Grocery Stores Consider Second Generation Buildings

When a grocery chain adds new stores or an independent entrepreneur decides to open one, they can choose between building brand-new or renovating stores left vacant by other chains. Both options come with advantages and disadvantages. For example, a “second generation” store often saves time and money on framing construction, but the interior design will include the previous chain’s signage and branding, which will need to be removed and replaced. Deciding if an old store will work better than new construction takes some expertise and vetting.

Vetting Old Buildings

Grocery chain executives or independent entrepreneurs scouting new sites and looking to remodel, or build should get help from commercial construction partners experienced in grocery store development. When vetting a second-generation grocery store, there are special considerations involved, including what equipment has been left behind and how well the current layout works for the new store. Like in any construction project, there are also a lot of structural unknowns that go into buying and renovating a grocery location.

Joining forces with a knowledgeable and experienced construction company like The MDC Group before deciding to purchase and renovate an existing building will help a company make an informed decision and create an accurate budgetary forecast. A builder that’s worked with various grocery brands in markets across the country can inspect the existing building and current systems to determine their condition and life expectancy. They will tell you what systems need repairing and which should be replaced. They can also determine how much interior design will need to be changed to match a company’s brand.

Advantages of a Second-Generation Building

• Speed

New construction takes more time than making changes and improvements to a building already in existence. According to an article by thegroceryguy.com, “As a general rule, a grocery store can be built in 4-6 months. However, the size of the store, whether it’s being built in an existing building or from the ground up, and how friendly the local government is to small businesses are all contributing factors.”

In a second-generation or “2nd gen” space, the exterior envelope, site work, and infrastructure are already in place and may only need minor repair or maintenance for the foreseeable future. Walls, ceilings, plumbing, and HVAC already exist. That saves months. How many months will depend on how much of the machinery will need to be replaced or repaired and how much interior customization for branding purposes will be needed. Additionally, if remodeling is needing, planning and permits could extend the timing slightly.

• Cost Savings

Infrastructure and Equipment- Some of the infrastructure grocery stores need, like extra compressors, rooftop HVAC units, and refrigeration systems, can be expensive. The support structures for both horizontal and vertical refrigerators cost money, as do the piping, drainage, and electrical systems they require. If the machinery left by the previous store is in good condition and likely to last, that’s less money needed to get up and running.

Parking Lots and Outdoor Lighting- The condition of the parking lots and outdoor lighting also come into play. Parking lots that don’t need to be repaved and painted can save money, as can working light poles and building lights. Repaving a 4000-square-foot parking lot can easily cost $10,000. For repainting parking lot lines, the average cost can be between $.20 – $1.00 per linear foot, depending on which line type is needed. That’s thousands of dollars for a larger lot.

What type of lights and how old they are also matters. Because electricity and lighting can be a huge expense for stores, having the latest, most efficient LED lighting is ideal. They cost less to power and last much longer, so replacing bulbs happens less often, saving on labor costs. An article on LinkedIn states,” The growing trend towards switching to energy-efficient lighting in parking lots is not only making them safer but is reducing energy costs by an average of sixty percent or up to $9B per year.”

• Disadvantages of Using Second-Generation Buildings

1. Poor Building Condition – There are many unknowns when tackling an existing building. A failing infrastructure or building envelope might make reuse not cost effective.

For example, if the exterior of the building including the exterior walls, storefront systems, roofing and or structural components are failing or nearing their end of life, paired with major interior remodeling, refrigeration replacement, HVAC or electrical infrastructure upgrades need to occur, then the totals may lean towards demolition of the building and building new. Also, construction companies like the MDC Group must always understand the current building codes for the building’s jurisdiction. Bringing the existing building up to the current building codes could be an expensive option depending on the age of the building and the current codes for that area. An experienced construction company can tell you how much of a structure will need to be torn down and what the demolition and removal will cost.

3. Branded Interior Design- The color schemes, fixtures, floor layout, and signage from the grocery chain that’s vacated the building may not suit the new store’s needs. Depending on how different the colors and store layout might be, the business might need to make some design sacrifices on flooring, lighting, and displays to save money. In any case, there will be expenses for tearing out and replacing interior displays, logos, and department signs.

Choosing between building a new structure for a grocery store and adapting a building abandoned by another chain depends mainly on time and expense. Using an existing building could take less time and opening sooner could be a great advantage. The cost differential between an older building and new construction depends greatly on the condition of the 2nd gen building and the equipment left behind. Other factors are less about time and money more about design flexibility on the interior. The best way to proceed is to partner with an experienced general contractor with expertise in grocery store construction. For example, The MDC Group has 25 years of experience in grocery store building and design.

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