Kroger Co.’s vice president of corporate real estate discussed the grocery giant’s plans for urban stores.
Nick Hodge, who joined Kroger (NYSE: KR) in 2001 and moved into his new position in August 2015, discussed the Cincinnati company’s real estate moves at the University of Cincinnati Real Estate Roundtable on the State of Retail that was held Friday morning at Kenwood Country Club.
“The business has changed dramatically in 15 years,” Hodge told the crowd.
One of those major changes is reurbanization. With Kroger’s recent acquisitions of Harris Teeter and Roundy’s, which operates Mariano’s in Chicago, the company is gaining not just additional stores but the operational expertise of running stores in urban areas.
“Clearly, we want to be an urban player,” Hodge said.
There has been a lot of talk about a new grocery store in downtown Cincinnati, but nothing has come to fruition, yet. Hodge said he couldn’t talk specifically about the downtown Cincinnati market but continued the Kroger line that it wants to open a new store in the area.
Hodge said there are a lot of costs that go into urban developments. Kroger is constantly monitoring the situation, looking to get in at the right time, before real estate values go up but after there are enough customers to warrant a location.
“We will do it when it’s economically viable,” Hodge said. “It’s a balance.”
One of the keys to an urban store is making sure the structured parking is safe and secure, Hodge said. Kroger opened a King Soopers grocery store in downtown Denver last summer. The nearly 46,500-square-foot store is on the ground level of a five-story luxury apartment building near Coors Field. That store has 86 free parking spaces for customers.
Kroger also announced a similar store in Atlanta. There, a 60,000-square-foot Kroger will be part of 725 Ponce, a $140 million project that includes a 12-story office building along the Atlanta Beltline, which is experiencing revitalization, according to Business Courier sister publication the Atlanta Business Chronicle.
Overall, Hodge said Kroger’s residential partners have been very happy with leasing units above the grocer’s stores.
“In urban settings, apartments or condos really seems to be working well,” Hodge said.