Bankruptcies don’t help. Even the big chains are closing stores.

The grocery store sector is never static. Some stores close, others open. But in Chicago, 25 stores closed over the past 24 months due to bankruptcies or operational reasons, and only 16 stores have opened, producing “an alarming loss” of 545,000 square feet of grocery store space.

This includes five independent grocery stores that closed, while only two new ones opened, bringing their total down to 43 stores. Their market share, based on square footage, declined to just 7%. This is “not a positive sign for improving the food deserts where these grocers penetrate more regularly,” according to Mid-America Real Estate’s biennial Urban Grocery Study.

And the average store size shrank, as the stores that were closed averaged 38,000 square feet, while the stores that opened or are planned average 25,000 square feet.

The study covers the period from September 2015 to August 1, 2017, in an urban area of 3.2 million residents with 262 operating or proposed grocery stores of more than 10,000 square feet in size.

In addition to the current difficulties, Amazon’s entry looms over the grocery market. Whole Foods, which is being acquired by Amazon, has 13 stores in the area, nine of them “in primarily higher income” locations. It has about 7% of the market on a square-footage basis. And the report finds that “consumers continue to anticipate the opening of Amazon Go stores or perhaps ‘combo’ sites of Amazon/Whole Foods part grocery-part fulfillment center.”

Regional grocery store chain Dominick’s has become a Safeway fatality. In 1998, the chain’s 116 stores were acquired by Safeway Inc. Critics say that Safeway cheapened the product offerings, including replacing Dominick’s private label brands with Safeway brands. And the store-closings started. At the end of 2013, with only 83 Dominick’s stores remaining, Safeway closed all of them. Two month later, as if by coincidence, Safeway was acquired in a leveraged buyout by private equity firm Cerberus.

Many of the Dominick’s stores remained “dark” for years. But over the two-year period of the report, nearly one million square feet of those locations were absorbed by major chain stores, which dampened the impact of the bankruptcies and store closings to create “a stall and step backwards in urban Chicago,” as the report put it…..MORE HERE