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Archive for Saturday, December 19, 1998

S, HY-VEE STAKE CLAIMS TO WEST SIXTH STREET PROPERTIES GROCERS UNWRAP SUPER STORE PLANS

December 19, 1998

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Neither company knew about the other's plans, but officials from both projects said the increased competition wouldn't stop them.

Lawrence's grocery store heavyweights are girding for a head-on battle on the city's fast-growing northwest side.

Dillon Food Stores and Hy-Vee Inc. both are planning new supermarkets on West Sixth Street, the companies said Friday.

Kansas-based Dillon's, which already has three Lawrence stores, wants to build its fourth at the southeast corner of Sixth Street and Wakarusa Drive. Iowa-based Hy-Vee plans to build its second Lawrence store about a mile away, at the northeast corner of Sixth and Monterey Way.

Officials of both companies said they hadn't been aware of the other's intentions, but that the increased competition wouldn't stop them.

"It shouldn't change our plans at all," said Dennis Gaschler, spokesman for Dillon's, which is headquartered in Hutchinson. "We wouldn't proceed with this kind of project unless we felt there was the growth and opportunity in this location."

According to a development plan filed Friday at city hall, Dillon's would build a 48,000-square-foot store.

Gaschler said the company plans to open the store late next year.

That would give it a jump on Hy-Vee, which said it intended to open its new store early in the year 2000.

Hy-Vee to play catch-up

Like the store it opened in 1994 in southwest Lawrence, the new Hy-Vee would be accompanied by adjoining retail development. And like that earlier store, it would become the city's largest supermarket.

Hy-Vee said the store would employ about 450 people; about 150 would be full-time employees.

The company said it had reached an agreement to purchase 12 acres at Sixth Street and Monterey Way, where it will build the 66,000-square-foot supermarket alongside a nearly 33,000 square feet of additional retail space. The land is properly zoned for such development.

The $10 million store will be built by Hy-Vee Weitz Construction of Des Moines, Iowa, said Ruth Mitchell, the grocer's spokeswoman. It is one of 21 new stores the company is planning to build in 1999.

The adjoining $5.5 million development, which will include a 15,000-square-foot building for a secondary retail tenant and about 17,000 square feet in a strip-type center, will be developed by R.H. Johnson & Co. of Kansas City, Mo. Johnson developed the strip center that adjoins Hy-Vee's first Lawrence store near Clinton Parkway and Kasold Drive.

R.H. Johnson's Bob Johnson said Friday that he was in negotiations with two national retailers for the 15,000-square-foot building, but he declined to identify them or prospects for the other spaces. Plans filed Friday also allow for construction of a restaurant and drive-through bank nearby.

Mitchell said the store would follow the company's new prototype, which Hy-Vee calls its "21st-century format."

Slightly larger than the store it opened in 1994, the new supermarket will feature higher ceilings, more windows and increased emphasis on prepared foods and general merchandise. It also will get an expanded pharmacy with a drive-through lane.

Burgeoning development

Gaschler said it was still too early to say what Dillon's has planned for its new store, one of two that Dillon's plans to build in 1999.

Like Hy-Vee, the new Dillon's store would be part of a growing commercial development, and the land is already properly zoned.

The area southeast of Sixth and Wakarusa is part of a commercial subdivision being developed by Mastercraft Corp. of Lawrence and owned by Westgate LLC. Arby's Roast Beef restaurant is located there, and a new Blockbuster video store is under construction.

According to the development plan filed at city hall, Gregg Tire Co. plans to build east of Dillon's along Sixth Street, and a convenience store is slated to be built west of Dillon's.

The plan also indicates that the area will include more than 200,000 square feet of space when fully developed.

The stores would be the second and third supermarkets within a two-mile stretch on West Sixth. Dillon's opened a super store at 3300 W. Sixth in 1989.

Johnson said it remained to be seen how the grocery stores would perform in such proximity but thought Lawrence could support both new ones.

"It's an awfully good market," he said, "and that northwest side is seeing a lot of growth."

Mastercraft's Duane Schwada said the Dillon's location was clearly superior.

"The point is that Sixth and Wakarusa is the major commercial intersection in that portion of town," he said. "That's where the activity will be. Any other location along Sixth Street would be secondary."

Dillon's is owned by The Kroger Co., the nation's largest supermarket company with annual sales of $43 billion. At the end of 1997, Kroger operated 1,392 food stores under seven names in 24 states, and 816 convenience stores under six logos in 15 states.

West Des Moines-based Hy-Vee is an employee-owned corporation with 247 retail stores in seven Midwestern states. It had 1998 sales of $3.2 billion.

-- Richard Brack's phone message number is 832-7194. His e-mail address is rbrack@ljworld.com.

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