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Retail Roundup: New BJ's Wholesale Club proposed for Macy's site

Macy's, at 2 Veterans Memorial Hwy. in Commack,

Macy's, at 2 Veterans Memorial Hwy. in Commack, on Thursday. The shopping center's landlord has submitted plans to Smithtown to demolish the department store. Credit: Chris Ware

Bulk-buying bingers might be pleased to learn that a BJ’s Wholesale Club is planned for Commack.

But a nearly 20-year-old Macy’s would leave first, making room for the new arrival, a Smithtown official said.

On Wednesday, the landlord for Commack Shopping Center, which includes Macy's Plaza, submitted plans to Smithtown to demolish the department store’s space at 2 Veterans Memorial Hwy. and replace it with a new home for a BJ’s, town Planning Director Peter Hans said.  

Macy's, however, says that it's staying put, at least for now.

“We have an active lease at Commack Shopping Center with no plans to vacate at this time,” Cincinnati-based Macy’s Inc. said.

It could not immediately be learned when the lease expires.

BJ’s declined to disclose details about its plans, other than mentioning its four new clubs scheduled to open in Michigan and Florida by early 2020.

“At this time, we have no additional information on future locations but are actively reviewing opportunities to bring the value of a BJ’s membership to new communities,” said Kristy Houston, spokeswoman for the Westborough, Massachusetts-based company.

The shopping center is owned by Commack Shopping Center Associates, which is an affiliate of and shares an address with the Feil Organization, a Manhattan-based real estate investment and development company that lists the shopping center in its retail portfolio.

Feil declined to comment.

But, as of Friday morning, Feil’s website no longer showed Macy’s on a map of the shopping center.  A sign in the shopping center's parking lot bears the name Macy's Plaza, but that section of the property is referred to online as Commack Plaza and shown as part of Commack Shopping Center.

Commack Shopping Center Associates submitted an application to Smithtown’s board of zoning appeals for variances related to the planned construction of a single-story, 104,102-square-foot store for BJ’s, Hans said. The application requested variances to reduce landscaping requirements and increase the parking buffer, he said.

The board of zoning appeals would conduct a hearing Oct. 22, and could vote the same day, Hans said.

The project also requires the town’s approval of a site plan, but Commack Shopping Center Associates likely would apply for that only after getting approval of its variances, he said.

The entire approval process would take six to eight months, he said.

Sought-after space

The Macy’s space in Commack has been occupied by several previous tenants, including S. Klein department store, starting in 1962; Korvettes discount store, beginning in 1977; and Stern’s department store, starting in 1984, according to Newsday archives.

In 2001, Macy’s parent company, then known as Federated Department Stores of Cincinnati, decided to shut down its less-profitable Stern’s chain, which operated 24 stores in New York and New Jersey. Federated converted some of the Stern’s stores, including the Commack location and two others on Long Island, to Macy’s.

I’ve written before about how grocery competition is becoming more fierce on Long Island, with German discount grocer Lidl’s foray into the area with its takeover of the Best Market chain this year, high-end grocer Whole Foods opening its fourth store on Long Island in April and German discount grocer Aldi planning its entrance into Nassau County with a new store in Valley Steam in spring 2020.

At this point, BJ’s ranks seventh among all stores that sell groceries, including drugstores and convenience stores, on Long Island, where it has 11 stores and 5.6 percent of the market share, according to a June report from Food Trade News, a Columbia, Maryland-based publication.

Competition for Costco

But another wholesale club chain, Costco, is performing better than BJ’s on Long Island, where it ranks third, with eight local stores and 7.92 percent of the market share among all grocery sellers.

There is a Costco in Commack, so a new BJ’s might give it a run for its money, since they would be only 2.1 miles away from each other.

The Macy’s in Commack, which is in close proximity to the Northern State Parkway, the Long Island Expressway and the Sagtikos Parkway and in an area with a large population of high-income residents, is in a prime retail location, said retail expert Burt Flickinger III, who founded the Manhattan-based consulting firm Strategic Resource Group and has studied Long Island retail.

“It’s an incredible coup for BJ’s to get that location,” he said.

BJ’s Wholesale Club Holdings Inc. operates 217 clubs and 141 gas stations in 16 states. The chain went public again in summer 2018, after seven years of being private.

BJ’s has been faring well these days, particularly in its general merchandise segment (clothes, hardware, sporting goods, electronics, etc.), as shoppers are more willing to buy things they don’t need, said Chuck Cerankosky, who covers retail sectors as the managing director at Northcoast Research, an equity research firm in Cleveland.

“With households earning more in this economy, they’re going to spend more on fun stuff, whether it’s kayaking or clothing, not buying more bananas or the other consumer staples,” he said.

Excluding gasoline sales, BJ’s sales at stores open at least one year increased 1.6 percent in the second quarter of fiscal 2019, compared with the same period a year earlier.

Retail Roundup is a column about major retail news on Long Island — store openings, closings, expansions, acquisitions, etc. — that is published online and in the Monday paper. To read more of these columns, click here. If you have news to share, please send an email to Newsday reporter Tory N. Parrish at tory.parrish@newsday.com.

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