The town of Waukesha will once again soon find itself in the same predicament the city has faced: finding a tenant for a relatively new supermarket building along a key highway.
In fact, the two buildings sit side by side along Highway 164 between Coral Drive and Arcadian Avenue.
On the city side, the former Jewel-Osco/Sentry building near Arcadian has sat vacant for eight years. No interested party has shown any interest, despite the fact that the building is only 13 years old with only about five years of use.
Now, the 42,000-square-foot Walmart Neighborhood Market in the town just to the north will be shuttered among the 269 stores Walmart plans to close. The medium-format store, which is consderably smaller than the five-year-old Walmart supercenter store on West Avenue on the city's southside, was built in 2013 on the site of the original Waukesha Walmart off Coral Drive. (A secondary phase of outlet developments on the town site has yet to materialize.)
Nevertheless, town of Waukesha chairman John Marek is confident in his site's long-term viability.
"It's pretty obvious it's a great retail corridor," Marek said. "It has huge traffic counts and the visibility from the highway makes it very attractive. That shows in that not once but twice Walmart built there."
Too many Walmarts?
Wal-Mart announced on Friday, Jan. 15 the Waukesha store is one of four Wisconsin stores closing at the end of the month. The other three include a Walmart store in Milwaukee, and neighborhood markets in Wauwatosa and Menomonee Falls.
Of the 154 U.S. stores closing, 102 are the company's smallest format stores, Walmart Express, a pilot venture since 2011. Doug McMillon, president and chief executive officer of Wal-Mart Stores, said the company is instead focusing on strengthening its supercenters, optimizing neighborhood markets, growing the e-commerce business and expanding pickup services for customers.
According to the company, more than 95 percent of the stores that are closing are within 10 miles of another Walmart. The neighborhood market, S14-W22605 Coral Drive, is approximately four miles from a Walmart Supercenter, 2000 S. West Ave.
"The decision to close stores is difficult and we care about the associates who will be impacted," McMillon said. "We invested considerable time assessing our stores and (Sam's) Clubs and don't take this lightly. We are supporting those impacted with extra pay and support, and we will take all appropriate steps to ensure they are treated well."
McMillon said the hope is to place the impacted associates in nearby locations. Where that isn't possible, he said, the company will provide 60 days of pay and, if eligible, severance, as well as résumé and interview skills training.
Competition growing
When the neighborhood market closes Jan. 28, it will mark another grocery store that hasn't survived in a changing supermarket landscape in Waukesha.
In addition to the former Jewel-Osco/Sentry store, which closed in 2008, a Pick 'n Save on Moreland Boulevard closed in October. That store was adjacent to a much larger Woodman's Food Market, which opened in 2013 at 1600 Main St.
And a new Meijer supercenter, which will sell everything from groceries, clothing and home merchandise, is set to open later this year at Tenny Avenue and East Sunset Drive.
The trend suggests size matters. Woodman's is 240,000 square feet, Walmart's supercenter is 185,000 square feet and Meijer will be 192,000 square feet. (Perhaps not coincidentally, all three stores operate or will operate 24 hours a day.)
Walmart's neighborhood store concept, which began in 1998, runs counter to that trend — which at the time it opened 26 months ago was one of its selling points.
When Waukesha NOW asked the manager of the Walmart Neighborhood Market about the competition in the grocery market business before his store opened in November 2013, he was optimistic in his store's model.
"We're designed specifically for convenience," then-store manager Lee Spude said. "So this store is designed so a customer can come in, get the groceries they need, they can get the pharmaceuticals they need, they can get the health and wellness (products) they need, pet food, all the stuff that the customers need — not necessarily what they want — but what they need.
"It's designed to (be) a very quick shopping experience. They don't have to walk across a huge store to get from one section to the other. It's designed specifically for a quick and easy shopping experience and a quick and easy check out."
Different jurisdictions
Another potential problem for the revitalization of the Walmart Neighborhood Market and the former Jewel-Osco building is the fact that both properties, which are connected, are in two different jurisdictions.
Marek doesn't see this as an issue for the Walmart site in the town.
"From the town perspective, it's easier for a developer to work with us because the city has multiple layers and more staff approvals" to deal with, Marek said.
According to Community Development Director Jennifer Andrews, the city views the former Jewel-Osco/Sentry location better suited for industrial purposes. The lot had been developed while it was still under the jurisdiction of the town of Waukesha, which zoned it for commercial use. However, it was soon annexed into the city.
Annexations can only happen if the owner of the property requests it. Walmart owns the town site, Marek said.
In order for traffic to enter the former Jewel-Osco building, drivers must use the town's Walmart parcel off Highway 164.
Regardless of what the city's opinion is on the property, Marek knows what he wants for the site.
"I'm confident a retail outlet will move in there," Marek said.