CHICAGO — Two years after publishing its initial Urban Grocery Study, Mid-America Real Estate Corp.'s Urban Team has accumulated comprehensive and comparative data rendering new statistical findings and trends that may prove invaluable to grocers and other retailers planning to penetrate the urban Chicago marketplace. That data was made public Thursday, the company announced.
One such statistic maintains that while the number of grocery stores in Chicago and the adjacent suburbs increased by 8.8% over the two-year period, it was largely due to growth among the discount and “gourmet” categories, with a notable pull-back from full-service grocers. Also, the traditionally underserved “food deserts” of the city have experienced growth in grocery penetration by 11%, although such areas still are heavily underserved.
Pharmacy operators offering fresh food were not included in the report. Walgreens opened 10 "food desert oasis" locations in Chicago in 2010.
“Grocery is the backbone of retail across the country, but particularly relevant in urban Chicago where there are several well-documented underserved areas,” stated Mid-America SVP Dan Tausk in a press release. “Grocery drives other development, brings other ‘daily needs’ to a shopping center and defines trading patterns, so we felt it important to get a closer look at the supply and demand characteristics in each of the eight submarkets we identified," he said. "Now, having a two-year window of activity as a basis to study, we can draw some conclusions.”
Tausk reported that the data, which includes everything from store size to category to operator type, substantiates some correlations that already are known by industry professionals. However, there also were many new findings:
According to the report, Walmart has entered the 2011 study with seven stores, three 30,000- to 40,000-sq.-ft. “Market” stores and four 10,000- to 15,000-sq.-ft. “Express” stores. Walmart was included in this study because both its Market and Express concepts operate primarily as grocery stores with definable square footages in contrast to urban Targets, Super Targets or Walmart Supercenters.
Walgreens, however, was not mentioned in the report. Walgreens in July announced a commitment to convert or open at least 1,000 food oasis stores nationwide over the next five years. “With more than 45% of our stores located in areas that don’t have access to fresh food, Walgreens is uniquely positioned to bring more food options to Americans and also provide needed pharmacy, health and wellness services directly in those communities,” stated Walgreens president and CEO Greg Wasson at the time of the announcement.
Also in the report, Aldi, the German discount grocer, has been highly active since the 2009 study, opening six stores throughout the city while proposing three more for 2011. Roundy’s, the Milwaukee-based grocer, successfully unveiled its upscale grocery concept, “Mariano’s,” in Arlington Heights, Ill. Three-of-the-5 proposed locations in 2009 have been abandoned; however, Roundy’s has selected five more locations, bringing its total to seven proposed locations in the 2011 study.
Save-A-Lot has expanded in the past 24 months, proposing five stores for 2011, four of which are to be located in the south/southwest area of the city, with the remaining location slated for the south/southeast area of the city, clearly focusing expansion efforts squarely in Chicago’s food deserts. Jewel, a Supervalu banner, has been stagnant since the 2009 study, focusing on remodels. Its lone activity — closing its concept store, Urban Fresh, in West Lincoln Park. Dominick’s, a Safeway banner, stayed relatively stagnant, re-opening one store in West Rogers Park and closing one store in Lakeview due to a fire, with no immediate plan to rebuild it.
To download the grocery study and charts, click here.