ST. PETERSBURG — Lucky’s Market is closing its only Tampa Bay location and practically pulling out of Florida completely following grocery giant Kroger’s decision to divest in the specialty chain last month.
Regional store director Jason Rief told the South Florida Sun-Sentinel newspaper that Lucky’s will close all of its Florida locations, except for the one in Melbourne, by Feb. 12. Employees were informed early Tuesday morning. This likely means the planned Lucky’s markets in Clearwater and Brandon, which were nearing completion, will be shelved.
Representatives of Lucky’s Market did not not return requests for comment on Tuesday.
Lucky’s Market opened its St. Petersburg location in June 2018 in a section of Tyrone Square Mall that was once a Sears. Although the grocer’s corporate headquarters are in Colorado, Florida had 21 locations — about half of the chain’s total footprint.
Kroger began investing in Lucky’s in 2016, while competitors such as Sprouts Farmers Market and Earth Fare grew their own chain of organic grocery stores throughout Florida. Kroger used the niche and trendy store as an in to the Florida market, which has long been dominated by Publix.
Since 2016, Kroger helped more than double the number of Lucky’s stores, mainly in Florida. Kroger never disclosed the exact workings of the partnership or its initial investment, but the grocery giant did purchase some of Lucky’s Florida real estate.
“We’re going through a period of adjustment,” said consumer analyst and food marketing expert Phil Lempert. “We have a lot of over-stored areas in the country.”
Kroger, according to its investment report from December, wasn’t seeing the return it expected from the grocer that promised “organic for the 99 percent.”
"The amount of investment that it would take for Lucky’s to be a meaningful contributor to Kroger overall, and the efforts that it would take, we just didn’t think it created a good return for the investments that were needed to be made,” Kroger CEO Rodney McMullen said during a phone call with investors last month.
Lucky’s Market closures will affect 2,500 employees. Liquidation sales begin on Wednesday.
Lempert said Kroger likely will focus its investments in robotics and other mechanisms to make delivery more profitable.
The biggest losers in this shakeup likely will be the real estate owners. Lempert expects a mix of outcomes for Lucky’s abandoned stores: Some may be taken over by competitors, like Publix’s new GreenWise Market stores, while other properties may remain vacant.
“Every chain is looking very close at locations right now,” Lempert said. “Expansion will slow down while we figure out the economics.”
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The Clearwater Lucky’s Market was taking over an old Albertson’s store and the one in Brandon a former Kmart. The Clearwater Gulf to Bay property is owned by Tampa’s Greenleaf Capital. An Ohio firm, Sites Centers, is the developer behind the former Kmart.
Lucky’s was started by two chefs in 2003. The store emphasized affordable, fresh produce as well as gourmet and prepared food. It may have been best known for “sip n’ shop," which allowed shoppers to drink wine and craft beer while browsing the grocery aisles.