King Kullen will permanently close its Riverhead location next Thursday, after announcing last month that it will not renew its lease in the shopping center where it has operated for more than four decades.
A new tenant for the site has been secured, said Neal Siegal of Brody Realty, which markets the center for owner Philips International. Siegal said he is bound by a confidentiality agreement and could not yet disclose the identity of the tenant or what kind of store it will be.
“Signs of new life will begin to appear there within three or four weeks” once King Kullen vacates the premises, Siegal said.
“It’s not a reflection on Riverhead,” Siegal said. “It’s a function of a changing of the guard in that industry.”
After King Kullen closes, the town’s residents will be left with only two full-service supermarkets: Stop and Shop and Best Yet, both located on Route 58.
Waldbaum’s closed its doors in Riverhead last month following the bankruptcy of its parent company, A&P. There were no bidders for the location during an auction and the building’s owner does not plan to rent the space to another supermarket.
“There’s just too many grocery stores in Riverhead,” said Jeremy Isaacs, a broker for the real estate agency that handles the shopping center where Waldbaum’s operated since 2003.
But it depends on what you define as a grocery store.
A surge of discount stores offering dry groceries and limited produce – as Walmart, Target, K-Mart and Big Lots have all begun to do in recent years – has eroded business at traditional full-service supermarkets, according to David Livingston, a supermarket analyst.
“These stores have large grocery departments, health and beauty departments and pharmacies,” Livingston said. “They may not have a bakery or a deli, but you’ll be able to buy all your basic grocery needs there.”
Then there are warehouse clubs like BJ’s and Costco, which offer bulk groceries at discounted prices but require memberships with annual fees. Aldi, a discount supermarket, opened on Route 58 last year but only offers store-brand merchandise.
When it comes to traditional full-service grocery stores, Riverhead is now down to just two.
“Stores like Wal-Mart are able to undercut the supermarkets on price, and they don’t have good jobs, union workers, salaries or benefits,” said Nicki Kateman, a spokesperson for the union representing Riverhead’s former Waldbaum’s location. “It’s definitely impacted the industry.”
Riverhead’s discount stores with grocery aisles don’t sell meat, and the produce selection is very limited.
But Livingston, who specializes in supermarket site analysis, says that a new grocery store will only come to town if it’s confident it can take on the competition.
About 10,000 people are needed to support a grocery store, he said. Riverhead has a population around 34,000, so with two full-service grocery stores and a variety of alternatives, it might not make sense for a supermarket to open a location here.
“If there’s too many stores, some always end up closing and going away,” Livingston said. “When sales at local supermarkets start becoming excessively high, it’s probably time for a competitor to move in.”
But with so many options for basic groceries in Riverhead, he said, “Nobody is going to have to worry about overpaying for groceries.”
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