Star Market to close its store in Kaneohe

The supermarket chain tells the state it will close the site in 2007

Star Markets Ltd. has decided to close its Kaneohe store sometime after Feb. 5 of next year.

The grocery retailer notified the director of state Labor and Industrial Relations Tuesday of its plans for the Kaneohe branch store at 46-023 Kamehameha Highway, but did not give a reason for the closure.

The company said it has yet to decide the fate of the 41 employees who work there.

Karl Wissman, the president and CEO of Star Markets, did not return calls for comment by press time.

On Oahu, Star Markets still has stores on South King Street in Moiliili, at Kahala Mall, Kamehameha Shopping Center, Mililani Town Center and Ewa Beach Shopping Center.

The Kaneohe store -- adjacent to Kaneohe Bay Shopping Center, which is anchored by Safeway and Longs Drugs -- has a faded exterior, but also offers a garden supply shop.

Retail real estate analyst Stephany Sofos said the closure could be the result of growing competition from big box competitors such as Costco and Wal-Mart.

"The profit margin for grocery stores is very low," said Sofos. "Competition is more fierce. It's all about convenience, quality, cost and service."

Sofos said Star Market's Kaneohe location, visible from Kamehameha Highway, is ideal for another retail business like Walgreen Co., which is scouting locations to enter the Hawaii market.

In order to remain competitive, Star Markets in 2004 spent $2 million upgrading all its stores, starting with the one in Moiliili.

Another Star Market store's future also remains uncertain, given that its lease for a 25,000 square foot space at Kahala Mall expires in March of next year. The mall management yet to renew or extend the lease.