CHICAGO, Aug. 7 (Our Illinois Times) — Seven Save A Lot grocery stores on Chicago’s South and West sides closed July 25, ending a three-year effort backed by millions of dollars in public and private financing and renewing questions about whether subsidies can make grocery stores viable in underserved neighborhoods.
The stores were operated by Yellow Banana under a retail-partner arrangement with Save A Lot. Save A Lot spokesperson Sarah Griffin said the company ended the arrangement after the stores faced financial problems. She said SNAP/EBT transactions at the locations fell 26% from the previous year.
The closures affect workers, customers and communities that relied on the stores for groceries. Chicago officials are now looking for another operator while considering alternatives such as public markets and farmers markets.
What closed?
The seven locations were:
- 832 W. 63rd St.
- 7904 S. Halsted Ave.
- 10700 S. Halsted St.
- 7240 S. Stony Island Ave.
- 2858 E. 83rd St.
- 420 S. Pulaski Road
- 4439 W. 63rd St.
The stores served parts of South Shore, West Lawn, Englewood, West Garfield Park, West Pullman, Auburn Gresham and South Chicago, according to descriptions of the affected locations.
The stores had opened or operated after renovations supported by a financing package estimated at about $26 million. That package included $13.5 million in Chicago financing, along with federal funding, loans and private investment. Public descriptions differ on whether the city financing covered six or seven locations, and the precise terms of the financing were not available in the records provided for this report.
The city’s investment was intended to improve grocery access in areas often described as food deserts — neighborhoods where residents have limited access to stores selling a broad range of fresh and affordable food.
Why did the stores close?
Save A Lot cited financial challenges and the decline in SNAP/EBT transactions. SNAP is the federal Supplemental Nutrition Assistance Program, while EBT is the electronic payment system used to access benefits.
Griffin said the stores had experienced a 26% decline in SNAP/EBT tender types compared with the prior year. Save A Lot did not provide audited financial information or a detailed breakdown of the stores’ costs and sales in the information available for this report.
The decline in benefit transactions is the company’s explanation for a major part of the stores’ financial pressure. The available information does not independently establish how much of the decline was caused by changes in federal benefits, local competition, prices, labor costs, customer traffic or other factors.
The closures have also raised a larger business question: Can government support overcome the normal costs and risks of operating a grocery store?
Rob Karr, president and CEO of the Illinois Retail Merchants Association, argued that subsidies do not resolve issues such as permitting, taxes and labor costs. He said government-backed grocery stores fail to account for marketplace conditions. That is his assessment, not an independent finding about the Chicago stores’ financial performance.
Was this a government-run grocery chain?
Not in the usual sense. The stores carried the Save A Lot brand and were operated by Yellow Banana, a private company. Chicago provided financial support but did not operate the stores as a city department.
That distinction matters because the debate now includes several different ideas: public financing for private operators, city-owned grocery stores, public markets and assistance intended to attract private grocers. Each model carries different responsibilities for staffing, purchasing, pricing, maintenance and losses.
The closure does not by itself show that every public grocery model will fail. It does show that public money did not prevent this private operating arrangement from ending after the stores encountered financial challenges.
What happens next?
Mayor Brandon Johnson said Chicago wants grocery service to continue at the affected sites. He said the city’s investment was intended to ensure that the buildings were ready to receive grocery stores, and that officials were considering a public market, a farmers market or another entrepreneurial approach.
Some redevelopment agreements reportedly require the sites to reopen as grocery stores within a year. Other descriptions refer to a 10-year operating commitment and requirements that grocery stores remain at tax-increment-financing-supported locations through 2035. The exact obligations vary in the available accounts, and the governing agreements were not provided for review.
No replacement operator has been identified in the information available. Until the city chooses a new operator or another model, residents will have to adjust their shopping routines, while former employees face uncertainty about whether jobs will return at the same locations.
The next phase will test whether Chicago can preserve grocery access without repeating the financial problems that led Save A Lot to end its arrangement with Yellow Banana. It will also determine how much additional public support, if any, taxpayers may be asked to provide.
