Ukrop’s will close its only Roanoke store

Ukrop's Super Markets Inc. has decided to close its only Roanoke store after acknowledging late last year that it was having problems gaining a foothold.

Closing the store Oct. 24 comes amid speculation that the family-owned grocery chain is for sale.

"We wished it had worked out differently. It's painful for many reasons," Robert S. Ukrop, the chain's chairman, president and CEO, said in a statement yesterday.

Ukrop was in Roanoke yesterday afternoon telling employees the news. He would not comment further, a spokeswoman said.

It is unknown whether the closing has any connection to the chain's possible sale.

In July, Food World, an industry publication that covers the industry in the mid-Atlantic region, wrote that Ukrop's had issued a prospectus soliciting buyers. Food World cited multiple industry sources.

Supermarket News, another industry publication, posted a story on its Web site last month saying that an unnamed private equity firm had outbid North Carolina-based grocer Harris Teeter to buy the chain.

Ukrop's has declined comment in the past about a potential sale.

However, Union Bankshares Corp. said in a regulatory filing last week that a sale of the Ukrop's chain might be in the works. The bank is merging with First Market Bank, which is majority-owned by the Ukrop family and the chain.

The Henrico County-based chain opened the 58,700-square-foot store in Roanoke's Ivy Market shopping center on Franklin Road in 2007. The location was a large part of the store's problem, experts say.

Bob Copty, a senior vice president at Thalhimer/Cushman & Wakefield's Roanoke office, said yesterday that the Ivy Market center has never reached its potential.

"The original project was supposed to have a substantial amount of local shops. But those local shops never materialized," he said. "It made it very difficult for them."

But Copty said Ukrop's also faced several other problems, including the economic downturn and stiff competition from Kroger, which has about 10 stores and a distribution center in Roanoke. "When [Ukrop's] opened, they were well-received. But there are a variety of reasons it didn't work," he said. "It's a loss for Roanoke."

Jeffrey W. Metzger, Food World's publisher, said yesterday that breaking into a new market is difficult for grocers.

"It's tough to be the new boy on the block, to come into a new market and try to win customers over," he said.

Those difficulties were made worse by problems at the shopping center. "It's sort of off on an island by itself," Metzger said.

In December, Ukrop went public with his concerns about the future of the Roanoke store.

In a letter to about 6,700 Roanoke-area customers, Ukrop said it was having a difficult time attracting shoppers.

"We believe in the viability of this area, but without strong retail co-tenants to draw more traffic to the center, it is difficult to build [a] business as a stand-alone operator," he said in the letter.

Ukrop's has struggled to take its brand and style of grocery retailing to locations outside its core Richmond market. Ukrop's will have 27 stores after the Roanoke store closes.

The chain has opened four stores outside its home market since 1997, when it opened a store in Fredericksburg. Since then, two stores have opened in Williamsburg and the one in Roanoke.

But Ukrop's closed one of its two Williamsburg stores in January because of sluggish sales.

C. Lee Warfield III, executive vice president at Thalhimer/Cushman & Wakefield in Richmond, said the Ukrop's brand has a difficult time translating outside the Richmond region.

While Richmond customers are used to its stores closing on Sundays and not selling beer and wine, those outside the market aren't.

"You can't enter a new market and offer less," he said.

Contact Louis Llovio at (804) 649-6348 or .