Supermarkets in Worcester: Shifting Landscape and Closures

The retail landscape in Worcester is undergoing significant changes, with major supermarket chains closing long-standing locations. One notable example is the closure of Price Chopper on Cambridge Street at the end of January. Built with purpose in 2003, this store has served the community for over 20 years but is now closing its doors.

Similarly, in July of 2024, Stop & Shop announced the closure of its Lincoln Street location, which has already ceased operations. This follows the earlier closure of its White City store in Shrewsbury. These closures raise an important question: why are large, purpose-built supermarkets shutting down in urban areas?

Factors Behind Supermarket Closures

Several key factors contribute to these closures:

- Aging Infrastructure: The 20-year-old store requires significant renovations to remain competitive.

- Loss of Alcohol Sales: Price Chopper previously sold alcohol but stopped in recent years, potentially impacting revenue.

- Triple Net Lease Costs: Rising property taxes, borne by the tenant, add financial strain.

- Increased Competition: Discount retailers such as Walmart, Target, Aldi, Dollar Tree, and Family Dollar provide alternatives that attract budget-conscious shoppers.

A Closer Look at Worcester’s Retail Landscape

A brief examination of supermarket properties in the area highlights financial and logistical challenges:

- 29 Sunderland Road: Built in 1960, this 46,050-square-foot property sold for $4.1 million in 2022. The lease, structured as Triple Net, expires in March 2027 with four five-year renewal options. Any store renovation could significantly increase tax liability, currently at $142,000 per year based on its $4,966,600 valuation.

- 50 Cambridge Street (Price Chopper): Spanning 67,814 square feet and built in 2003, this store is valued at $11,289,700, resulting in an annual tax bill of $323,000.

- 72 Pullman Street: One of the newest and most modern supermarket locations, valued at $10,177,000, which at a tax rate of 28.61 per thousand results in an annual tax burden of approximately $291,000.

- 221 Park Avenue: A 37,090-square-foot store valued at $5,833,500, resulting in an annual tax burden of approximately $167,000. This might be the worst store overall, yet it has the best location for housing. This means it might be the next location to close. Unfortunately for the property owners, it is zoned BL-1 which does not allow for housing by right.

- 733 Boston Turnpike (Price Chopper in Shrewsbury): A comparable 63,090-square-foot store, built in 2010, is valued at $13,427,300. However, due to Shrewsbury’s lower tax rate (12.04), its annual tax burden is only $161,000, significantly less than its Worcester counterpart.

Economic Considerations

The disparity in tax rates between Worcester and neighboring Shrewsbury illustrates a financial challenge for supermarket operators. Higher property taxes in Worcester, coupled with a lower average household income, make profitability more difficult to maintain. This economic pressure, combined with evolving consumer shopping habits and increased competition, may continue to drive changes in the local supermarket landscape.

The future of these vacant retail spaces remains uncertain. Will supermarkets reinvest in Worcester, or will these properties be repurposed for alternative uses? As leases expire and economic conditions shift, the city’s grocery market will likely continue to evolve.