Virginia is for discounters: new stores invading Richmond

Discount Store News, July 17, 1995 by Teresa Andreoli

RICHMOND, VA. - This conservative and historically rich city is being invaded by discounters. In the past year, Baby Superstore, Hills Stores, Borders and Barnes & Noble Superstores have staked out territory here.

In addition, Hannaford Bros., a major Northeastern supermarket chain, has announced an imminent invasion. Wal-Mart said it will convert at least one of its four Richmond stores into a supercenter. And local retail observers expect two fast-growing Minneapolis-based retailers, Target and Best Buy, as well as the No. 1 sporting goods chain, The Sports Authority, to attack the market in the near future.

Another probable Richmond invader is Northeastern discounter Caldor, which, like Target, is opening several units in the Newport News-Hampton, Va., area.

From sporting goods chains to supermarkets, the retail industry has developed an almost frantic interest in serving the 290,000 households living downtown and in the three surrounding counties of Richmond. The demographics are strong - the suburban population has exploded during the past 10 years, the residents are well-educated, highly salaried and most own homes.

The current number of households in the surrounding counties of Chesterfield, Hanover and Henrico (203,000) rose 42% during the past 10 years or so, according to the Richmond Times Dispatch and Sales & Marketing Management. According to a Richmond-Petersburg metropolitan statistical area survey, 55% of the residents have some college education, 61% of the households earn $35,000 or more annually and three-quarters identified themselves as homeowners.

"People are moving to the counties," said Chris Wilkes, manager for Richmond Sports, a division of the No. 2 national sports chain, Sports and Recreation, Tampa, Fla. Richmond Sports opened two 50,000-sq.-ft. units on two of the busiest retail strips that straddle the city: Broad Street and Midlothian Turnpike.

"New homes and new businesses bring opportunities to this market," Wilkes said, pointing to the western side of town, where Circuit City's corporate headquarters is based.

"Motorola's new plant is another example of new industry moving in," Wilkes said.

The influx of new families naturally drew Baby Superstore, the Greenville, S.C.-based kids stuff discounter that hit Richmond in the second half of 1994. "The market meets the basic demographic profile, and the store so far is ahead of plan," said spokeswoman Jodie Drury.

National sports chains have also pounced on the booming area. "In the last year or so, major sporting goods companies, such as Richmond Sports, have obliterated four or five of the local chains, almost overnight," said Bill Coyner, president of the Virginia Retail Merchants Association, Richmond.

More evidence of this displacement occurred in the discount department store segment.

Hills, the Canton, Mass.-based chain pulled into the area last October with one site on the north side of town (Parham Road) and one on the heavily trafficked, south side Midlothian Turnpike. Hills has since sprawled to the other regions of the state (Newport News and Chesapeake), in March, and three more stores are slated before yearend, the company announced.

Wal-Mart, with four units in the Richmond market, plans to beef up its presence. The Times-Dispatch reported that all four area Wal-Marts would be converted into supercenter formats, but DSN could verify that only one unit located on Broad Street, the retail strip that runs across the northwestern side of the city, would convert to a supercenter next year.

Kmart, with seven units in the area, has not announced further store plans.

Although Target has announced plans for a Super Target in the Hampton Roads/Newport News area of Virginia next year, the Minneapolis-based upscale discounter has not confirmed plans to open in Richmond.

Specialty retailers are not immune to the pull of Richmond. Book chains can't keep away from the highly educated market. Borders, the former Kmart division, opened its first area superstore on West Broad Street in May.

Dan Conetta, vp marketing for Borders said, "Through demographic data, we found its population is comprised of what we determined are book and music lovers. The store is doing well, slightly better than expected," he said.

Borders is located a far stone's throw from Circuit City's offices, where across the street construction has begun, presumably, on a new store. Although rumors swelled that Best Buy had an option on the land, a spokeswoman told DSN it had no immediate plans to go into Richmond.

Lisa Herling, vp of corporate communications for Barnes & Noble, which opened its third superstore here in April, said, "We received a strong response from the community when we looked for markets that can support that size store [30,000 sq. ft.]. The demographics are strong, location is critical and college education is a big factor," she added.

Area supermarkets should prepare for tumultuous times, as the Wal-Mart Supercenter and Scarborough, Maine-based Hannaford Bros. jump into the region. Hannaford, a dominant player in New England, plans to open at least five stores before yearend.