August 1, 2011 in Business, City

Empty Safeway will reopen as Grocery Outlet

By The Spokesman-Review
Map of this story's location

The empty Safeway supermarket on West Third in Spokane will reopen this fall as a Grocery Outlet store.

California-based Grocery Outlet Inc. is known for its deep discount food items and home merchandise.

It has two local stores in Spokane Valley and in North Spokane.

The store, at 1617 W. Third, is expected to open in October, said Jim Quigley.

Quigley, who handles commercial real estate for Kiemle & Hagood, brokered the lease.

In 2006 Safeway closed the 21,900-square foot location, at Third and Maple. A year later former Downtown Toyota General Manager Dave Coombs bought the property for over $2 million.

Coombs announced plans to convert the building, built in the 1950s, into a Lexus dealership, but later halted the project when the economy plummeted.

Coombs remains the owner, with Grocery Outlet agreeing to a 10-year lease.

Marc Drasin, Grocery Outlet’s real estate vice president, said the location came from research and customer interest. “We received calls and emails from people asking us to put a store in that downtown area,” he said. Research confirmed the two Spokane stores were not drawing customers from near downtown or the West Plains, he said.

Both Spokane area stores have total sales that are “above average,” he added.

“We like Spokane very much,” Drasin said.

The company expects to hire between 30 and 40 local workers. Drasin said applications will need to be submitted only at the store.

“We typically start the hiring process about six weeks after we start construction,” he noted.

Construction is starting this week. Drasin said Grocery Outlet will spend close to $2 million on improvements to the building.

Grocery Outlet operates about 150 deep-discount stores across the West, mostly in California, Oregon and Washington. The company acquires items that are either overstock goods, closeout or outmoded packaging products or unsold seasonal inventory.

“All of the items we buy come directly from the manufacturer, not from third parties,” Drasin said.

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