Discount Chains Enter San Diego Market : Retailing: Conversion of Buffum’s at Grossmont Center into a Superstore for Sports is an example of the trend, pushed by lower rents and changing consumer habits.
The former Buffum’s department store in Grossmont Center that is being turned into an Oshman’s Superstore for Sports is an example of the industry’s “retrofitting,” the buzz word for an age-old process by which failed stores are replaced with a new retailers with different slants on the market.
But the lingering recession and fast-changing consumer habits are causing the cycle to turn faster than in prior years. Another factor speeding the changes is that retail space in San Diego County malls and retail strip centers is available at generally lower prices--down by as much as 30% over the last two years--and in greater abundance.
As a result, several nationwide discount chains have entered the San Diego market in recent months, usually replacing established stores at existing malls that failed to keep pace with changes in consumer tastes and habits.
Ross Dress for Less, Everything’s a Dollar and Music Plus are just a few of the nationwide discount chains that have either signed or are planning to sign multi-location lease deals at San Diego retail centers.
Jon Bilger, a retail space specialist with CB Commercial real estate brokerage of San Diego said the growth of the tenant category in San Diego is an other example of the specialization of the retail trend toward discount operations. Bilger and his associate Don Moser handle leasing for Grossmont Center.
The new outlet that will be opened later this year by Oshman’s, a Houston based sporting goods chain, will have 60,000 square feet in floor space, or five times the size of the Oshman’s location in Point Loma. The location will compete with Sports mart and Sports Chalet, chains that operate mammoth warehouse-sized sporting goods stores in San Diego.
The Buffum’s department store, once an “anchor” tenant of Grossmont Center, has been closed for a year, the victim of consumers’s spurning of the prices and variety of department stores in favor of low-margin, high volume specialty outlets.
Nancy Johnston, head of the San Diego office of Epstein & Associates commercial real estate brokerage, said the relatively low rents being asked by landlords have caused her clients, most of whom are prospective tenants such as Ross Dress for Less and Starbuck’s Coffee to sign deals for several locations.
“A lot of retailers see this as a window of opportunity to enter a very difficult market in terms of cost and availability of good space,” Johnston said. Ross Dress for Less, for example, opened a Sports Arena area store last month and plans openings in Solana Beach, Santee, Rancho San Diego and Carmel Mountain Ranch areas over the next year, she said.
Everything’s a Dollar, a Milwaukee-based chain, will be opening eight new stores in San Diego between now and the end of the year, Johnston said. The Starbuck’s and Patrini shoes chains are also considering aggressive growth, she said.
