Wegmans Woes in North Carolina

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Wegmans Woes in North Carolina

Post by jdb820 »

First, Wegmans pulled out of their planned store in Cary, NC shortly before shovels were to go to ground in March 2021.

Then, it was revealed that Wegmans was still making lease payments for their plot on that site "for the foreseeable future" even as the developer was frustrated the development was opening without a grocery anchor.

Now, Wegmans has put their planned Holly Springs, NC location on indefinite hold as they reassess the market. (Paywall) Their reasoning includes supply chain issues and the effects of eCommerce growth. No plans to sell the land though.

Raleigh was a rousing, record-setting success but the three other NC locations to open to date (West Cary, Chapel Hill, Wake Forest) all were hobbled by opening during COVID and lacking the fanfare and many of the other things that make Wegmans Wegmans. Might these decisions be a harbinger of North Carolina not being a good fit or might it be a ton of chickens coming home to roost at once? They are still planning on opening their third DC outside Richmond which would help a ton but where else in NC (and points south) has the demographics and mass to support Wegmans at this point?

Perhaps people don't want to pay $13 for a footlong sub that's $7.99 at Harris Teeter or $9.49 max at Publix. Or spend $13.99 on a salad or wing bar that is legitimately half that elsewhere. I know COVID has hurt Wegmans hard but ,might this malaise have happened virus or none?
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Re: Wegmans Woes in North Carolina

Post by pseudo3d »

I think it's hard to say. Until relatively recently, Wegmans used to open huge stores that were far and away bigger than anyone else in the industry, at 120k square feet to 140k square feet. But now, Wegmans store prototypes have been shrinking. 80k to 100k square feet (which Wegmans has been leaning into more and more) still is a spacious grocery store, especially stacked up against Publix, but Kroger/Harris-Teeter has stores around that size, and all across the grocery world, other grocers are that size or larger. Giant Eagle and their "Market District" stores, Hy-Vee is going on the offensive with larger stores (building a 150k square feet in Zionsville, even if a substantial chunk of that is dedicated to pickup services, is huge), H-E-B and their ~120k square feet standard, and even Albertsons has dipped their toes into the 100k+ square foot club.
Wegmans' perishable programs led the grocery industry as well, especially the format with clumping on the perishables all together on one side of the store (which H-E-B does)…Wegmans invented that.

But when the neutered size and perishables that aren't unique anymore run up against established competition, it's not hard to see why they aren't wildly successful everywhere they go. Compounding this would be the pricing…New York prices won't fly in the South, and as for COVID, New York had some extremely stringent rules for a long time even as other places started to reopen. Even in Austin, salad bars, wing bars, and soup bars are all back. Is Wegmans still cutting perishable programs in places where that's no longer necessary?
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Re: Wegmans Woes in North Carolina

Post by buckguy »

Much of the space that's missing from newer stores seems to be the seating which often wasn't being used much pre-COVID. Some stores were always planned to be smaller---like the long stalled DC location, which will open soon. Plans for a store in DC proper have been discussed for a decade and it was always going to be a relatively small (80Kish) store.

The markets they're entering in NC are small compared to their previous locations, so they probably adjusted the store sizes they use in places like NYC, DC, etc. I've only been to one of their older, more conventionally sized stores, which was in a small market (Corning, NY) in Central NYS and they managed to include a lot of what people expect from them---prepared foods and bakery and stations for takeout despite the size.

From the other thread on this, it sounds like these are probably saturated markets with a variety of chains, which is different from entering a larger market with varied competition like DC. One of the cancelled stores was part of a cancelled development. NC seemed like an odd choice for them even though there are a lot of Northeastern transplants and NC has a lot of long-term connection in DC, in particular. They could easily enter some place like Pittsburgh where their main competition would be Giant Eagle's unimpressive Market District stores.
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Re: Wegmans Woes in North Carolina

Post by storewanderer »

Harris Teeter runs an exceptional operation in that NC market. Their perimeter programs are better developed, better assorted, and well executed. Pricing is on the higher side but you have the feeling you get what you are paying for. It is run to such a higher standard that it does not even seem like the same chain as the HT's I went to in Nashville and in DC area (high priced and nothing special to justify said prices- flashy looking store but it ended with looks).

