Vacant grocery stores are hot properties as traditional supermarkets close, discounters expand

Third-generation grocer David Mandell owned seven supermarkets in Queens and on Long Island when he was approached by a landlord about taking over a space a King Kullen grocery store would be vacating.

For Mandell, King Kullen’s exit in 2022 created an opportunity to expand without requiring him to build a new store, something he couldn't afford to do and had no interest in, he said recently. 

He looks for opportunities where other grocers have failed or when their lease runs out, he said.

"We’re looking for value investing," he said. 

Vacated supermarket spaces don’t stay empty for long on Long Island as new and existing grocers swoop in. They're battling for food dollars on the Island — a high-income, high-cost region — while landlords' desire for grocery-anchored properties grows, retail experts said. 

Growing grocery store competition on Long Island in recent years has led to a fierce game of musical chairs for retail spaces. This comes as the number of traditional supermarkets on the Island shrinks and discounters and high-end players expand. 

Of the 19 grocery stores that have closed on Long Island in the last five years, about half of those spaces have been leased to other grocers.

The leasing market for grocers on Long Island has never been stronger, said Brian Schuster, a vice chairman at Ripco Real Estate LLC in Woodbury who focuses on retail.

"I’ve been in the business since 1990, and I don’t think I’ve seen this level of supermarket activity," he said.

While the overall number of supermarkets on Long Island has been declining for the past two decades, the diversity in the types of stores has been increasing, giving consumers more choices, experts said.

In 2025, the number of supermarkets and other grocery stores on Long Island totaled 726, a decline of 330, or 31%, from the record-high of 1,056 in 2008, according to the New York State Department of Labor.

Meanwhile, the average number of employees per store grew from 25 to 37 during the same period, indicating that more large stores are on the Island now.

The Long Island grocery store landscape is evolving as discount grocers, such as Aldi and Lidl, carve out a bigger share of grocery sales as inflation-sensitive consumers seek bargains, while high-end players, including Whole Foods Market and Long Island-based Uncle Giuseppe’s Marketplace, get boosts from wealthier households seeking natural, premium and unique products, grocery experts said.

Vacant retail spaces in demand

Of the 19 grocery stores that have closed on Long Island in the past five years, 10 of those spaces are occupied by or slated for other supermarkets, while four have been leased to other types of businesses. The remaining five former grocery store spaces, four of which closed in the last 12 months, are not yet leased, the landlords said.

Retail landlords prefer to have grocery stores on their properties because they are more resilient to e-commerce competition than clothing and shoe stores, said Paulina Rojas Schmidt, senior analyst at Green Street, a Newport Beach, California-based real estate information provider. 

They also help other tenants on the property — and boost rent rates — by increasing foot traffic to other stores on the properties, she said. 

Nationwide, the vacancy rate for grocery-anchored properties is 4%, compared with 6.3% for non-anchored centers, according to JLL, a Chicago-based real estate firm. That translates into grocery-anchored centers charging base rent that is 4.4% higher than that of non-anchored centers. 

For Mandell, the Franklin Square space vacated by King Kullen was a good location to open Holiday Farms.

Mandell opened his 20,000-square-foot store in September 2022 after the shopping center's landlord, Breslin Realty Development Corp. in Garden City, decided not to renew the lease for the nearly 50-year-old King Kullen that was the anchor store at the property. 

King Kullen was a good tenant but Holiday Farms was brought in to improve foot traffic in the shopping center and bring in the new products and specialty items shoppers wanted to see, Breslin executives told Newsday in 2022.

Mandell's Franklin Square supermarket is performing well, with its sales being 10% higher than the previous King Kullen store a year after opening and growing at least 10% annually since then, he said.

But the challenges of operating grocery stores, including rising insurance and wage costs, consumers’ growing use of GLP-1 weight loss drugs leading to less food consumption and expanding competition from Amazon and discounters, have not escaped him, he said. 

He closed his struggling, 2-year-old Holiday Farms supermarket in Woodbury in February 2024 and sold an underperforming Queens store in March 2025.

With six stores remaining, Mandell said he and his staff work hard to be responsive to customers’ evolving needs, such as the increased demand for gluten-free and high-protein products, he said.

"This is what we do. We're trying to stay alive. We're trying to stay relevant. We give people what they want," he said. 

