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Woodman's Food Markets Inc., which operates massive supermarkets throughout Wisconsin, is entering the Milwaukee area with a $15 million development in Oak Creek - presenting a new, formidable competitor to the Pick 'n Save chain.
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Woodman's will open a 237,000-square-foot store on the west side of S. Howell Ave., one block north of W. Forest Hill Ave.
An unused portion of Delphi Corp.'s automotive parts manufacturing complex, sold this summer to developers, will be demolished to make way for the store.
Janesville-based Woodman's owns some of the nation's largest supermarkets.
The company operates or has under construction 11 stores in Wisconsin and northern Illinois.
The Woodman's closest to Milwaukee, near I-94 and Highway 50 near Kenosha, includes a gas station, a frozen pizza section with three aisles and 20 pizza brands, an 11,000-square-foot liquor department carrying some 1,000 wines and 30 checkout lanes.
The Oak Creek store will be somewhat smaller than the Kenosha store, which covers 250,000 square feet, said Bret Backes, Woodman's vice president of real estate.
Each Woodman's store stocks around 67,000 to 70,000 items, he said.
The typical conventional supermarket, with around 46,000 square feet, stocks around 15,000 items, according to the Food Marketing Institute, a trade group.
Pick 'n Save stores average 70,000 square feet, said David Livingston, an industry consultant based in Pewaukee.
The Oak Creek store will have 250 employees, including 80 full-time workers, Backes said.
Woodman's plans to begin construction by next fall, after the site is rezoned and the present building razed. The store will take 12 to 15 months to build, he said.
Woodman's will provide strong competition for Pick 'n Save, the Milwaukee area's dominant supermarket chain, Livingston said.
In some ways, Woodman's resembles Wal-Mart Stores Inc., the nation's largest supermarket operator, through its heavy buying power and low cost structure, Livingston said.
He said Woodman's prices are generally around 12% lower than prices at Pick 'n Save.
While Wal-Mart operates combined supermarket-discount stores, known as Supercenters, Woodman's gets the vast majority of its sales from grocery items.
Because of its size, Woodman's draws customers from a much larger area than a conventional supermarket.
About 90% of those customers come from a radius of five to 10 miles, Backes said.
A conventional supermarket draws most of its customers from a two- to three-mile radius, Livingston said.
The Oak Creek Woodman's will be within three miles of four Pick 'n Save stores. Three are in Oak Creek, at 8770 S. Howell Ave., 2320 W. Ryan Road and 6462 S. 27th St.
Also within that three-mile radius is a Pick 'n Save at 2931 South Chicago Ave. in South Milwaukee.
Livingston said those stores probably will initially lose sales to Woodman's.
Pick 'n Save, which has around 60% market share in the Milwaukee area, will likely eventually gain back some sales that it loses to Woodman's, he said.
Livingston said Woodman's, coupled with the continued strength of Pick 'n Save, could force the closing of smaller, older groceries in Oak Creek and surrounding communities.
Also, Pick 'n Save stores closest to Woodman's will probably be forced to cut their prices, Livingston said.
Vivian King, spokeswoman for Roundy's Supermarkets Inc., the corporate parent of Pick 'n Save, said the company doesn't comment on its competition.
Pick 'n Save has faced less competition in recent years because of the 2003 shutdown of Kohl's Food Stores Inc., as well as the closing of several Sentry Foods stores throughout the Milwaukee area since 2001.
And while Wal-Mart has opened dozens of Wisconsin Supercenters since 1997, it has yet to develop one in Milwaukee County.
Wal-Mart's attempts to build a Supercenter in Franklin, just west of Oak Creek, were dropped last year because of opposition from residents and environmental and labor groups.
The Oak Creek Woodman's will be built on 29 acres made available by razing around 370,000 square feet of obsolete manufacturing space formerly used by Delphi.
That space, along with an unused office building, was sold by Delphi in June to a real estate investment group led by Frank Giuffre for $2.9 million. It had been on the market for more than a year.
Giuffre has since formed a partnership with Willow Tree Development LLC, a Milwaukee firm.
The partnership is selling the site to Woodman's and will also develop additional retail and industrial space on 27 acres west of Howell Ave. and north of Forest Hill Ave., said Michael DeMichelle, a Willow Tree principal.
Troy, Mich.-based Delphi had space to sell because of the continued downsizing of its auto parts business.
Declining sales among U.S. automakers, combined with high prices for raw materials, have hurt Delphi and other auto parts makers.
Delphi, which is reorganizing under Chapter 11 bankruptcy, is considering closing part of the remaining Oak Creek plant, according to an internal company memo obtained this week by a Detroit newspaper.
That closure would eliminate 900 jobs.
Woodman's will probably open two other stores in the Milwaukee area, said Livingston, who said the company's two stores in Madison both ring up heavy sales.
Livingston said likely areas for other Woodman's stores would be in Waukesha County, perhaps in New Berlin, and in the Menomonee Falls/Germantown area.
The Oak Creek Woodman's will be the latest in a string of new retail developments on Howell Ave.
Those projects include a new Target Store at 8989 S. Howell Ave.; a major remodeling at Oak Creek Centre, a shopping center at 8581 S. Howell Ave.; and a 33,000-square-foot shopping center, including a 16,500-square-foot Ace Hardware store, being built by Willow Tree Development just south of the planned Woodman's.
Woodman's will help draw other businesses to Oak Creek, Mayor Dick Bolender said.
"When it's a good spot, people go there," Bolender said. "You get business off of location, location, location."
Woodman's Food Markets Inc. will open a 237,000-square-foot supermarket, with 67,000 to 70,000 items, in Oak Creek. Woodman's operates some of the nation's largest supermarkets, including a 250,000-square-foot store near Kenosha that includes a frozen pizza section with three aisles and 20 pizza brands; an 11,000-square-foot liquor department carrying some 1,000 wines; and 30 checkout lanes. The average Pick 'n Save supermarket has around 70,000 square feet.
Linda Spice of the Journal Sentinel staff contributed to this report.
