Walmarts on the march

Retailer sees Tucson as ripe for expansion, with 3 supercenters, 2 neighborhood stores
2012-03-11T00:00:00Z 2012-03-13T11:23:20Z Walmarts on the marchDale Quinn Arizona Daily Star Arizona Daily Star
March 11, 2012 12:00 am  • 

The Walmarts are coming.

In the wake of the Great Recession, Walmart is one major retailer with significant plans for expansion in Tucson.

The company has three new supercenters and two neighborhood markets in the works.

The discount retailer has identified Tucson as an area that's underserved when it comes to affordable shopping options, said Delia Garcia, a Walmart spokeswoman.

"Our goal is to improve access to affordable groceries for Tucson families," Garcia said.

Tucson's big-box retail market has been hit hard by bankruptcies and closures since 2008. National chains such as Mervyn's, Circuit City, Linens 'N Things and Borders book stores have left big spaces in shopping centers.

And as consumers reined in spending, discount retailers like Walmart, along with dollar and second-hand stores, have become increasingly popular.

With its one-stop-shopping model, Walmart fills a niche in the retail market, said Greg Furrier, a commercial broker with Picor Commercial Real Estate Services. In contrast, an electronics retailer like Best Buy, which sells destination products people are willing to drive for, won't have as many stores, Furrier said.

When considering whether Walmart presents a threat to other grocers, consumers don't generally change their habits unless they can save a decent amount of money, Furrier said. So more expensive grocers tend to be more vulnerable when a Walmart moves in nearby, he said.

The consumer market has recently shifted toward discount retailers - spurring the expansion of Walmart - but Furrier said there's no way to know for sure how long that trend will last.

Others expanding

Other national chains, such as convenience store chain QuikTrip, have also been opening stores in Tucson, Furrier noted.

Drugstores and sit-down restaurants have also been looking for space in Tucson.

Tenants have been able to demand deep discounts from landlords in recent years as it became increasingly difficult to keep space filled. But that has started to change, Furrier said.

"We're really in a period where we start kind of shifting from a tenant's market to a landlord's market," Furrier said.

In a big-box retail report, Nancy McClure identified Walmart, PetSmart, LA Fitness, Whole Foods and Costco as companies that are opening stores in the Tucson market. McClure is a first vice president at CBRE specializing in retail properties.

The appetite for retail space in prime Tucson locations is strong, McClure said. But retailers are looking at opportunities across the country, and that includes areas where landlords are more desperate to cut deals with tenants.

"Many Tucson ownerships are not in that position and retailers are finding slow to no traction in securing the sites that they had hoped to obtain at a deeply discounted rate," McClure wrote.

Big-box spaces vacated

At the end of 2011, greater Tucson had more than 1.55 million square feet of big-box space available. Since the fourth quarter of 2008, several retailers have closed stores, contributing to that vacancy.

Retailer Vacated space (sq. ft.)

American Home 415,749

Mervyn's 271,240

Bashas' 128,400

Linens 'N Things 112,539

Circuit City 64,624

Borders 53,200

Shoe Pavilion 42,700

Source: CBRE's Year-end 2011 Big Box Retail Report for Tucson, by Nancy McClure.

Contact reporter Dale Quinn at dquinn@azstarnet.com or 573-4197.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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