Pittsburgh grocer jumping into Indy market

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A major supermarket chain is hoping to expand into the Indianapolis market, starting with an anchor position in a mixed-use project under construction in Carmel.

Pittsburgh-based Giant Eagle wants to build a 125,000-square-foot store at The Bridges development on 116th Street between Illinois Street and Springmill Road as the first of at least six stores in the market, local real estate brokers said. The chain’s arrival would make it the first mainline grocer to enter the market in several years and would crowd an already competitive local grocery segment.

“The brokers that have been working with [Giant Eagle] have been looking at sites,” said Frank Swiss, principal of local Swissco Real Estate. “I’m sure they would have proceeded earlier, but we’re just coming out of this [economic] tsunami.”

giant-eagle-factbox.gifA spokesman for Giant Eagle said the company does not comment on potential deals until a lease is signed.

“Giant Eagle Inc. continually evaluates opportunities to bring our world-class shopping experiences to new customers with a focus on providing fresh foods, value and convenience,” the spokesman wrote in an emailed statement.

By entering the Indianapolis market, Giant Eagle would mostly compete with traditional groceries operated by locally based Marsh Supermarkets and Cincinnati-based Kroger Co. But on a broader scale, the company’s interest in Indianapolis illustrates the grocery industry’s growing attraction to the market, particularly among the upscale sector.

Fletcher, N.C.-based Earth Fare, which has stores in Carmel and Noblesville, filed plans this month to renovate 25,000 square feet formerly occupied by OfficeMax at 2110 E. County Line Road on the city’s south side.

Also on the south side, Phoenix-based startup Fresh Thyme Farmers Market said last month that it plans to rehab 30,000 square feet of space vacated by The Room Place at 8750 U.S. 31. Brokers say Fresh Thyme is also targeting space at 4225 E. 82nd St. near Keystone at the Crossing formerly occupied by a Lifestyle Family Fitness.

Developers of The Bridges may have preferred an upscale grocer as well.

Swiss, a broker for Greensboro, N.C.-based The Fresh Market, said his client declined an offer from developers after concluding The Bridges site would be too close to existing stores on East 146th Street in Carmel and North College Avenue in Broad Ripple. The Fresh Market opened a third store earlier this year in Fishers.

Giant Eagle ties to Kroger

T.M. Crowley & Associates and Gershman Partners are developing The Bridges’ 62 acres along with Pittman Partners. Plans for the $100 million project call for 250,000 square feet of retail space, 500,000 square feet of office space, and 300 apartments.

Giant Eagle would join CVS at The Bridges, which would be Giant Eagle’s first location in Indiana.

Founded in 1918, the private company has 217 stores in Pennsylvania, Ohio, West Virginia and Maryland. It has roughly 36,000 employees when counting its GetGo convenience stores and reported revenue of $9.3 billion in fiscal 2011, the most recent year available.

Expanding into Indiana seems like a stretch to supermarket analyst David J. Livingston, who said he’s unaware of plans by Giant Eagle to compete in central Indiana.

“Indianapolis is a highly competitive market,” he said. “And it’s not like Indianapolis is some huge growth market.”

On top of that, Giant Eagle might have trouble separating itself from Kroger because it “doesn’t offer anything more compelling,” Livingston said.

The two companies have historic ties. After three families founded Eagle Grocery in 1918 and grew the business to 125 stores, they sold to Kroger in 1928. Three years later, those same families combined forces with what was OK Grocery to form Giant Eagle, according to the company’s website.

The publicly traded Kroger, meanwhile, has grown into the country’s largest supermarket chain, with more than 2,400 stores nationwide. About 50 of those are in the Indianapolis area.

giant-eagle-map.gifKroger spent $72 million in 2012 on renovations in its central division–which includes more than 130 stores, mostly in Indiana and Illinois–to stay competitive and meet customer demands, according to a company report.

This year, it completed nearly $5 million in renovations to Indianapolis stores at 2629 E. 65th St. and at Linwood Square Shopping Center on East 10th Street.

Keeping pace with competitors is important but not a critical factor in the company’s decision-making, Kroger spokesman John Elliott said.

“We don’t worry about it, but we certainly pay attention to what our competitors are doing,” he said. “When it comes down to it, the most important consideration is what our customers expect of us.”

Walmart making play

Traditional grocers like Kroger and Marsh continue to get squeezed in the local market by big-box retailers such as Meijer, Target and Walmart, though Kroger seems to be holding its own.

