March 4, 2010

Stop & Shop's foray into Maine coming to a close


— By . KIM

Staff Writer

KENNEBUNK — Stop & Shop Supermarket Co. is pulling out of Maine by shutting down its store on Route 1 here and discontinuing plans for a mixed-use development in Portland.

About 140 employees will be affected by the closure of the Super Stop & Shop on Oct. 30.

The store -- the company's first and only one in Maine -- opened in 2007, nearly four years after the Massachusetts-based chain first approached town officials with its proposal. The plan survived proposed zoning amendments that would have blocked its construction, and an attempt by rival Hannaford Bros. to overturn the Planning Board's approval.

Stop & Shop said it made the difficult business decision to close the store after a thorough review. Spokeswoman Faith Weiner said she could not elaborate. Employees were notified Monday.

Weiner said the decision on the Morrill's Corner project in Portland was made separately. The company said the current economic climate made the project unfeasible.

Kennebunk Town Manager Barry Tibbetts said Tuesday that the store's closure caught him by surprise. ''I don't get it. They just decided out of the blue,'' he said.

The store's management told him in recent months that the store was profitable, though not performing as well as other new locations, Tibbetts said. He said the store had been granted a state liquor license with help from the town and lawmakers from the area.

Tibbetts said he wants to know whether something in the local or state business climate led to the company's decision, but he hasn't gotten a response.

Jon Springer, associate editor of Supermarket News, a trade publication, said that conquering new territory can be difficult, and that grocers often buy existing chains to gain entry.

''One of the ways these companies make financial sense for themselves, they get leverage on 'X' number of stores in a particular area. For them, it probably makes better financial sense to expand in a territory where they already are,'' he said, noting that Stop & Shop is investing around Washington, D.C.

David Livingston, a supermarket analyst in Wisconsin, said Hannaford Bros. probably took measures to protect its turf, such as lowering prices, targeting advertising and putting its best managers in the area.

''Sounds like to me, Hannaford's had a plan and it's worked well for them and they don't have to worry about any more Stop & Shops,'' Livingston said.

Stop & Shop said it will work with state and local agencies and Local 1445 of the United Food and Commercial Workers International Union to support dislocated employees. The state Department of Labor's Rapid Response teams will be at the store next Tuesday and Thursday.

Rich Charette, the local's president, said it was sorting out what each represented employee is entitled to under the contract. Some will be able to transfer, but the closest Stop & Shop store is in Exeter, N.H.

The 65,665-square-foot Super Stop & Shop is the anchor for the Shops at Long Bank. An Ocean Bank branch and a Starbucks are within the supermarket. A toy store, a cell phone shop and an insurance office are the other tenants in the plaza, which has a half-dozen vacant spaces.

''I think everybody was coming here thinking there would be an economic boom,'' said Melissa Verrill of Arundel, who shops around according to where the best buys are.

In Portland, Debra Keenan was glad to hear that Stop & Shop had pulled out of the Morrill's Corner project.

''The economy did what common sense and rational thinking wouldn't do,'' said Keenan, who was part of a group that sued the city over the special zoning contract granted to the project. ''And thank God for that.''

A 66,000-square-foot Super Stop & Shop was to anchor the 20-acre development at Morrill's Corner, which was proposed more than seven years ago. The project faced two lawsuits and more recently had trouble recruiting smaller tenants for the 64,000 square feet of retail space.

Almost 60 housing units -- a mix of apartments and townhouses -- were also part of the plan.

The project manager, Paul Cincotta of Packard Development in Newton, Mass., could not be reached for comment.

Greg Mitchell, Portland's economic development director, said developers could request extensions of city and state approvals. That could make the project easier to restart or sell.

''The real estate -- the property -- is still well-positioned for investment when the economy improves,'' he said.

Staff Writer Ann S. Kim can be contacted at 791-6383 or at:

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