Dive Brief:

• Wegmans announced on Thursday that it plans to close its store at Natick Mall in Natick, Massachusetts, sometime this summer, because it has concluded that the location is not financially viable.
• The two-level, 134,000-square-foot supermarket opened in 2018 and is one of the largest stores operated by the East Coast grocery chain.
• Wegmans is shutting down the suburban Boston location even as other grocers continue to operate stores in enclosed shopping malls.

Dive Insight:

Wegmans’ move to shut down the store represents a strategic shift for the company, which described the mall-based space it occupies as an optimal location for its business model when it sought workers for the store.

“Natick Mall is an ideal place for us to deliver on our promise of incredible customer service, the best ingredients, restaurant-quality prepared foods, and low prices,” Ralph Uttaro, who was at the time Wegmans’ senior vice president of real estate, said in an announcement on the grocer’s website ahead of the store’s debut in April 2018. “The fact that this will be our first multi-level store within a major mall only adds to our enthusiasm for this project.” 

The store, which offers direct access to the mall from both levels, features a burger bar, a coffee shop and extensive seating. The location originally included a Mexican restaurant known as Blue Dalia Restaurant and Tequila Bar, but Wegmans closed that eatery in 2019 because it underperformed.

In announcing its intention to shutter the store, which is situated in space formerly occupied by a J.C. Penney department store, Wegmans said it determined in 2009 that Natick would be a good place for it to expand but was unable to identify a site that met its needs until the mall space opened up. Wegmans announced that it would open a store in the mall in 2015, according to the MetroWest Daily News.

“Unfortunately, with this non-traditional location we are unable to attract enough customers for our business model to work,” Brien MacKendrick, human resources director for Wegmans New England division, said in a statement.

Wegmans said it has promised employees at the store that “their positions with the company are secure,” adding that it is offering all of the 365 full- and part-time workers positions at nearby stores. The 110-store retailer, which has five stores in the greater Boston region in addition to the Natick location, said it does not plan to close any other locations.

Natick Mall is owned and managed by Brookfield Properties, which notes on its website that it believes grocery store-anchored shopping malls “are the future of retail.” The real estate company said that nearly two-thirds of the U.S. population is within an hour’s drive of its properties, adding that “we give the grocery category the ability to expand their reach and bring value to vast, new audiences.”

Brookfield hosts grocery stores at multiple enclosed shopping malls, including Lidl stores at malls it operates in Wilmington, North Carolina; Columbia, Maryland; and the New York City borough of Staten Island. The real estate company also provides space to a Stew Leonard’s location at a mall in Paramus, New Jersey.

Other mall operators also have grocery anchors in their malls. The Shops at Columbus Circle in Manhattan, owned by Related Companies, is home to a Whole Foods Market. Meanwhile, a Westfield mall in Wheaton, Maryland, has Costco and Target locations as anchor tenants and has a Giant Food store on its property.