Walmart is the largest grocer in the area, with a 31.8-percent share as of 2011, according to data from Chicago-based Stagnito Media, publisher of Progressive Grocer. No. 2 is Kroger at 28.5 percent. It’s followed by Marsh at 12.9 percent, Meijer at 10.5, and Target at 2.3.

Arkansas-based Walmart, however, is stepping up its game in Indianapolis by offering consumers an alternative to its cavernous supercenters.

It opened its latest Neighborhood Market in September at 5835 W. 10th St, with plans to open two more next year, at 5607 N. Michigan Road and 131st Street and State Road 37 in Fishers.

All told, Walmart would have five Neighborhood Markets in the Indianapolis area. The other two are at 8010 E. 38th St. and 3805 S. Keystone Ave.

Neighborhood Markets measure about 40,000 square feet, roughly a third of the size of a typical Walmart Supercenter and closer in size to the specialty grocers.

Among the most aggressive specialty players is Whole Foods, which is in the process of expanding its Nora store and is in line to open a 33,500-square-foot store in a $25 million mixed-use project proposed in Broad Ripple.

In addition, Flaherty & Collins Properties hopes to attract a specialty grocer to the ground level of the 28-story tower it plans to build on part of the former home of Market Square Arena downtown.

Livingston, the supermarket analyst, cautions that the specialty sector might become overly saturated.

“At this point, it’s kind of the me-too development,” he said.•


  • Giant Eagle
    Having lived previously in Pittsburgh, where Giant Eagle began, I have to say it's a well-run company. Some of their stores are kind of ordinary. Many are outstanding! They are not afraid to spend good $$$ on innovation, and often succeed. Giant Eagle's prices are often pretty low, too. Wegmans is mentioned here. Nobody does super markets better than Wegmans, and it often places in the Top 10 Best Places To Work lists. Giant Eagle in Indy would be the next best thing to a Wegmans.
  • What grocery store is going in at E. 56th and N. Emerson?
    With all this grocery store talk, there is no greater need for a grocery store than the location at E. 56th and N. Emerson where the old O'malia's used to be. There was talk about a grocery store coming to that area but does anyone know which grocery store is going in there? Cannot be soon enough.
  • 103rd
    Can you imagine what the roundabout on 103rd is going to be like, with both Spring Mill and Illinois dumping their traffic there? BTW, the traffic problem on Spring Mill, considerably pre-dates the 31 construction. Its getting worse now of course, and will obviously be getting more so. The traffic studies paid for by the developers are useless. I wonder why. The roads west of Meridian are built for residential use, not commercial. Apparently the city of Carmel doesn't understand this, or care, as they want the area to become another Castleton.
  • Traffic
    Not defending any side, but I believe the traffic to be more related to people finding alternatives to US31 during construction. I travel this route every day and found the traffic change correlation to be stronger with the changes on 31. I do not think that the new stores are contributing to traffic at this time. Once Illinois is complete, I think you will start to see traffic be distributed between the two thoroughfares.
    • Neighbor huh?
      Well Meisenheim, you being a neighbor, have you noticed the new roundabout up by this CVS has INCREASED traffic flow on Spring Mill. It can take you 20 mins at 5:30 to go from 106th through that 116th street roundabout. If you are indeed a neighbor (which I doubt) good luck with the traffic this monstrosity will add, and lets don't forget the Walgreens that will have to be built on the north WEST corner since there is now a CVS on the south east corner. Keep up the PR, I'm sure the developers are pleased with that.
    • Giant Eagle...
      I'm more of a Whole Foods or (insert name of local, upscale grocery store in your area here) guy... However, Giant Eagle, the predominant "regular" grocery chain here in Cleveland, has recently built their Market District concept in a Carmel-like suburb - and I must say it's awfully nice.. From the mini gourmet food court, to the beer bar, to the demo kitchen, to the dry aged beef, to the pre-cut vegetable station - this is a nice place. If they only didn't have the Captain Crunch and Rice-a-roni and Wonder Bread sections still in the store, too, it would be even nicer... But I guess "those" people need to shop, too...
    • Wow
      As a local neighbor to this project, all i can say is WOW this is awesome! The CVS that just opened is well designed and sure is convenient. I can only assume that the developer and the city will make this a beautiful grocery store that will fit the area. I know that the approved PUD does not allow anything over 120,000 sf so I sure hope that this plan does not exceed 120,000. If this happens the area west of Meridian will finally have some services that will provide conveniences and elevate home values. EXCITED!
      • Not PR Here
        Just a shopper from back east looking for better quality options. Every Marsh I have ever been in looks like it's from the 1980's and that's after the remodel. Krogers are okay, but again most stores look old and outdated and there are very little added concepts. The Natural Market Chains are just high priced. The average family isn't paying 25$ for a whole chicken to last one meal. And including Wal-Mart in the discussion makes no sense. Yes it has 31% of the shoppers, but that means 70% shop elsewhere. I would never buy fresh meat at Walmart. Let's not even get started on the quality of our C-Stores. If Giant Eagle took over and remodeled the Village Pantries wow. We need more full service options here and it looks like this might be it.
      • Public relations
        Have a feeling the public relations people are out in force on these comments. This size store is completely at odds to what is promised, and the developers expect a fight. Hence, some of these positive comments. Think Clyde Lee and Diane Willis, the public relations folks for the developers
        • Yay
          Yay Giant Iggle! We desperately need better grocery options in this City and a strong regional grocer will fill that niche quite well. Marsh is just too expensive, and Kroger has quality issues.
        • Giant Eagle
          Moved here from Toledo and we really miss the Giant Eagle there. Great move by them and just wait till people see what they prepare in their deli secton. WOW O WOW
        • Giant Eagle Market District
          If they make this store a Market District store all of the complainers will go away. I lived near a Wegmans store and wow is all you could say. It was larger than Walmart but all upscale
        • Bit big
          Lets see, thats only 2 to 3 times the size that was promised, when the PUD was approved. And the Zionsville folks are drinking the Kool Aid on the development of Pittman farms? "A high quality natural foods market, like Whole Foods" is what they touted for the Bridges, and they are touting for Pittman farms in Zionsville. Hows that working out?
        • Giant Eagle
          I love Giant Eagle! I am from the Pittsburgh area and am excited to hear they are coming to Indy. It will feel like a piece of home. I do have to say that it is very comparable to Marsh with prices being a little lower.
        • You are missing one key element
          And that is Marsh is owned by a group that tried to sell Marsh before. Marsh stores unless in high end areas are old, unorganized and while prices have gotten much lower are no draw to most people. I visited the new Kroger on 65th street and Keystone today and it beats featured Marsh locations by a mile. Clean fast checkouts, self service and good prices. Give it 12 months and Marsh will be purchased by Giant Eagle. They will close some stores and remodel and improve others and finally get large groups of people to take a look at them.

