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September 02. 2013 9:25PM

Closed stores create vacuum across state


The Shaw's Supermarket on South Willow Street closed its doors Monday. (JOSH GIBNEY/UNION LEADER)

With hundreds of thousands of square feet of empty retail space opening up across New Hampshire following the closure of Shaw's and Stop & Shop supermarkets around the region, residents, state and local officials are left staring at empty storefronts wondering what will replace them — and when.

"I don't think it will be long until we get someone," said Manchester Mayor Ted Gatsas. "People know that Manchester is a vibrant, exciting community, and they want to be a part of it."

Stop & Shop Supermarkets last month announced plans to close all six grocery stores and three gas stations in New Hampshire, laying off 670 employees.

The Stop & Shop closings left behind vacant retail spaces at 7 Kilton Road, Bedford; 9 Wason Road, Hudson; 137 Portsmouth Ave, Exeter; 601 Nashua St., Route 101A, Milford; and two properties in Manchester, at 777 South Willow St. and 365 Lincoln St.

Shaw's Supermarkets was scheduled to close six of its 34 grocery stores in the Granite State by Monday, at the following locations: 270 Lafayette Road, Seabrook; 553 Mast Road, Goffstown; 375 South Willow St., Manchester; 75 Laconia Road, Tilton; 250 Plainfield Road, West Lebanon; and 354 Winchester St., Keene.

Retail experts say landlords shouldn't have too much trouble filling the vacant space with national tenants, even if that means dividing the large retail spaces to make them more attractive to smaller stores.

"It's not wise for big-box stores to keep expanding unless they offer something the competition can't, or won't," said Kusum Ailawadi, Charles Jordan Professor of Marketing at the Tuck School of Business at Dartmouth. "For a while, everyone was trying to go big. Retailers are finding that didn't work."

State officials caution that just because a property is empty doesn't mean rent isn't being paid.

"A store closure may have a lot of dynamics," said Christopher Way, interim director of the state's Division of Economic Development. "Perhaps the owners are in a long-term lease and must continue to pay on that lease. In which case, there is no incentive for a landowner to seek a new tenant."

Ultimately, the market determines future tenants of retail property.

"Who goes where is determined by companies who see the space as a place where they can go in, meet a need and be profitable," said Way.

New neighbors are exactly what owners of businesses located in plazas where supermarkets once stood are hoping to see.

"It's a bad situation when a large anchor tenant is no longer drawing foot traffic," said Thomas Farrelly, executive director at the commercial real estate firm of Cushman & Wakefield in Manchester.

"No one likes to see an empty storefront, but I doubt that whether or not a supermarket is in a plaza will affect someone's decision where to go for a pizza, or a haircut," said Gatsas.

State and local officials have already begun efforts to fill the empty plazas at several locations.

"The state does not generally recruit for retail," said Way. "That said, we have introduced parties interested in specific sites, so they can work together on finding a tenant for available space. Some towns have taken a lead in trying to fill the closed grocery stores."

In Exeter, the future of the Stop & Shop site on Portsmouth Avenue has been discussed by residents and officials alike. Town Manager Russ Dean said the town's Economic Development Commission and Board of Selectmen are contacting companies such as Market Basket, Trader Joe's and Wild Harvest.

"The one name I keep hearing here in Manchester that people want to see here is Trader Joe's," said Gatsas. "We've reached out to some companies. I don't want to discuss who right now so we don't jinx things, but we have had discussions about the spaces."

John Dumais, president of the New Hampshire Grocers Association, said all six Stop & Shop sites should quickly attract new businesses.

"I don't think these sites are going to be vacant for long," said Dumais. "It could be an independent store, an existing store that moves from elsewhere in the state, but there's interest in the sites."

pfeely@unionleader.com



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