Are those NC Harris Teeter's as good as a Wegman's? Absolutely not. But they are close. And they are much easier to get in and out of and in more convenience locations. You have to drive by how many very good HT locations to get to a likely excellent but still scaled back/smaller than prototypes built a decade ago Wegman's? Too many.

Then you have Publix with its strong customer loyalty as well.
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Re: Wegmans Woes in North Carolina

Post by jdb820 »

buckguy wrote: March 30th, 2022, 11:18 am Much of the space that's missing from newer stores seems to be the seating which often wasn't being used much pre-COVID. Some stores were always planned to be smaller---like the long stalled DC location, which will open soon. Plans for a store in DC proper have been discussed for a decade and it was always going to be a relatively small (80Kish) store.
The reason that Wegmans began shrinking their footprints came in part due to wanting to get into DC. When Woodmore opened across the line in Maryland, a parade of DC politicians toured the store and the consensus was to open a full-sized store on the opposite side of Northwest (on part of the ex-Walter Reed campus fronting Georgia Ave), parking and all. There was a ton of backlash there which led them to experiment with smaller formats while shaving the sizes of their own stores.
From the other thread on this, it sounds like these are probably saturated markets with a variety of chains, which is different from entering a larger market with varied competition like DC. One of the cancelled stores was part of a cancelled development. NC seemed like an odd choice for them even though there are a lot of Northeastern transplants and NC has a lot of long-term connection in DC, in particular. They could easily enter some place like Pittsburgh where their main competition would be Giant Eagle's unimpressive Market District stores.
When Wegmans entered DC (and to be fair, Baltimore), there wasn't really anything that compared to it. Giant and Safeway hadn't upgraded their stores, Harris Teeter was Virginia-only, Trader Joe's wasn't much of a force, Aldi hadn't gone upscale yet, no Lidl. Entering NC, Wegmans had to deal with an entrenched Harris Teeter, a Publix coming from the opposite direction with a far more flexible footprint, Lowes Foods which itself went upscale, plus a upscale Aldi, Lidl, a growing Trader Joe's footprint, the list goes on and on. Even the Food Lions and Carlie C's (the local IGA footprint) do decent jobs with their stores here on the low end.

I think Wegmans sees more dollar signs in NC and points south than they do Pittsburgh, that and Giant Eagle has done everything in their power to keep Wegmans, Meijer, and any competition out.
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Re: Wegmans Woes in North Carolina

Post by buckguy »

The Walter Reed site was never a definite and the developer later admitted that they had raised the possibility as a hypothetical. Basically, it was a way to draw support for their other plans.

When Wegman's entered the market, there were plenty of Whole Foods, Trader Joe's was established and expanding, and the same could be said of Harris-Teeter. Wegman's was slower to expand in MD than VA because of the quirky liquor laws in Montgomery County. That is one area where DC would have been easier. The DC Wegman's is not far from the Social Safeway (recently redone), a couple Whole Foods (one recently redone) and a high end Giant that opened a few years ago after many years of wrangling with the neighborhood, so it will have plenty of strong competition and location isn't the best from a transit perspective (Trader Joe's, Whole Foods and most Giants in DC have good Metro access). The Walter Reed location, if it had ever happened, would have had weaker competition--3 stores in downtown Silver Spring (a nicely redone Giant, a forgettable Safeway and a weak Whole Foods) a mile or so away and a Walmart and an underachieving Safeway a mile in the other direction.
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Re: Wegmans Woes in North Carolina

Post by jdb820 »

buckguy wrote: March 31st, 2022, 7:42 am The Walter Reed site was never a definite and the developer later admitted that they had raised the possibility as a hypothetical. Basically, it was a way to draw support for their other plans.

