Chicago Owned Grocery Store Would Be Subsidizing Dysfunction

April 23, 2024

The cost of a Chicago-owned grocery store will be borne by taxpayers

There have been many astoundingly dumb ideas to have come out of the Brandon Johnson administration, but possibly the dopiest proposal yet is the possibility of Chicago operating a city owned grocery store.

In late 2022, Walmart CEO Doug McMillon warned if law enforcement officers, not just in Chicago but elsewhere, didn't work to prosecute shoplifting, including organized theft rings, then “prices will be higher, and/or stores will close.” 

McMillon stood by his words on shuttering stores, in Chicago for certain, when in April of 2023, less than a week after Johnson's runoff victory over Paul Vallas, Walmart announced it was closing four of its eight Chicago stores.

In a statement explaining the decision, Walmart said:

“The simplest explanation is that collectively our Chicago stores have not been profitable since we opened the first one nearly 17 years ago. These stores lose tens of millions of dollars a year, and their annual losses nearly doubled in just the last five years.”

That five-year period to which Walmart referred covered the 2020 riots and looting that occurred after the death of George Floyd in Minneapolis.

Over the last few years, both Aldi and Sav A Lot have closed stores on the South and West Sides.

Last September, Johnson announced that his administration, in partnership with the progressive Economic Security Project, was exploring the possibility of a municipally owned grocery store. Presumably more would follow, all in the name of fighting “food deserts,” which are areas that have limited access to affordable food stores or are bereft of markets.

For an extended period of time after Johnson laid out his plan, little appeared in the media about to what we refer as “Brandon Mart” stores. The absence of news coverage on Johnson’s publicly owned food markets led many to assume City Hall somehow found some wisdom and tabled the idea. After all, large retail chains — and in the case of Walmart, very large — have tried to earn a profit in Chicago and failed.

To our misfortune, last week in a Crain's Chicago Business op-ed, Ameya Pawar, the left-wing, former 47th Ward alderman who is now a senior advisor for the Economic Security Project, laid out his case for what he believes is the cure for food deserts — publicly owned grocery stores. “A public grocery store might sound like a utopian idea,” he notes in that article, “but it has recently proven successful in other parts of the country, primarily in conservative rural communities.”

Translation: What Pawar calls “public option” groceries has never been attempted in a big city. Regarding those stores in “conservative rural communities,” The Wall Street Journal investigated a publicly owned grocer in Erie, Kansas, which lost money in every month except one in 2022.

Pawar, in defending publicly owned groceries, offers that Chicago owns and runs Midway and O’Hare airports. But thankfully, the airlines are not operated by the city.

One word missing in Pawar's Crain's op-ed is “crime.” Shoplifting, or its more sanitized term, shrinkage, are not mentioned either.

The retail culture is remarkably different from the culture of an office environment, whether it is a private or public sector one. Unlike deskwork, nearly every task at a retail store must be completed, if not immediately, by the end of each workday. Sure, there are forecasts and revenue reports that need to be completed, which can be written over several days. However, one or two people per store perform that type of work. Everyone else, including the stockers in the back, are in the trenches.

The grocery business operates under notoriously thin profit margins, and grocers must be responsive to changes in customer demands to survive. Operating on tight budgets, as well as quickness and nimbleness regarding answering peoples' needs, are not responsibilities governments perform well. And Chicago is particularly inept among governmental bodies.

Smart grocery managers know what to order and when to order it. And do not forget, the grocery business is a “now” endeavor. Perishable products, such as meat and ice cream, of course, must not only be unloaded from delivery trucks right away, but they must be refrigerated or stocked in freezers immediately.

Now, now, now! Does that sound like Chicago's city government?

Smart store managers also must order enough goods — but not too many. Dairy products are among those that have expiration dates. Fresh fruit and vegetables, unless pre-bagged, don't have expiration dates, but they're not needed. After all, who wants to buy brown bananas? Or tomatoes with brown spots? Can a Chicago-owned grocery store cope with such challenges?

If nothing else, City Hall in Chicago has an unseemly reputation for being driven by nepotism and political connections. Therefore, it's understandable that the politically blessed will not only get the best jobs at a BrandonMart, but also get an inside track to supply products to a Chicago-owned grocery store.

Older Chicagoans will remember Alderman Bill Henry scheming to have his Soul Cola named an official beverage of the Taste of Chicago. Henry, who was later indicted on unrelated corruption charges but died before his case went to trial, would have loved BrandonMarts.

A similar case involves another Chicago alderman, Ambrosio Medrano. Following his release from prison after being ensnared in the Operation Silver Shovel federal investigation, private citizen Medrano was convicted a second time for his role in a kickback scheme involving selling bandages to Cook County's John Stroger Hospital.

A better way to eliminate food deserts would be to admit where Chicago went wrong with groceries closing. Of course, that will lead to some uncomfortable conclusions for Chicago progressives, if an honest study is done.

Forget the study, here is the remedy: Arrest shoplifters — and aggressively prosecute them. Then invite big grocers back.

It is assumed that some funding for a Chicago-owned grocery store could come from Governor J.B. Pritzker's Illinois Grocery Initiative. BrandonMarts, financially speaking, may not end up as a Chicago-only problem.

Ironically, in addition to his role at the Economic Security Project, ex-Alderman Pawar is the CEO of OKAY Cannabis, which according to his LinkedIn page is a “multi-unit social equity cannabis dispensary operator.”

Nonetheless, if Pawar is truly concerned with food deserts, instead of plunging into the cannabis business, he would have opened a PawarMart supermarket instead. But that would mean putting his own money at risk, not taxpayer funds.

Shoplifting is not a problem at weed dispensaries. To enter one, a security guard checks your ID to ensure you are over 21. And all marijuana offerings, from basic weed to gummy cannabis, are locked up, either in jewelry store type display cases, or in the back of the shop. It looks like Pawar made a wise business decision.

A bad business decision is opening a Chicago-owned grocery store.

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