Editorial: Should The City Of Chicago Run Its Own Grocery Store?

In the same week that Mayor Brandon Johnson announced the city of Chicago faces a $538 million budget gap over the next three years and that he doesn’t plan to increase property taxes to close it, the new administration floated the idea of a city-owned grocery store in neighborhoods that lack access to fresh foods.

The plan, popular among progressives, assumes that the city can succeed where private sector specialist retailers have set up shop and failed. The rhetoric in the announcement goes further than that: It implies that grocery chains are run by those who don’t want to succeed in the neighborhoods that need them the most. This is nonsense.

Still, Exhibit A in this theory is the Whole Foods store in Englewood, which closed its doors in November.

The store opened in 2016 to much media fanfare and a “bread-breaking ceremony” in the parking lot attended by then-Mayor Rahm Emanuel, store officials and community members. It came with a stated determination to feature such yummy local products as Jimmy’s Vegan Cookies and Justice of the Pies and a roughly $11 million tax increment financing subsidy from the city that was used to prepare the Englewood Square site before it was sold to a private developer.

Emanuel was so proud of the store, and the deal he had brokered, that he brought London’s mayor, Sadiq Khan, who called it a win-win and something for London to copy. The Whole Foods store was an anchor for Englewood Square at 63rd and Halsted streets: Other tenants hoping to swim in its wake were Nail Works, Chipotle and Starbucks. With roughly 100 employees at its Englewood store, Whole Foods said about 35 lived in Englewood. There was even an employee hired to do community outreach and an in-store meeting room for community groups to use.

By 2022, it was all a bust.

Whole Foods said very little as to why, trying to duck the public relations hit, but grocery trade publications analyzing the debacle homed in on the store’s relatively small size — it was some 18,000 square feet, whereas many Whole Foods stores are about 50,000 square feet or more — and the perception of local residents that it was too small to do a full shop, as well as being expensive and not truly from the community. In actuality, the Tribune reported that Whole Foods had reduced its prices on milk, bread, eggs and some produce and sold them at far lower prices than elsewhere in the city. It wasn’t enough.

What the city should have learned from that disaster was that traditional businesses are in danger of being taken over. In the case of Whole Foods, that took the form of Amazon in 2017. And when the new owners come in, they don’t look at what money has been given to fund the startup costs because those costs already are sunk, nor do they usually care about the ethical habits of the previous management. They are only about the ongoing profitability of the store. Or the lack thereof.

Had Whole Foods been making money, it would have remained. But that was not the case. Amazon was smart enough to try to mask the closure by also nixing a Lincoln Park Whole Foods at DePaul University that was being used only for pandemic-era delivery, but the bottom line was the bottom line.

That wasn’t the end of the Englewood grocery debacle. Up next in that fraught space came Yellow Banana, a Black-owned company with a supermarket chain named Save-A-Lot. They were not much interested in the niceties from 2016, and, as a result, they were not exactly welcomed to Englewood with open arms, with residents reportedly concerned about quality and freshness.

Whole Foods, some said, was too upscale. Save-A-Lot, some said, was too downscale. And not enough people said that if you want a grocery store in your neighborhood, you have to support it with your business.

Aldi appears to be the only one to have found the right niche, but that store with some branches in less affluent neighborhoods might now find itself competing with the city itself.

We have no problem with the city exploring a foray into the grocery business, but we’re skeptical that government can operate a store more efficiently than the smart, specialist minds at Aldi and other supermarket companies. A city-owned store would struggle with economies of scale, be open to the charge of unfair competition and face a mountain of politicized debate over how much it should be charging.

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Would such a store sell food at less than the market price, potentially putting private stores out of business? Would it sell only expensive organic produce for health reasons? What about liability?

Would it have own-label products featuring the city’s flag? How much would it pay its employees? Would it offer a city pension? Could it compete with the relatively high hourly wages at stores such as Costco? How much would it cost to operate, and would it be expected to pay its way?

And, to bring up a point few in the current administration want to talk about, would it suffer the same theft problem that contributed to Whole Foods’ exit? Would the police respond differently if it were a city-owned store? How would that go down with other Englewood small business owners with less clout?

We’d rather see the city learn from the Whole Foods mess by thinking about ongoing subsidies for grocery stores rather than just help with site preparation and capital expenditure (venture capitalists look mostly at running costs). We’d like to see expansions of the city’s farmers markets, such as the hugely successful weekly market in Logan Square, and we’d like to see the city trim the necessary regulations. In sum, the Johnson administration’s exploration should focus on new partnerships with people who know what they are doing and do it well.

We surely believe that all Chicagoans should have access to fresh food. But we don’t think City Hall should be behind the deli counter.

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Submit a letter, of no more than 400 words, to the editor here or email letters@chicagotribune.com.

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