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          1. Aaron is my fav!

          2. Let's see... $25M construction cost, they get $7.5M back from federal taxpayers, they're exempt from business property tax and use tax so that's about $2.5M PER YEAR they don't have to pay, permitting fees are cut in half for such projects, IPL will give them $4K under an incentive program, and under IPL's VFIT they'll be selling the power to IPL at 20 cents / kwh, nearly triple what a gas plant gets, about $6M / year for the 150-acre combined farms, and all of which is passed on to IPL customers. No jobs will be created either other than an handful of installers for a few weeks. Now here's the fun part...the panels (from CHINA) only cost about $5M on Alibaba, so where's the rest of the $25M going? Are they marking up the price to drive up the federal rebate? Indy Airport Solar Partners II LLC is owned by local firms Johnson-Melloh Solutions and Telemon Corp. They'll gross $6M / year in triple-rate power revenue, get another $12M next year from taxpayers for this new farm, on top of the $12M they got from taxpayers this year for the first farm, and have only laid out about $10-12M in materials plus installation labor for both farms combined, and $500K / year in annual land lease for both farms (est.). Over 15 years, that's over $70M net profit on a $12M investment, all from our wallets. What a boondoggle. It's time to wise up and give Thorium Energy your serious consideration. See http://energyfromthorium.com to learn more.

          3. Markus, I don't think a $2 Billion dollar surplus qualifies as saying we are out of money. Privatization does work. The government should only do what private industry can't or won't. What is proven is that any time the government tries to do something it costs more, comes in late and usually is lower quality.

          4. Some of the licenses that were added during Daniels' administration, such as requiring waiter/waitresses to be licensed to serve alcohol, are simply a way to generate revenue. At $35/server every 3 years, the state is generating millions of dollars on the backs of people who really need/want to work.

          5. I always giggle when I read comments from people complaining that a market is "too saturated" with one thing or another. What does that even mean? If someone is able to open and sustain a new business, whether you think there is room enough for them or not, more power to them. Personally, I love visiting as many of the new local breweries as possible. You do realize that most of these establishments include a dining component and therefore are pretty similar to restaurants, right? When was the last time I heard someone say "You know, I think we have too many locally owned restaurants"? Um, never...