Grocery Outlet to move into former Safeway site on Third Avenue

The empty Safeway supermarket on downtown Spokane’s west end will reopen this fall as a Grocery Outlet store.

Berkeley, Calif.-based Grocery Outlet Inc. is known for its deeply discounted food items and home merchandise. It has two other local stores, in Spokane Valley and North Spokane.

The new store, at 1617 W. Third Ave., is expected to open in October, said Jim Quigley, who handles commercial real estate for Kiemle & Hagood and who brokered the lease.

Safeway closed the 21,900-square foot location, at Third and Maple Street, in 2006. A year later, former Downtown Toyota general manager Dave Coombs bought the property for more than $2 million.

Coombs announced plans to convert the building, built in the 1950s, into a Lexus dealership but later halted the project when the economy plummeted.

Coombs remains the owner, with Grocery Outlet agreeing to a 10-year lease.

Marc Drasin, Grocery Outlet’s real estate vice president, said the location came from research and customer interest. “We received calls and emails from people asking us to put a store in that downtown area,” he said. Research confirmed the two Spokane stores were not drawing customers from near downtown or the West Plains, he said.

Both Spokane-area stores have total sales that are “above average,” he added.

“We like Spokane very much,” Drasin said.

Construction is starting this week. Drasin said Grocery Outlet will spend close to $2 million on improvements to the building.

Grocery Outlet operates about 150 stores across the West, mostly in California, Oregon and Washington. The company acquires overstock goods, closeout or outmoded packaging products, or unsold seasonal inventory.

“All of the items we buy come directly from the manufacturer, not from third parties,” Drasin said.