RICHARD WALKER / RWALKER@STARBULLETIN.COM Grocery Outlet in Kalihi was doing well as a business, its owner says, but the building's owner would not renew the lease. Above, shoppers walk toward and into the store, which posted signs announcing the closure over the weekend. CLICK FOR LARGE

Grocery Outlet calling it quits

The store in Kalihi is the last of the chain to close its doors in Hawaii

The last Grocery Outlet store in Hawaii is closing its doors at City Square Shopping Center in Kalihi.

Albert and Mae Respicio have owned and operated the store at 1199 Dillingham Blvd. for the last 10 years, but will be closing the store this spring because the lease has expired. The building's owner, RCK Partners Ltd., has decided not to renew the lease.

"We're disappointed," said Albert Respicio. "A lot of our regular customers are also disappointed that we're closing. We have a lot of regulars that look at us as family members."

The store will likely close some time at the end of March, said Respicio, depending on when merchandise is sold out. The lease ends in April.

RCK Partners, a real estate development firm that developed and manages City Square, could not be reached for comment yesterday.

Kamehameha Schools owns the land beneath the store's building.

The news of Grocery Outlet's closure comes on the heels of several other announcements of grocery store closures in recent months.

Among them are 99 Ranch Market in Mapunapuna, which announced in December it would close this month, and two Star Markets, one in Kaneohe and one in Kahala, which will also close when leases expire.

Grocery Outlet fills a niche for shoppers looking for discounted merchandise.

The company, headquartered in Berkeley, Calif., purchases excess inventory directly from manufacturers such as Procter & Gamble Co., and then offers them to customers at a 40 percent to 60 percent discount.

There are currently more than 120 Grocery Outlets in six western states and Hawaii, most of them independently operated by locally-based families. The local operators make a commission based on how much they sell, but run their own business and manage their own employees while Grocery Outlets Inc. takes care of the store lease and purchases equipment.

The more than 20,000-square-foot outlet in Honolulu offers discounted, brand-name groceries, frozen foods, housewares, beer, wine and health and beauty goods, dozens of them from local vendors.

Albert Respicio said about 20 employees at the store, which he thinks of as family, will lose their jobs.

Gilbert Leong, a Kaneohe resident who has shopped at Grocery Outlet every week for the last 10 years, said he would be sad to see the store close.

"I used to be in the retail business, so I know about good prices," said Leong. "You can't find prices for beer any lower. You save quite a bit here."

Another customer, downtown Honolulu resident Toby Swanson, was also sad to learn of the store's closing.

"I come in for two to three things, and I leave with 40 things," said Swanson, who has been shopping at the outlet for the last seven years.

Marketing analyst Marty Plotnick said across the state, warehouse clubs such as Costco and Sam's Club are eventually taking more and more business from supermarkets.

"The warehouse clubs are the supermarkets of today, period," said Plotnick. "I have no statistics to base this on, but we're going to see a continued attrition in what we have called the traditional supermarket."

He said that Grocery Outlet filled a niche for a lower-income demographic, but that it, too, lost customers to the discount warehouse clubs.

Respicio said he would take some time off and look for another business venture, but that he would not be looking for a new location for the Grocery Outlet.

"It's just time for me and my wife to do something else," he told the Star-Bulletin. "I just want to take some time off and take a vacation that I haven't taken in 10 years."

Grocery Outlet opened at City Square in Dillingham in the spring of 1997 after relocating from Waianae Mall, where it had been open for about a year.

Respicio said at one point, there were four locations, including three on Oahu, in Waianae, Aiea and Dillingham, in addition to one on Maui.

The Dillingham store is the only Grocery Outlet left in Hawaii.

Glenn Kaya is the developer of City Square, currently home to more than 20 tenants which include Sugoi Bento & Catering, Koolau Gardens and Young's Fish Market. Kaya also owned the GEM discount cooperative store, which closed in early 1994.

Respicio said Grocery Outlet was doing well as a business, but that RCK Partners had different plans for the building of which he didn't know the details.

The average Grocery Outlet is about 20,000 square feet, with an annual sales averaging $5 million, according to the company's corporate Web site.