In addition to Jeff Metzger’s monthly column, “Taking Stock,” he will periodically offer his unfettered take on breaking news stories in the industry. In this opinion piece, he offers his perspective on the uber-merchant’s unique opportunities with its newly announced second New York City store.
At first blush, I was a bit surprised to learn that Wegmans will be attempting its second foray into the Big Apple. Not that its first NYC location in Brooklyn, which opened in October 2019, was underperforming. Far from it. However, the costs related to the opening of that 74,000 square foot store were the most expensive in the history of the 105-year family-owned company and for that reason alone, I thought the Wegman family would steer clear of pursuing new store opportunities in the city that never sleeps. Adding more stores in the Research Triangle of North Carolina (or even expanding into Charlotte) and debuting in Washington DC and in Delaware (both in 2022) seemed a more logical path for the high-volume merchant.
However, the reality of being able to grab such a great location coupled with a key learning that occurred during the pandemic likely changed Wegmans’ view of operating in the most expensive market in the country.
About the learning – four months after the Brooklyn store opening, the realities of COVID-19 began to impact us all. However, residents of the five boroughs of New York City were likely even more affected. The city, which relies so much on public transportation, was in full lockdown. So, while most retail stores remained open, the number of direct visits and the ensuing hoarding/panic buying was significantly less there than in most other areas of the country except for online business, which spiked significantly, including at Wegmans. Perhaps surprisingly, that Brooklyn store became Wegmans’ top e-commerce performer and has remained so 17 months later. Look for the new Manhattan store to also produce dynamic digital revenue.
About the location – the space that Wegmans will occupy is the former Kmart store on Astor Place (770 Broadway) in Manhattan’s Greenwich Village. Under the terms of the 30-year lease, made with real estate giant Vornado, Wegmans will occupy space on both the street and lower levels for a total of approximately 82,000 square feet (Wegmans first signed an agreement with Kmart’s parent firm, Transformco, to buy out the lease and then entered into its agreement with Vornado). The store is slated to open in the second half of 2023.
Anecdotally, I was in Manhattan last weekend (July 24-25) and walked past the Kmart location which had recently closed. My son, who now lives in Los Angeles but used to reside not far from that store, noted that “it was the worst store he had ever visited.” Another source told us he had visited the store in late June when it was still open and stated that there were no other customers in the store. None!
“We are so excited to bring Wegmans to Manhattan. This is something we’ve been dreaming about and working toward for a long time,” said Colleen Wegman, president and CEO of Wegmans Food Markets. “The community’s response to the opening of our Brooklyn store had an excitement and energy that you can only experience in New York City. You can feel that energy returning to the city, and we are thrilled to be a part of it.”