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'Saving' Safeway unlikely, officials say

Sep 22, 2017 By Katie Roenigk, Staff Writer

Local economic development leaders aren't hopeful about the prospect of saving Riverton's Safeway store, but that doesn't mean they won't at least try to salvage the operation that has been in place for decades in Fremont County's largest city.

Safeway is set to close next month, according to business executives, who indicated the store was not profitable.

"Like all retailers, we are constantly evaluating the performance of our stores," company communications and community relations manager Kathy Holland said in an email last week. "Closing an underperforming store is always a tough decision and made after careful review and extensive deliberation."

Kevin Kershisnik, the vice president and executive director of Riverton's economic development organization, IDEA Inc., said the company's statements imply there is not much the local community can do to reverse the decision to close Safeway.

"At this point it's probably too far gone," he said. "There's probably not a lot that can be done. But we'll still contact them and see."

Kershisnik and Mayor Lars Baker both have reached out to Albertsons - the company that owns the Safeway store - to no avail.

They've also tried to contact the owner of the Safeway building.

"They keep passing us around to various people," Kershisnik said. "I'm still trying to get facts from the horse's mouth."

If Albertsons was looking for an opportunity to stay in Riverton, Kershisnik said the company likely would be in better contact with the city to talk about options.

He also doesn't think Albertsons would make a public announcement about closing the store if the company wanted to re-open under different circumstances.

"I think (they) already made the executive decision," he said. "(But we're) trying to do what we can. We'll keep working as hard as we can to either keep them there or get somebody else in there."

Lease issues

He plans to speak with the Safeway building's owner about the prospect of IDEA Inc. buying the property, or helping to find other tenants to fill the spot.

The deal could be complicated, however, by the details of the Albertsons lease.

Kershisnik pointed out that the building that now houses Bealls and Legacy Moulding stood empty for years because the family that owned the facility had a long-term lease with the Alco store that once operated there.

Even after Alco closed, Kershisnik said, the business had to pay part of its lease to the owner, who was reluctant to lose that income.

"(They said), 'As soon as I put a new merchant in there, I lose this guaranteed revenue stream from Alco,'" Kerhsisnik recalled. "So the owners just sat there."

IDEA Inc. was only able to purchase the property after the long-term lease agreement had expired.

A similar situation is playing out north of town at the vacant lot that once housed Kmart. Kershisnik said the store is committed to continue paying for about half of the building, so the property owner is only willing to lease the other portion.

IDEA Inc. is working on finding a tenant for the available space, but Kershisnik said "the recruiting process takes a long time," especially when businesses are also being courted by developers in Laramie and Cheyenne.

Of the nine opportunities he explored last year in cooperation with the Wyoming Business Council, Kershisnik said seven went to the southern portion of the state.

"They want to be by the Capitol, or on the highway system," he said.

The development going in north of town on property that once belonged to the Wyoming Honor Farm offers another opportunity to attract businesses: Kershisnik said the developer there is working with several retailers, some of whom may be interested in leasing an older facility in order to save money.

"Our plan ... is to talk to those retailers as well and say, 'If you didn't want to go into a brand new space, if you're looking at something more economical that's still on Federal, here are some options for you,'" Kershisnik said. "We're trying to turn over every rock we can to find folks to fill (those buildings)."

Innovate

Kershisnik guessed the economic woes Safeway cited may be due to the store's location on the same side of town as Walmart. He is planning to gather market research that will show whether Riverton is losing customers to other cities, or whether a majority of sales are going "to the large behemoth."

"We don't know for sure, but that's kind of what we're thinking," he said. "It's similar to what you see in a lot of rural communities. Where there is a Walmart in proximity, a majority of the folks end up going there and shopping."

By contrast, he said, Smith's Food and Drug, on the other end of Riverton, seems to be doing well, and the Safeway in Lander - where there is no competition from a big box store - remains open.

For businesses located closer to large, commercial retailers, Kershisnik said it's necessary to offer products - and experiences - that are unique or specialized. For example, a store can differentiate itself by handing out samples, organizing community classes, or selling homemade goods that aren't available elsewhere.

"It's somewhat of a paradigm shift," Kerhsisnik said.

There are also opportunities for businesses to partner with Walmart to offer maintenance of the commoditized products sold there. For example, in some communities Kershisnik has seen labels on Walmart boxes directing customers to local shops for service.

"You can sell a low-end bike at Walmart - that's what they have, $99 bicycles - but they have no way of repairing it," he said.

Funneling customers to area stores gives local proprietors the opportunity to sell more products, like higher-end bicycles or custom parts.

Internet

Local merchants can also expand to the internet, Kershisnik said.

"That increases their market share and their market potential and opens things up," he said.

Riverton's market research from two years ago showed the No.1 competitor for local businesses was "non-store retailers," he continued.

"That's the Amazons of the world, Walmart.com," he said. "That's where we're seeing most of the leakage."

Five years ago, he said Riverton was losing about $13 million to online vendors. Three years ago, the number had risen to $20 million.

"People are ordering food online as well," he said. "You can order dog food and boxed products. ... We're seeing that trend."

As a result, he said Riverton needs to work even harder to bring new businesses to town. Improving air service is one strategy, he said, and he thinks the recent upgrades to the broadband network through Lander and Hudson will be beneficial as well.

"They're talking about extending that from Hudson to Riverton," Kershisnik said. "That would give us some more connectivity."

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Riverton's Safeway store is set to close next month. Albertsons now owns the Safeway chain.						     Photo by Gary Dieu

Riverton's Safeway store is set to close next month. Albertsons now owns the Safeway chain. Photo by Gary Dieu


Riverton's Safeway store is set to close next month. Albertsons now owns the Safeway chain.						     Photo by Gary Dieu

Riverton's Safeway store is set to close next month. Albertsons now owns the Safeway chain. Photo by Gary Dieu

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