The closure of seven low-cost grocery stores over the weekend on the South and West sides of Chicago can be attributed in substantial part to a combination of risky decision-making and bad luck.
Mostly, though, the demise of the seven Save A Lot stores operated by an Ohio-based company called Yellow Banana is terrible news for parts of the city where getting through each day is a challenge for many residents.
Most of the stores in South Shore, West Lawn, Englewood, West Garfield Park, West Pullman, Auburn Gresham and South Chicago opened just within the past two years with a combined $26 million financing package that included a $13.5 million city grant and additional federal funding, loans and private investment. The stores carried the Save A Lot name, but they rose and fell on the financial strength of Yellow Banana, which appeared to be something of a one-man show.
That one man, CEO Joseph Canfield, died suddenly of a stroke at age 54 in April. There was no successor for him; leaderless, the stores closed three months later. Canfield’s passing was the bad-luck part.
But Yellow Banana clearly was on shaky ground virtually throughout its time in Chicago. Even before November 2022 when the City Council approved the $13.5 tax increment financing to support six of the stores, Canfield had been sued by his stepsiblings who accused him of stealing coins from his late stepfather’s estate and using more than $238,000 in proceeds from their sale to finance his part of the Save A Lot investment.
When the city bet big on Canfield and Yellow Banana to alleviate so-called food deserts on the South and West sides, the risk they were taking on was significant. Soon thereafter, Yellow Banana was the subject of numerous lawsuits and claims from vendors who’d complained they hadn’t been paid and took considerably longer to open some of the stores than what was mandated in the agreements with the city, according to Chicago Sun-Times reporting
Many on the right are saying, with some justification, that the souring of this taxpayer investment was predictable and that retail in these parts of Chicago is such a tough business that city government shouldn’t get involved. Certainly, city-owned grocery stores — something Mayor Brandon Johnson proposed three years ago but since have gone nowhere amid the city’s financial woes — are not the answer, as we’ve said before. A one-time subsidy pales next to a commitment to operate what likely would be a money-losing enterprise for an open-ended period of time.
But that’s not to say that decent grocery options shouldn’t be available in every neighborhood. They should, and their absence in our view is a matter for public concern.
In Englewood, a particularly star-crossed neighborhood when it comes to grocers, the closure of the Save A Lot leaves just one option, an Aldi. Whole Foods opened a city-subsidized Englewood store to national fanfare in 2016, but it closed just six years later. The Save A Lot then occupied the same space, which had been upgraded for Whole Foods with the help of $10.6 million in tax increment financing from the city and wasn’t included in the TIF deal Yellow Banana later obtained for its six other Save A Lot stores in Chicago.
In other words, the city’s TIF investment for these seven stores was more like $23 million rather than $13 million. That’s a lot of money for what are now seven empty buildings.
That said, it should be a high priority to find new grocers for as many of these seven spaces as possible. The city’s investment has upgraded these buildings considerably, and if operators can be found to replace Yellow Banana in much the same way it followed Whole Foods, the taxpayer outlays won’t have been in vain. The use of tax incentives to attract grocers in food deserts is justified. We will not be among those criticizing past mayoral administrations for making the effort.
Would Albertsons, the owner of Jewel-Osco, be open to discussions on some of these locations? A large-scale Jewel-Osco was brought to a neglected part of Woodlawn on the South Side in 2019, thanks in part to $11.5 million in federal tax credits. We’re not privy to the store’s current financials, but to all outward appearances it’s going strong. The University of Chicago acquired the property more than six years ago.
How about Aldi?
We’d love to see the city’s business community get involved and help recruit new operators in at least some of these shuttered Save A Lot stores. To the extent the city can help by streamlining permitting and approvals, it should do so.
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But taxpayers have done their part to help alleviate the food deserts on the South and West sides. Time for others to step up.
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