Will grocery stores come to under-served neighborhoods? Officials say it’s not that simple

In the wake of multiple housing complexes and subdivisions being developed throughout the city, some residents in or near Rio Rancho’s under-served neighborhoods wonder whether a grocery store may soon come to them.

Officials say it’s not that simple.

The city can’t unilaterally bring in a grocery store – the company has to decide it wants a store in the area.

“They’re all looking for population density,” said Jerry Schalow, president and CEO of the Rio Rancho Regional Chamber of Commerce.

Rio Rancho City Manager Matt Geisel said he’s heard people plead for grocery stores near the Northern Meadows and Mariposa neighborhoods over the years. However, he said there’s more than just rooftops to consider.

Geisel also said Mayor Gregg Hull’s stressing of city-funded projects like extending utilities along King Boulevard toward Unser Boulevard to help attract retailers.

“The lack of infrastructure kind of scares people away,” he said, adding that project will help make that area more “site-ready” while also improving the roadway network.

When it comes to neighborhoods like North Hills and Northern Meadows, Schalow said more services, restaurants and businesses would need to be added there, and grocery stores will follow. He said those neighborhoods have been asking for a grocery store for years, but the challenge is establishing infrastructure like water and gas.

“That area along Unser is kind of deprived,” he said. “You’ve got to have completed roads. You’ve got to have infrastructure, and you have to have population density.”

Schalow said that while North Hills and Northern Meadows would help provide population density west of Unser Boulevard, the undeveloped area along the east side Unser north of Northern Boulevard would have to be addressed. He also said infrastructure becomes more challenging the farther north you travel away from Northern Boulevard because the roads become single-lane roads.

Deciding factors

Geisel said drive patterns and daytime populations are other variables in deciding where a store would be established.

He said it’s also important for a retailer to pick a location that can capture multiple markets featuring greater population densities close by and people driving by those areas, such as the Paseo del Volcan corridor.

“(Retailers’) obligation is their shareholders. Our obligation is serving our citizens. You look for opportunities where those two overlap,” he said.

Bob Feinberg, senior vice president and principal of commercial developer Colliers International, said the deciding factors are population density, competition in that area and competitors’ projected sales numbers. He also said it ultimately comes down to a return on investment as opposed to simply making a neighborhood happy.

“If they can see a good ROI based on density and competition, they’ll put a store in the neighborhood,” he said. “Since COVID, these grocery stores have become much more sensitive to where their capital expenditures are going. … They have a certain amount of capital every year that they can spend, and they’re going to put their dollars (toward) the most profitable ROI opportunity.”

Feinberg also said there’d need to be about 3,000 homes or about 10,000 “mouths to feed” in a neighborhood before developers would even start looking at that area.

“It’s all about the numbers,” he said. “Again, it’s the functionality of where (a store’s) capital is best spent, where they feel it is most needed and will be the (most) productive for them.”

System-level infrastructure

Geisel said the city’s looking at system-level infrastructure improvements that “benefit multiple folks.”

For example, improving Unser benefits 40,000 residents driving up and down that road daily and makes it a better commercial corridor.

Geisel said city can control having good, predictable development processes. If the city deems an area a good spot for retailers, he said the city has control over things like whether the appropriate zoning is in place to support that.

“There’s many variables that influence that,” he said.

As the community grows, whether it’s residential or via job creation, Geisel said retailers will see that while analyzing the area.

Possible locations

Schalow said an ideal grocery store location would be near the Lowe’s at Northern Boulevard and Loma Colorado Boulevard.

That area’s within six miles of North Hills and Northern Meadows, and within 12 miles of Mariposa. That’d also mean residents won’t necessarily have to make their way to the downtown area to shop.

“That has increased population density. It has water, gas, sewer, electric, all ready to go. Right there, they can put in a grocery store,” Schalow said.

He said having a store in the City Center area near Unser and King would help with expanding economic development because of things like restaurants.

He also said there was a recent inquiry about a stretch of state land near Cleveland High School that could serve as a shopping center location.

Natural Grocers an option?

After Rio Rancho added a Natural Grocers location on NM 528, just north of Southern Boulevard, in August 2020, Geisel said that alone was a “great win for Rio Rancho.

“For a long time, people have been asking for more natural, organic-type groceries… (Natural Grocers) took the leap of faith and came to Rio Rancho… They’re very happy with that decision,” he said.

How adding pharmacies can help

Schalow said pairing a grocery store with a CVS or Walgreens would help ensure a store sets up shop in a neighborhood because those two pharmacy chains have been more aggressive in adding locations in lower-density areas over the last 20 years.

He also said there are no CVS locations near Mariposa or Enchanted Hills, which presents an opportunity because of both neighborhoods’ proximity to US 550. Walgreens has stores at Northern and Unser, and on Enchanted Hills Boulevard, just west of NM 528.

“That is a growing area with growing needs,” he said. “Having something as simple as a CVS or Walgreens that can offer bread, milk, pharmaceuticals, maybe some school supplies, those type of things, would benefit that area.”