Most vacant spaces leased to other grocers

Long Island is a strong draw for grocers seeking to expand in or enter the region because it is a high-income, densely populated area, Schuster said. So, even grocery stores that fail on Long Island are replaced relatively quickly.

"Grocery store retail can be viewed as a strength for most retail markets, and [the Long Island grocery store leasing rate] reinforces the strength of grocery-anchored real estate here rather than undermining it," David Caputo, a data scientist at Moody’s Analytics, a financial intelligence provider in Manhattan, said in an email.

Furthermore, of the 19 Long Island supermarket closings in the last five years, 13 involved Amazon Fresh, King Kullen and Stop & Shop, chains that were dealing with their own corporate or financial pressures, not issues specific to Long Island as a market, he said.

King Kullen Grocery Co. Inc., a nearly century-old grocer that is the largest family-owned supermarket chain on Long Island, has closed 14 stores since 2015.

King Kullen cited underperformance as a reason for most of those closings. The Hauppauge-based company has entered into a deal with an Oakdale-based grocer, Giunta's Meat Farms, which will acquire King Kullen's remaining 24 supermarkets and four Wild by Nature stores in a deal expected to close this month, both companies announced in July.

Most of those former King Kullen spaces have been leased to other grocers, including the Giunta’s Meat Farms supermarket that opened in November in a Middle Island space that King Kullen vacated in July 2025.

Quincy, Massachusetts-based Stop & Shop, which is owned by Dutch company Ahold Delhaize, is the largest grocer on Long Island, where it has 46 stores. But Stop & Shop closed 32 "underperforming" stores in five states in 2024, including four supermarkets on Long Island — in Greenvale, East Meadow, Hempstead and Coram.

Three of those four spaces have been leased to other grocers.

The former Stop & Shop space in Greenvale has been occupied by Uncle Giuseppe’s Marketplace, an Italian specialty grocer, since last month.

In East Meadow, Walmart is seeking approval from the Town of Hempstead to expand its approximately 60,000-square-foot existing store into a supercenter by taking over the vacant Stop & Shop space next door.

A Food Bazaar Supermarket opened in Stop & Shop’s former space in Hempstead on Sept. 20, 2024, the day after Stop & Shop closed. 

Stop & Shop's former, 66,194-square-foot space in Coram will be split between two non-grocery tenants.

A Crunch Fitness center will move into about half of the space in Coram Plaza in 12 to 18 months, said Charlie Friedler, a broker at Momentum Realty Group in Manhattan who is representing the landlord, AVGI.

The landlord is in negotiations to lease the rest of the former Stop & Shop space to a family entertainment center, he said.

Betting on groceries

Some landlords find that adding grocery stores can turn around distressed properties.

In the summer of 2019, Huntington Commons was a struggling shopping center on New York Avenue with a lease rate of 43.8%, after Kmart closed in February that year, according to landlord Urban Edge Properties’ disclosure document.

The 208,000-square-foot shopping center is now 100% leased, following a $31.2 million renovation that included the addition of a ShopRite grocery store in 2022, off-price clothing and home goods store Burlington in 2023, and other smaller shops in recent years.

"Everybody at the center has experienced more traffic, has experienced an improvement in sales. And when we’ve had a vacancy, we’re getting a lot more inquiries from quality tenants that we want to be in the shopping center than we did when the center was anchored by Kmart," said Scott Auster, executive vice president and head of leasing for Urban Edge. 

Of the 76 retail properties that Urban Edge owns, mostly in the Northeast, 80% are anchored by grocery stores, which allows the Manhattan-based real estate investment trust to charge higher rent at those properties, Auster said. 

Urban Edge’s four properties on Long Island include a building occupied by Bingo Wholesale, a kosher supermarket that opened in 2024 in Inwood, at 603 Burnside Ave. A Stop & Shop store relocated from that space to Woodmere in 2020.

Bingo Wholesale is performing better than Stop & Shop in the space because it caters more to the community, which has a high percentage of Orthodox Jewish residents, Auster said. 

"So, it’s just a matter, in some cases, of having the grocer that appeals to the community and has the merchandise that’s appropriate for that community because, if you don’t, the customer is going to seek it elsewhere," he said.