Capital City Grocery: Food Fight

November, 17, 2008 , by Aislinn

Nothing says we’re in for a hard winter like making a cold, rainy trip to the store and buying the last bag of flour from a nearly empty shelf, like I did this week. Luckily, the troubles at Capital City Grocery have little to do with the current US economy or the sporadic life cycle of downtown business. The store’s second round of ownership has developed into a paralyzing legal battle.

Conan McClain, developer of Seaboard Station, has been an investor since the store opened. According to Alex, a Capital City Grocery employee who asked not to be identified, McClain developed Seaboard with a grocery store in mind for that space. Of the store’s problems, Alex brushes aside fears about the store’s finances. “There’s plenty of money,” he says, “It’s just the Weems. It has been the Wild West, to say the least.”

The Weems family bought into the business in April 2007. The original store had fallen into debt, so Ed Weems, as director of Venture Management Inc., put together a new group of investors to join McClain, including the Weems family and Dr. Joe Gordon of the Oberlin Animal Hospital. They renovated the store, expanded the prepared foods section, and obtained a license to serve wine and beer. Customers relaxed on the front porch rockers and many of us were excited that the grocery had been saved.

But things started to go downhill as a result of the Weems’ management, Alex explained. “‘Personality conflicts with employees and vendors would be a mild way to put it.”

Ed Weems spent a lot of time on the floor of the store, hosting wine tastings and interacting with patrons. Alex says customers complained about his aggressive sales style, reporting that he’d help them find a product and then suggest that they put $50 more merchandise in their basket to help the store survive. The customer comment box frequently contained feedback like, “I’d come here more if the bald guy quit following me around while I shop.” “I’ve got a whole pile of those at home,” Alex chuckles.

Alex told me that eventually the Weems agreed to discontinue their involvement in customer service and the other front-end aspects of the business, and not to come into the store anymore. But when Ed Weems started to send in his son to check on things, McClain asked to disolve the partnership. Ed Weems refused. Alex describes a recent Saturday when Ed Weems visited the store and discovered the locks had been changed. He claimed ownership of the entire Seaboard development and threatened to bring in Raleigh police. He visited five other nearby Seaboard businesses and made the same announcement, but left without calling law enforcement.

The Weems still own 10% of the business. Legal proceedings have been underway for over four weeks to negotiate their departure, while the store’s shelves slowly empty of merchandise. Alex explains that if he maintains the store well, the Weems might take credit for the success and use it as leverage: The Weems are “fighting to catch a free ride, because they know it’s going to work eventually.” New investors are ready to get involved, but they don’t want to join until the Weems are gone.

Alex is confident that the store will eventually succeed, but doesn’t know enough details to predict when the legal battle will be resolved. “When you see the empty shelves, think about that.” Alex refers to the Weems situation. “That’s not what Capital City Grocery is about. We’re about being a locally owned, locally operated downtown grocery store.”

Starting a new business downtown is difficult enough without complications like this, so it’s a shame Capital City Grocery is going through a new round of crippling problems. I agree with Alex, however, that, considering Mordecai, Oakwood, Peace College and possible Seaboard apartments, the market exists, especially if the store resolves some of the identity issues brought up in response to the last NewRaleigh article about it. Let’s all cross our fingers and hope that soon they have everything we need and no more sad gaps on the shelves.

Politics , Other posts by Aislinn.