Retailers Still Unwrapping Big-Box Stores in Twin Cities

Love them or hate them, the rise of the discount “super store” continued to be one of the main themes in Minnesota’s retail scene over the first half of the year.

The Compass Report by Cushman & Wakefield/NorthMarq said that in a retail market still buffeted by a lack of consumer confidence, high vacancies and negative absorption, new mega-stores from the cash-laden likes of Wal-Mart, Menard’s and Costco are continuing to come online, with plans for more in the works.

The report notes that while some big-box retailers, including Best Buy, are shrinking the size of their stores and subleasing space to smaller retailers, that’s not always the case. A prime example is Wal-Mart, which will open a 182,000-square-foot Supercenter at the former Brookdale Mall site in Brooklyn Center next month. The Arkansas-based retailer has one Supercenter already under construction in Blaine and another in the northern suburb ready to go, with construction on other stores underway in Burnsville, Lakeville, Princeton and St. Cloud. Two more have been proposed in Andover and Cottage Grove.

Not all have been warmly received. Proposals for Wal-Marts in Chanhassen, Roseville and Plymouth ran into stiff opposition. But with land prices depressed due to the recession and plenty of cash on hand, Wal-Mart continues to search the Twin Cities metro for prime locations, said Tricia Pitchford, senior director of brokerage services for Cushman & Wakefield/Northmarq.

“They’re being very opportunistic right now and aggressive in identifying sites,” she said, noting that Wal-Mart has focused on the metro area, while homegrown big-box stalwart Target Corp. turns its attention to expansion prospects in Canada and other U.S. markets.

“What both look for is opportunity,” Pitchford said. “Wal-Mart had been pretty quiet in our market for several years, and they had stayed in the outlying areas.”

Now, she said, “I think Wal-Mart really is stepping up and saying, ‘we can get into the market.'”

Wal-Mart isn’t the only retailer opening mega-stores.

Wisconsin-based merchandiser Menards “supersized” its one-story Eden Prairie location into a 235,000-square-foot behemoth last year, then did the same to what was a 125,000-square-foot outlet in Golden Valley. The company has a store under construction in Richfield and is planning to relocate its Apple Valley store, the Compass report noted.

Warehouse club Costco is following suit with a 144,000-square-foot store in Baxter, Minn., near Brainerd, and a 153,000-square-foot outlet in Rochester.

Cambridge Commercial Realty principal Dick Grones represented Costco in its two most recent efforts. He said the Issaquah, Wash.-based retailer remains in expansion mode because shoppers have become even more entrenched in their desire for the low prices and convenience such stores offer.

“Consumers became very value oriented during the recession,” he said. “They got used to shopping at those stores to stretch their dollars a little bit more. And even though the economy’s recovering nicely, they continue to shop there. ”

Pitchford agreed, adding that such stores help customers save time by expanding merchandise selections. “What’s really driving the rapid expansion of the Wal-Marts and the Targets,” she said, “is time constraints of consumers who need to do one-stop shopping.”

Star Tribune