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Supermarket space declines in Chicago


Grocery is one of the fastest-growing segments of retail — just not in Chicago.

Over the past two years, 25 supermarket shut their doors in Chicagoland. Sixteen new ones opened, but they were smaller than the ones that closed, making for what Mid-America Real Estate calls an “alarming” loss of 544,512 sq. ft. of inventory.

“The combination of nearly a million square feet of Dominick’s space being absorbed by the market leaders… with short-term bankruptcies and the ever present threat of Amazon’s launch into grocery has created a stall and step backwards in urban Chicago,” says Dan Tausk, a Mid-America principal and director of its urban tenant brokerage who co-authored a study on the Chicago supermarket scene with Dan Maentz.

Hardest hit have been South Chicago and the near west suburbs. The south and southwest sections of the city suffered a net loss of four grocery stores totaling 153,000 sq. ft. Total square footage declined by 262,000 in the western ‘burbs, which lost two small-format Meijer’s stores and a large Ultra Foods.

Key factors at play in The Second City, according to the Mid-America report:

• Aldi’s store total declined to 49 with the closing of three stores, and the German-based chain canceled plans to build a new location. Jewel-Osco now leads the market with 51 stores.

• The two Meijer’s along with two Express and two Neighborhood Markets closed by Walmart in a nationwide shutdown accounted for a combined loss of about 240,000 in grocery square footage.

• Smaller-format grocers: Target added four 20,000-sq.-ft. to 30,000-sq.-ft. stores between 2015 and 2017. Fresh Thyme Farmer’s Market’s first two Chicago locations were both under 30,000 sq. ft. And food co-ops Chicago Market and The Dill Pickle exist in the 10,000-sq.-ft. to 13,000-sq.-ft. range.

Mid-America’s study encompassed 3.2 million Chicago residents in Chicago and the surrounding suburbs. Grocery stores under consideration had to exceed 10,000 sq. ft. in size.

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