 2 years

Post by architect » February 25th, 2018, 8:44 am

storewanderer wrote:
February 24th, 2018, 9:52 pm
I understand closing stores with too much deferred maintenance but if that is what is happening then you need new stores in the pipeline to replace those that are being lost, in my opinion.

I would think they knew about the deferred maintenance going into this Park/Preston Minyard, but maybe they did not generate the traffic they were expecting so that messed up their projections. And maybe there were more "surprises" than expected which further pushed things in the wrong direction.

I agree Kroger's operations are slipping... and centralized decisions and programs that come from Cincinnati as of late are losers but can't seem to be adjusted fast enough to be fixed. It is sad to watch. At least the pricing and private label programs remain strong.
From a real estate standpoint, my guess is that the terms of Kroger's agreement with Minyard Sun Fresh to take over the space were extremely favorable to Kroger, considering how desperate that Minyard Sun Fresh was to rid themselves of this store. As a result, it was likely advantageous for Kroger to take a shot at the space even if long-term success was somewhat unlikely. Under both Tom Thumb and Minyard Sun Fresh, the store was in noticeably bad shape, and although Kroger did much to fix up the space from a customer point of view (replace stained ceiling tiles, update perimeter lighting, renovate disgusting restrooms, etc.), fundamental issues with the building such as roof and HVAC issues continued to plague the store. Actually, now that I think about it, I actually had to show an employee how to fix a sliding glass entry door which was not closing properly during one visit, as it was a door model I am familiar with and none of the store staff could figure the issue out.

I definitely agree that in general, Kroger needs to be planning replacement stores for locations which are poised to become maintenance money-pits over the next few years, so that they are not caught off guard, with the Preston/Campbell store being a perfect example. However, at Park/Preston, this store was actually Kroger's second location, and it was clearly remarketed as a rebirth of the first. Kroger previously had a Wedge store at the northeast corner of the intersection which opened in the late 80's and closed in the late 2000's due to a roof in danger of complete failure along with changing traffic patterns making the store only minimally profitable. During the 90's with the completion of the Dallas North Tollway, much of the north/south commuter traffic which had been formerly relegated to Preston Road gradually shifted to the Tollway. Consequently, both Kroger and Tom Thumb built new stores at the Parker/Tollway intersection, which quickly overtook their Park/Preston counterparts. With this more recent Park/Preston store, Kroger was making a bet that traffic patterns were once again strong enough to warrant an additional grocer in the area (particularly on the northbound side for afternoon commuter traffic), but lost likely due to poor visibility and a generally underwhelming store which was undersized compared to other nearby locations.

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