Meijer continues to move forward

March 6, 2009
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According to most national reports, the businesses that are doing well in spite of the recession are those that sell consumer basics.

And one of the most prominent businesses in that category is Meijer Inc., which is in its 75th successful year despite the major challenges the locally grown company has had thrown its way from large national retailers like Wal-Mart.

“How fortunate we are to have the Meijer family and Meijer Inc. located in our world,” said Earl Clements, a vice president with Grubb & Ellis|Paramount Commerce.

Clements, a retail adviser with the commercial real estate firm, introduced Hank Meijer, company co-chairman and CEO, as keynote speaker at last week’s West Michigan Alliance Program presented by the International Council of Shopping Centers and held at DeVos Place. Meijer opened his half-hour address by noting that this was a daunting time to live in Michigan and talk about commercial real estate and business growth in the same breath.

“But we’re not moving to Texas,” he said.

Meijer supported his statement by saying the company plans to open five new stores this year, regardless of the economy, and three will be in Michigan, which has been in a recession longer than any other state.

One store will be a homecoming of sorts as the company is going back to Cedar Springs, the site of the second-ever Meijer store that opened decades ago. Meijer said he has seen enough economic growth over the past few years in the northern portion of the county to warrant such a return.

Another will be built in Gaylord. Others will go up in Hartland, Mich., Delaware, Ohio, and Marian, Ind. Three of the five will be smaller versions of the company’s trademark superstore — meaning those stores, like the one planned for Cedar Springs, will be 156,000 square feet instead of 190,000 square feet.

Meijer will also build a new distribution center this year between Detroit and Monroe and will remodel eight stores, mostly in southeast Michigan.

“We are committed to new stores in Michigan and the remodeling of others,” he said.

Meijer said all new stores will be LEED compliant, but not certified. He explained that the only difference between the two is the cost of attaining certification. “In terms of new store construction, that is what we will do.” The company will also add wind turbines to its headquarters in Walker and to a pair of stores in lakeshore communities.

The tens of millions of dollars that Meijer Inc. will spend this year comes on the heels of a similar amount the company spent last year when it opened eight new stores. Four of those replaced existing stores. Another would have been replaced on the southeast side of Grand Rapids last year, but complaints about construction noise from neighbors caused Meijer to put that project on the shelf.

Meijer said his stores have seen strong sales growth in the metro Chicago area, where there are 11 Meijer stores. But he also said it will be difficult this year to maintain both sales and profits and the company may have to sacrifice some margin to maintain the sales revenue. He added that Meijer Inc. has seen growth in market share and has also climbed higher on the “friendliness” scale.

“We’ve got to be a friendly place to shop,” he said.

As for the company’s immediate future, Meijer said he hopes to be adding talent instead of laying off people this year and opening stores instead of closing them. He sees sales growth for the company’s brands, but worries about the domestic auto industry because southeast Michigan is Meijer’s largest market.

“It’s a huge concern to us because we are dependent on people who work in manufacturing,” he said.

At the start of this year, Meijer Inc. had 185 locations in five Midwestern states.

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