Bargain Mart to close Red Rock store; lease cost increase blamed
The Westside Bargain Mart, which specializes in food items that are past their sell-by dates (and therefore discounted in price), is closing.
The last day for the 12,000-square-foot location in the Red Rock Canyon shopping center will be Saturday, Sept. 4. The business had been at Red Rock since October 2006 (after starting a year earlier in the former Race Car Museum building in Manitou) and averaged 250 customers a day, according to co- owner Jim Krug.
Coming up on a five-year lease renewal, Krug and his wife/co-owner Diane turned down the landlord's offer to continue the current rate of $13,500 a month for one year followed by annual increases that would have raised it to $16,000 by 2016.
“That's the toughest part,” he said. “We can't justify paying that kind of money every month. A lot of customers depend on us and our prices, but at the same time we have to survive.”
He also wondered about the future of the Red Rock center in general, because he thinks the ownership is overpricing its lease rates during difficult economic times. For example, a large restaurant left there last year (leaving a space that has not yet been filled), and Krug said he knows of other businesses that are just waiting for their leases to run out.
A representative of the Red Rock center owner, JFRCO LLC (a business name for the Joseph Felix Realty Company in Denver) could not be reached before press deadline.
The Krugs own another Bargain Mart in town. They opened it in the Mission Trace shopping center in southern Colorado Springs a year and a half ago, initially as a “back-up” to the Westside store, Jim Krug said.
The site has worked out well. The rent there, for about the same amount of space as at Red Rock, is $5,500 a month, he said. And, “a lot of days, it [the southern store] is outselling this one.”
He and Diane looked for another Westside site, but could find nothing suitable. The unsuccessful search did not leave them totally disappointed. Sales on the Westside have been down of late, and “there's been a little burnout from running two stores,” he said. Also, he expects that, because of the increasing complexity and expense in obtaining out-of-date items (“salvage,” as he calls them), it will be easier to stock just one store instead of two.
The complexity stems mainly from the recent-years consolidation of grocery store chains and the tendency of two of them (Kroger and Wal-mart) to simply donate salvage goods to charity instead of selling them to buyers like himself, Krug said. While he noted that he supports the charity aspect, the situation now exists where inventory is harder to come by, has to be bought in bulk and transported longer distances; plus, inventory costs are now double what they were when he and Diane got into the business six years ago.
Krug doesn't expect to lay off any workers. He lost a few by attrition at the Westside store over the summer, and he plans to expand the hours at Mission Trace, he said.
Westside Pioneer article