Online competition forcing the closure of big box stores in DeKalb

4:52 p.m Friday, Feb. 9, 2018 Local
The administrative offices for Atlanta Sports City are housed in space formerly occupied by Kohl’s at Stonecrest Mall. (TIA MITCHELL/TIA.MITCHELL@AJC.COM)

Stonecrest Mayor Jason Lary was a frequent shopper at the city’s Sam’s Club, and he said the parking lot always seemed to be swarming with customers.

So, he was shocked last month to get a call from DeKalb Commissioner Mereda Davis Johnson. She told him that the store had shut down abruptly and laid off nearly 200 people.

“I was just absolutely on the floor,” said Lary, who went to the store and saw employees arriving at work only to be turned away with tears in their eyes.

Sam’s Club is just the latest big box retailer to shutter in Stonecrest. At the mall across the street, both Sears and Kohl’s are gone. Last month, it was announced that a Babies “R” Us in the area would close. A Target closed in 2014. Elsewhere in south DeKalb, Publix, Walmart Neighborhood Market and Kroger have shut their doors.

Tia Mitchell
The Sam’s Club in Stonecrest closed abruptly on Jan. 11, 2018.

These closures are evidence of a nationwide trend as big box stores react to online competition, particularly websites like Amazon.

“We see the issue, and the issue is not south DeKalb,” Johnson said. “The issue is e-commerce and retail.”

The shutdowns also reflect a shift in how people choose where to shop, said Ray Gilley, president of Decide DeKalb development authority. People tend to seek stores close to where they work, and most employers are concentrated in Atlanta, near the airport or in northern cities like Dunwoody.

Phillip Keene, a Walmart spokesman, said the Sam’s in Stonecrest was not meeting financial targets. It was among more than 60 stores nationwide that were closed.

“We felt like we could serve our existing members at nearby clubs and that they could have access to samsclub.com as well,” Keene said.

The next closest Sam’s is 15 miles away in Tucker.

Walmart is paying employees for 60 days as part of its effort to comply with federal law regarding notifications prior to mass layoffs. It also says it is trying to transfer workers to other stores.

WorkSource DeKalb provides job training and placement services for unemployed residents, and the Georgia Department of Economic Development sometimes step in with additional resources.

Tia Mitchell
The Sears at Stonecrest Mall is closed but there is still lettering on the doors.

Besides helping people find jobs, local officials say their priority is to keep the Sam’s store from sitting empty for long. Walmart owns the building, so it has ultimate say in how long the building remains dark.

The same day the store closed, Lary said he cold-called competitors like BJ’s Wholesale Club and Costco to see if they were interested in moving in.

“The question is, will the Sam’s corporation allow competition to go into their property? Because we can’t make them sell it to anybody,” Lary said.

Keene said the company could eventually put the property on the market, but no decisions have been made. Even after the building is emptied, the site will be maintained, he said. The company has said some of the closed stores will be reopened as regional distribution centers, but it hasn’t decided if Stonecrest will be one of them.

“We have a tremendous obligation to keep that building and those grounds as nice as possible because, if for no other reason, we have a Walmart store right next to it,” Keene said.

Officials say the empty big-box stores and their cavernous shopping spaces could be re-purposed for other businesses, such as call centers or distribution facilities. For example, the space formerly occupied by Kohl’s at the mall is now the administrative offices for Atlanta Sports City.

Gilley said his organization, which focuses on attracting new businesses to DeKalb and helping existing ones expand, tries to help potential buyers of empty stores think outside of the box.

“What else could be they be?” he said. “Not just what they were.”