Discount grocers are expanding throughout Jacksonville, with Save-A-Lot expected to open in two former Food Lion stores in North and West Jacksonville as well as in one in St. Augustine.
Save-A-Lot, a subsidiary of grocery giant Supervalu Inc., joins Walmart Neighborhood Markets, Dollar General and Family Dollar, among others, in expanding its Northeast Florida presence.
Save-A-Lot and Walmart, along with Rowe’s IGA Supermarkets, have been leasing or scouting locations that include the former Food Lion locations.
The parent company of Food Lion announced in January it was closing its 113 Florida stores, including 20 in Northeast Florida. A dozen are in Duval County.
Since then, other grocers have stepped in to lease the spaces.
According to sign permits issued the past two weeks by the City, Save-A-Lot plans to operate at Food Lion locations at 5751 N. Main St. and 7200 Normandy Blvd.
Save-A-Lot spokeswoman Chon Tomlin said Monday the two Duval County stores, in addition to a store in St. Augustine at 2469 U.S. 1 S., would open in November.
“Florida continues to be a growth area for Save-A-Lot as we continue to look for opportunities in which our model is a perfect fit for the communities seeking fresh grocer options at great prices,” she said in an email.
Tomlin said she did not have specific information on the former tenants of the existing or future Save-A-Lot locations, but she said the company did not have any agreement with Food Lion to occupy buildings.
However, the three sites are former Food Lion locations in shopping centers that are owned by other investors.
“Our selection of those locations was solely based on our real estate standards regarding communities ideally suited for the Save-A-Lot model,” she said.
She said each location hires 20-25 full- and part-time employees. “In addition to bringing new jobs, we’re also proud to source those new associates directly from the communities of our new stores,” Tomlin said.
To summarize the latest expansions of discount stores in Duval County that sell groceries:
• Save-A-Lot has nine Northeast Florida stores, including seven in Duval County, according to www.save-a-lot.com. It plans two new stores in Duval and one in St. Augustine. Save-A-Lot stores average 15,000 square feet in size, according to the company.
• Family Dollar has 43 stores in Duval County and plans are under review for at least two more, including the current site of Warren Motors at 233 E. State St. and a location in Arlington at 1612 St. Johns Bluff Road N. The stores average 7,100 square feet of selling space.
• Dollar General operates 25 stores in Duval County and plans another at 7700 Merrill Road, where the former BuddyFreddys buffet restaurant was razed. Dollar General stores average 7,200 square feet in size.
• Wal-Mart Stores Inc. is considering at least two Walmart Neighborhood Markets in Duval County and possibly several more. Wal-Mart Stores Inc. is considering former Food Lion locations in Arlington at 8011 Merrill Road and in Mandarin at 10550 Old St. Augustine Road, according to City documents. Sources have said the company is considering opening five to nine Neighborhood Markets in Northeast Florida. They average 42,000 square feet in size.
Meanwhile, Rowe’s Supermarkets leased the 6765 Dunn Ave. Food Lion store and is interested in a few more outside Duval County. It is the company’s third store and owner Rob Rowe plans to open a fourth at the end of August in a former Food Lion along Wells Road in Orange Park.
Jacksonville economics professors say the discount stores are attracted by the economy.
“When the economy is weak, people spend their money more frugally, so discount stores and stores that sell necessities do better,” said Paul Mason, University of North Florida Coggin College of Business economics professor.
Mason said another factor in the growth of discount stores is that people without jobs might start small businesses, such as dollar stores.
“I don’t think Jacksonville is unique with these stores opening up,” he said.
Carol Dole, associate professor at the Jacksonville University Davis College of Business, said the popularity of the stores was easy to identify.
“Very briefly, it’s the economy. They’re addressing that segment of the labor force that is being hit harder with unemployment,” Dole said.
“I suspect these firms’ research shows that shoppers are looking for deals and that the firms can have low enough costs to compete with” retailers such as Publix Super Markets and Target Corp. stores.
She also said the sizes of the smaller stores might make zoning easier. They also can “capture those shoppers inside a neighborhood where transportation can be an issue.”
Save-a-lot.com says there are 1,300 Save-A-Lot stores nationwide in urban, suburban and rural areas. It describes itself as “the nation’s leading extreme value, carefully selected assortment grocery chain” that delivers groceries at up to 40 percent off prices at conventional grocery stores.
The company said it serves more than 4 million shoppers each week.
According to the company, it distributes a “carefully selected assortment” of foods and household items, emphasizing its exclusive brands.
Supervalu is based in Eden Prairie, Minn. In its annual filing in April with the Securities and Exchange Commission, the company reported that it owns 397 “hard-discount” food stores operating under the Save-A-Lot banner and licenses an additional 935 Save-A-Lot stores to independent operators.
The Jacksonville locations are corporate stores, Tomlin said.
Supervalu described Save-A-Lot as one of the leading retailers in the U.S. hard-discount grocery-retailing sector.
Save-A-Lot food stores stock primarily custom-branded high-volume food items, generally in a single size for each product sold, it said.
Tomlin said the company does not release the investment costs to renovate the individual stores, but said “each location is carefully inspected and remodeled according to our national brand standards.”
The SEC filing said Supervalu also has 1,102 traditional retail food stores, which range in size from 40,000-60,000 square feet and operate as Acme, Albertsons, Cub Foods, Farm Fresh, Hornbacher’s, Jewel-Osco, Lucky, Shaw’s, Shop ’n Save, Shoppers Food & Pharmacy and Star Market.
Albertsons formerly operated in Jacksonville and Rowe bought several for his company. He sold most but retained one as a Rowe’s Supermarket at Blanding Boulevard and 103rd Street.
Supervalu’s commission filing also talked about consumer confidence.
“All of the company’s store locations are located in the United States making its results highly dependent on U.S. consumer confidence and spending habits,” it said.
“The U.S. economy has experienced economic volatility in recent years due to uncertainties related to higher unemployment rates, energy costs, a decline in the housing market, and limited availability of credit, all of which have contributed to suppressed consumer confidence,” it said.
“Consumer spending has declined as consumers trade down to a less expensive mix of products and seek out discounters for grocery items,” it said.
Dawn Lockhart, president and CEO of Family Foundations of Northeast Florida, a nonprofit that provides credit counseling and other services to consumers, said she didn’t know the details of why more of the smaller discount stores are opening in the area.
“They do have good deals and sadly, we have a rising poverty rate in Jacksonville,” she said.