When Wegman's entered the market, there were plenty of Whole Foods, Trader Joe's was established and expanding, and the same could be said of Harris-Teeter. Wegman's was slower to expand in MD than VA because of the quirky liquor laws in Montgomery County. That is one area where DC would have been easier. The DC Wegman's is not far from the Social Safeway (recently redone), a couple Whole Foods (one recently redone) and a high end Giant that opened a few years ago after many years of wrangling with the neighborhood, so it will have plenty of strong competition and location isn't the best from a transit perspective (Trader Joe's, Whole Foods and most Giants in DC have good Metro access). The Walter Reed location, if it had ever happened, would have had weaker competition--3 stores in downtown Silver Spring (a nicely redone Giant, a forgettable Safeway and a weak Whole Foods) a mile or so away and a Walmart and an underachieving Safeway a mile in the other direction.
Without trying to get too much into the territory for the Mid-Atlantic forum, some other matters:
  • Wegmans issues in Montgomery County weren't just towards the wonky liquor laws (which is a statewide matter since MD delegated to the counties), it was because of outward hostility the county government had towards Wegmans for being non-union. If memory serves me right, UFCW lobbied and got a bill that more or less was surgically made to ban Wegmans and Walmart Supercenters which took years to undo.
  • In general, MD has been a weird state for Wegmans given how they are practically dry (only IIRC Columbia can sell any alcohol, and just beer at that).
  • The Walter Reed site is going to be getting a Harris Teeter of all things and it's going to siphon off from the Silver Spring trio given the need for competition there is huge. Harris Teeter at some point looked at building on the Falkland Chase site in Silver Spring until that was successfully market for preservation as a site of early garden apartments.
  • Truth be told somewhere in Silver Spring would be good for Wegmans as the market is there and it's just far enough from current locations and even getting to the old Fannie Mae site is a headache.
Back to the Triangle, most of the Wegmans aren't far from competition. West Cary has a Publix and Harris Teeter within one mile, Wake Forest is similar but with a Lowes Foods and Food Lion as well. Chapel Hill has a little bit of a buffer, as does Raleigh though Raleigh has Trader Joe's and Costco within a five minute walk.
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Re: Wegmans Woes in North Carolina

Post by mjhale »

Wegmans came to the DC area when Giant-MD was weak from the aftermath of the Ahold buyout. Wegmans had much nicer stores and better pricing than any of the mainstream grocers in DC at the time. The prepared foods selections including the serve yourself food stations and the subs were a big hit too as no one else in DC except Whole Foods was doing anything similar. Wegmans has retained its higher quality stores and good pricing over the years. I think their prepared foods have slipped a bit over the years though I haven't been in a Wegmans since the pandemic so I'm not certain what they are doing now. What has changed over the years in the DC area is the big increase in competition especially in Virginia. We now have a much broader array of competition including the hard discounters, Walmart Supercenters and avrious ethnic grocers. I was a Wegmans shopper mostly for the price. However I've moved to the discounters because I just don't need all the pomp and circumstance that is Wegmans when I can get similar pricing in easier (for me) to shop stores. Virginia is more conducive to Wegmans large store model as there were larger tracts of land and less hostile government policies than say in Montgomery County. Virginia is moving more towards transit oriented and built up as opposed to out development. Wegmans now open Tysons store and the under construction Reston store are both on the first floor of large multi-use buildings. I have to wonder if the growth in competition as well as people not feeling like Wegmans is that special anymore or just not wanting to shop in a "Disneyland" type grocery store have led to some of their woes. Time and priorities change. Maybe more people just want the groceries without the "show" now.
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Re: Wegmans Woes in North Carolina

Post by Romr123 »

Not wanting shoppertainment...that may be getting at something. Back in '95-'97 when Byerly's made their (short-lived) entrance into Chicago, I would frequently head over there on a Friday evening for dinner and some grocery shopping on my way home from work (if not going out or doing something else). The thought of that now...not so much.
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Re: Wegmans Woes in North Carolina

Post by mbz321 »

mjhale wrote: March 31st, 2022, 6:05 pm I have to wonder if the growth in competition as well as people not feeling like Wegmans is that special anymore or just not wanting to shop in a "Disneyland" type grocery store have led to some of their woes. Time and priorities change. Maybe more people just want the groceries without the "show" now.
Along with that, with inflation rising, people are looking to curb their spending. While Wegmans has very good everyday dry grocery (and key basic perishable item) prices (prices that rival even Walmart and Aldi comparing store-branded items), their money is obviously comes from their higher end products and convenience foods, which have gone up and up over the years. I haven't been in a Wegmans in probably a year, but the prepared foods, especially from the self-serve food bars, were pretty astronomical. And yes, being a 'Disneyland' type store makes it harder for those to make it their 'everyday' grocery store unless they happen to live right around the corner (a lot of Wegmans stores seem to be built near housing within walking distance, but what about every else that passes other grocery options where they can grab the basics and get in and out quickly?).
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