The news this week that Wegmans will open a new store in what was the Kmart on Astor Place in Manhattan says so many things about the state of retailing circa 2021 that it’s hard to even figure out where to start.
But start first with the facts: Wegmans Food Markets, the upscale supermarket chain out of the Northeast and a company trying to expand its New York City footprint from its single existing unit in Brooklyn, will open an 82,000-square-foot location in 2023 that will put it front and center in the downtown Greenwich Village and East Village neighborhoods of Manhattan. The previous tenant of the space, Kmart, just shut its doors only a few weeks ago after occupying the space for about 25 years.
Those are the facts and, as Kevin Bacon said in A Few Good Men, they are undisputed. But if you can handle the truth there is so much more to this story:
• To begin with, this transfer further cements the role that the grocery channel remains the most stable and enduring business of physical retailing. Yes, online shopping for food and household goods increased during the pandemic but Americans — even that mutant strain known as New Yorkers — will continue to buy these products in physical stores. General merchandise will continue to lose market share to e-commerce but the process will be much, much slower when it comes to supermarkets.
• The old retail adage about “location, location, location” remains as relevant and powerful as ever. Wegmans chose a valuable, high-profile property that bridges two important demographic neighborhoods; and with the number of options that suited its needs on size, facilities and, of course, location, the choices were far more limited than you might think. Say what you want about putting stores on the fringes of residential neighborhoods, being right smack dab in the middle of them still is by far the best way to go.
• Any talk of the demise of urban living — and urban shopping — can be tossed aside with this Wegmans’ move. It validates the premise that younger generations (and older ones too who don’t want to move) are going to continue to choose living in a big city as opposed to the suburbs, small towns and all points in between. Young families with kids or about to have kids will go that route — as they have for every generation since the end of World War II — but anyone thinking this was the beginning of the end of urban destinations like New York City needs to rethink that theory.
• Retailing is continuing to evolve and new formats and business models are always going to come along and shake up the marketplace. When that Kmart store originally opened it was a breakthrough on the retail scene. Along with its Midtown counterpart, this represented the first true time a national discount chain had opened in Manhattan, previously believed to be an impossible setting. But with multi-level floor plans and access to mass transit — both stores had entrances from public subway or commuter railroad platforms — the stores disproved the theory and were believed to be outstanding performers back in the day when Kmart was still Kmart.
Wegmans is playing a similar role in retail today, an upscale supermarket chain with strong customer service and extensive prepared food options, placing it a cut above the typical grocery chain and any number of cuts above the cramped, convoluted supermarkets of Manhattan. Whole Foods proved a national chain with a better pedigree could make it in Manhattan and now Wegmans will take it to the next level.
Forbes.com, by Warren Shoulberg
