Houston Developer On Randalls Shutdown: 'You Look Around, And You’re The Only One In The Aisle'
If there was one person who was not stunned by the shuttering of three Houston-area Randalls locations, it was Ed Wulfe, the founder and CEO of Wulfe & Co., the Houston Business Journal reports. The grocer is closing low-performing stores in Montrose, Sugar Land and The Woodlands by Dec. 1.
The relationship between Houston-based Wulfe & Co. and Randalls dates back to 1989 when the grocer became a tenant at one of Wulfe's early properties, the HBJ reports. Randalls inked a 128K SF lease for its fourth store in Houston at 2705 Westheimer Road. Back then, Montrose was an underserved grocery market and the city was recovering for the oil downturn of the mid-1980s.
"We're not surprised. They have been struggling as a supermarket for some time now and not producing sufficient sales," Wulfe said, adding the Montrose location used to be one of their best stores in the city.
Between the revamped in-store experience and online purchasing options, Wulfe said Randalls' parent company, Albertsons, lacks a plan to stay competitive. The Idaho-based grocer acquired Randalls and Californa-based Safeway in a $9.2M deal in 2015.
"You look around, and you’re the only one in the aisle," Wulfe told the HBJ regarding Randalls. "I don’t know what their game plan is, but I can’t believe [Safeway] made their investment in Randalls without a game plan on how to approach marketing and merchandising in this environment."
The Randalls closure introduces a redevelopment opportunity within the Inner Loop. The revitalization of old shopping centers, gas stations and industrial buildings is a growing trend within the corridor as land prices continue to rise and the number of open land plays dwindle. The centralized location and access to entertainment-driven retail make this an alluring location.
There are several possible uses for the property, including a liquor and wine store, a high-end furniture store, a fitness operation or it could be divided up to house several retailers, Wulfe said.
While many companies are opening distribution centers in Houston, Randalls closed its 700K SF distribution center in Houston, consolidating those operations at its center in Dallas last year. The Houston facility sold to an undisclosed buyer in March.
Randalls entered the Houston market in 1966. The stores that will shut down include 2075 Westheimer Road in Houston, 5800 New Territory Blvd. in Sugar Land and 9420 College Park Drive in The Woodlands. After the latest closures, there will be 17 Houston locations.