A food fight is breaking out here in Massachusetts, and not a moment too soon for a state with some of the highest grocery bills in the country.
Entrenched locals like Stop & Shop and Market Basket are bracing for an onslaught of competition from Wegmans, the New York-based powerhouse known for its knockout combo of low prices and killer customer service.
But if the supermarket wars are good for shoppers, they may be even better for builders with ambitious dreams for innovative new projects. As they jockey for position, the big chains are helping to spark a development renaissance along the Route 128 and I-495 corridors, in the suburbs and even in Boston.
Shaking Things Up
Whether or not they admit it, the big boys and girls who have dominated the Bay State’s supermarket landscape for years now have got to be running scared.
Stop & Shop, Market Basket, Big Y and Shaw’s have effectively split up one of the most lucrative markets in the country; Greater Boston is one of the wealthiest metro areas in the U.S. Whole Foods is nice, but, like Roche Brothers, it serves a narrower, upscale niche.
Sure, there’s always been some competition, but it’s fairly restrained. The big chains, whether by accident or design, have effectively divvied up various towns and sections of the state.
But the Wegmans invasion is about to scramble all of that. The New York grocery giant has thrown down the gauntlet, opening three stores along Route 128.
That comes after Wegmans’ big Massachusetts debut in 2012, when it opened its store out past 495 at Northborough Crossing. The opening drew such a crowd that traffic was jammed up on local roads for 45 minutes.
Wegmans first appeared on Route 128 six years ago in 2008, when it was part of the first proposal for the University Station project just off the highway, with initial plans for a 2011 opening. The earlier version stalled out, with a new set of developers taking over University Station and reviving the Wegmans plans in early 2012.
Wegmans has made no bones about the fact that it is here to compete, with one executive recently ridiculing a local chain’s reliance on gimmicks like “gas points” to mask higher prices.
The chain actively monitors the prices of its competitors, hiring a company to keep tabs, Jo Natale, a Wegmans spokeswoman, told me in a recent interview.
“Our prices are lower than other supermarkets, and competitive with club stores,” she said.
Market Basket is about to open a “flagship” store along one of the most high-profile stretches of 128, at the old Polaroid campus in Waltham, since leveled and cleared to make way for a major new development.
But this is much more than a case of dueling grocery stores. Rather, the stores are becoming anchors for major new projects.
Sparking New Development
Sure, it’s a big shift from the old days, when developers built their major new shopping attractions around the department stores and later the big boxes. But the mainstream retail business isn’t the development driver it used to be, especially with the rise of the Internet.
Just take Newton developer Steve Karp, who has made fortunes building and selling upscale malls like the CambridgeSide Galleria. These days he’s building his projects around supermarkets, and Wegmans in particular.
Karp’s New England Development introduced Wegmans to Massachusetts, making the store the centerpiece of his Northborough Crossing development. Karp was richly rewarded, with 27,000 shoppers flooding the new Wegmans its first day – a chain record.
Now Karp is betting big on a repeat or two, starting with a Wegmans due to open at the end of this month, the centerpiece of his new Chestnut Hill Square development on Route 9, which features restaurants, medical offices and a health club. Another Wegmans is slated to take shape at University Station, a mega-development just off Route 128, whose lineup includes hundreds of new condos and apartments, a hotel and office space.
Meanwhile, Nordblom Cos. has made a new Wegmans the showcase of its plans to for developing Burlington’s Northwest Park, a major office park just off 128.
The new store will overlook a redeveloped 3rd Ave, a “restaurant row” of hip eateries leading up to the supermarket.
Market Basket’s plan to build a “flagship store” along 128 in Waltham rounds out the picture.
Market Basket’s strength certainly isn’t store aesthetics, but rather significantly lower prices for basic foodstuffs. Its stores are clean, but dull. But based on the renderings, this Market Basket is a cut above any I’ve seen, with a flower-fringed, outdoor café planned for Markets Kitchen, its prepared foods section. (Wegmans has made prepared foods a major draw, with enough staff to run a major restaurant doing the cooking.)
There are also plans for a town green in front, with a bocce court, benches and other attractions patterned after Boston’s highly successful park at Post Office Square.
The new flagship Market Basket is serving as an anchor for the first phase of developer 1265 Main Street’s redevelopment of the 119-acre Polaroid site. The plan calls for more than 1.2 million square feet of office, retail and restaurant space when it is finally built out.
Boston Next?
Here’s hoping the supermarket wars bringing competition and new development to the suburbs spread to our state’s economic engine and capital city.
The suburbs look like a supermarket paradise compared to Boston, large sections of which are not served by any major chains.
Steve Samuels, the developer planning an expansion of the Landmark Center in the Fenway, has made a Wegmans a major piece of his project. However, Wegmans will find far few competitors in Boston than it will in the suburbs. There are no Market Baskets in the city – and no Walmarts, which sells lower-cost groceries, but has been a controversial prospective presence in some cities.
Bring on the supermarket wars, and let the development roll!
Email: sbvanvoorhis@hotmail.com
