Can Route 58 businesses handle new Lowe’s, Costco?
While Borders and Boulder Creek Steakhouse are closing all their locations, leaving large vacant stores in Riverhead with no willing renters in sight, two national retailers are coming to town.
A Lowe’s home improvement store will occupy the former Suffolk Life property and a Costco wholesale club will open on Route 58.
But one local real estate expert says no one should worry that the new stores may put their national competitors in Riverhead out of business. At least not anytime soon.
“Overall the area can handle it,” said Dave Bujnicki, senior director of investor relations for Kimco Realty, the largest owner of shopping centers in North America.
According to Mr. Bujnicki, who lives in Baiting Hollow, on a per capita basis, Long Island is actually considered under-retailed for its density. He noted that Riverhead is, of course, an attractive location because it draws customers from as far as East Hampton and Orient, since there are no box stores east of the 11901 zip code.
“East of Riverhead there is nothing else,” he said.
Mr. Bujnicki said the area can likely support both the existing BJ’s Wholesale Club and the proposed new Costco, representatives of which are working with town planners to secure site plan approvals.
“Wholesale clubs are growing,” he said. But he did caution that Costco and BJ’s could take business away from supermarkets. “People are looking at discount operators,” he said.
Some local shoppers say they welcome another bulk retail option.
Cathy Goldfarb, a Hampton Bays resident who shares Costco and BJ’s memberships with a friend, said she belongs to both clubs because they offer different brands and different items. She said she prefers the products Costco offers, but enjoys the proximity of BJ’s. She said she will likely keep her BJ’s membership as long as it offers products the local Costco does not.
“It depends on what they offer me,” she said.
Frank Austria, a real estate broker who lives in Southampton, said he’s wanted a Costco on the East End for years.
“I can’t wait for it,” he said while loading his cart in the BJ’s parking lot.
Mr. Austria said he preferred Costco, and thinks Riverhead can definitely support a second wholesale retailer.
“Absolutely it can support it,” he said. “It’s a good location. It’s the future.”
Costco representatives did not return calls and emails seeking comment.
As for Lowe’s, across the street from The Home Depot, Mr. Bujnicki said the two should be able to coexist less than a quarter-mile from one another.
“It’s part of [Lowe’s] direct strategy, going head to head with Home Depot,” he said, predicting that Lowe’s will likely take some of Home Depot’s market share.
The 103,000-square-foot store, with a 26,000-square-foot garden center, is expected to open in the first half of January 2012, though no opening date has been set, said Stacey Lentz, a Lowe’s spokeswoman.
Ms. Lentz said Lowe’s has invested $16.5 million in the new store and thoroughly researched the area before moving in.
“When we research potential store locations, we evaluate literally hundreds of factors,” she said in an email. “I can’t share all the factors, because they are proprietary, but some of the factors include: an area’s population, home ownership, potential for growth, access to major roadways, easy access into and out of the parking lot, growth in the community, etc.”
Still, for some people, comfort and familiarity will be the determining factor in where they spend their money.
Genevieve Rippe of East Moriches said while shopping at BJ’s that she will probably not switch to a Costco membership.
“Don’t they all sell the same kind of stuff?” she asked.
