Kroger plans store in Cumberland Mall next year

But the move marks another twist in the reshaping of metro Atlanta malls amid fundamental shifts in retailing and consumer behavior, industry leaders say.

Gone are the days when a mall’s primary function was to sell fashion, makeup and toys for Christmas. If a mall wants to survive, it needs to expand its horizons.

“They are being forced to be creative because of the consolidation or attrition of big box retailers,” Bob Wordes, chief operating officer of The Shopping Center Group, said of mall operators.

It also demonstrates the fierce competition among grocery stores, the experts said. Kroger and Publix, the dominant grocers in Atlanta, are looking for avenues to fend off growth from the Whole Foods, Trader Joe’s, Aldi and Fresh Market chains, as well as new grocery entrants such as Sprouts and Earth Fare.

The Cumberland move is the result of a deal between Sears and Kroger, though mall owners typically have sway over the tenant mix.

Bigger than average

At 88,000 square feet, the Cumberland Mall Kroger will be bigger than the Ohio-based chain’s typical store. It will include an expanded bakery and natural foods, full-service meat and seafood departments, a kitchenware section called Kitchen Place, a floral shop and an expanded, upscale deli with outside seating, Glynn Jenkins, a spokesman for Kroger’s Atlanta division, said in an email.

Jenkins said Kroger will continue to operate its nearby existing store in the Cumberland Galleria market “to explore additional merchandising opportunities.”

Jenkins did not indicate how the mall store will handle practical matters such as shopping carts and parking, though Sears currently has ample parking in front of its second-floor entrance that would be Kroger’s new home. Construction will begin in January 2016 and finish tentatively later that fall, Jenkins said.

John Bemis, southeast head of retail for real estate services firm JLL, said grocery-anchored shopping centers are among the more active areas of development. He said grocery stores were part of malls in the 1960s and that such partnerships are more common in Europe.

Because consumers visit grocery stores at least twice a week versus once a month for malls, a Kroger inside Cumberland would potentially boost foot traffic, experts said. Kroger, meanwhile, would capture business from shoppers who like the idea of getting everything they need in one place.

“I think it’s a brilliant move by Kroger in a market that is really tight,” said Emil Gullia, a senior director at Franklin Street Real Estate. “I think it is a trend that is going to continue.”

Uncharted territory

General Growth Properties, which owns Cumberland as well as Perimeter and North Point malls, acknowledged the uncharted territory of the plan.

“We are constantly striving to provide the best possible shopping experience at Cumberland Mall, while responding to the changing needs of the consumer,” the company said in a statement. “The partnership between Sears and Kroger creates a unique opportunity for our shoppers to improve the convenience of key shopping trips and ultimately save time. We look forward to seeing this new concept in action.”

Dining in the food court at Cumberland recently, Harry Thompson, of Marietta, said he sees the logic behind the addition of Kroger, but probably wouldn’t shop at the Cumberland location. While he goes to the grocery store three or four times a week, he said he comes to the mall for specific items and doesn’t think that would change just because Kroger is there.

“I’m very organized,” he said. “I’m not motivated by impulse.”

Alex Paige, of Sandy Springs, said a smaller mall store would be useful for picking up a few items, but he would prefer a traditional grocery store in a shopping center for his main shopping excursions.

“I don’t know if I would come here for general shopping because of the mall traffic,” he said.

However the mall grocery concept plays out, metro Atlanta’s mall landscape is changing. Gwinnett Place, once a dominant player, recently lost its JCPenney anchor in April. Stonecrest Mall in Lithonia, one of the last to be constructed in the area, recently had its loan extended as operators seek improvements to attract new tenants.

Non-traditional tenants

The reasons for the change: competition from the Internet, mall oversupply and the loss of ubiquitous tenants such as bookstores, record shops and greeting card outlets. Walkable shopping options such as Avalon in Alpharetta or Buckhead Atlanta also are stealing foot traffic of those who want an old-fashioned outdoor window-shopping experience.

Malls already have turned to non-traditional tenants including colleges, utility company offices and dialysis centers. Southlake Mall in Morrow turned excess department store space into a call center. Union Station, the defunct former Shannon Mall in south Fulton, is being demolished and redeveloped into a movie studio and distribution center.

Some remain healthy, though. Lenox Square remains a retail icon, while Perimeter, North Point, Cumberland and Phipps Plaza still hum with activity.

Nordstrom last year closed its store at Mall of Georgia, but Iowa-based Von Maur quickly claimed the space to quiet fears the state’s biggest mall might be troubled.

Jim von Maur, president of chain, said the mall business remains strong, but it takes more to make retail work today. Same-day delivery, ship-to-store and other distribution options play a growing role in attracting and keeping shoppers.

Attention to customer service — offering high speed networks, child care and charging stations for hybrids, for instance — also makes a difference.

“The good (malls) are going to get better and the OK ones are going to get weaker,” von Maur said.

J. Scott Trubey contributed to this report