Why have standard stores abandoned communities that EATS Groceries plans to enter?

SUPERMARKET FACTS:

Definitions:

• Supermarket–16,000-60,000 items (Jewel, Mariano’s etc)
• Specialty Store–2,000-3,000 items (Aldi, Sav-a-Lot, Trader Joe’s)
• Convenience Store– fewer items, higher prices, varied quality
• The AVERAGE SUPERMARKET NET PROFIT is NOW 1.1%. DOWN FROM 1.5%* since online ordering has grown by 20% per year.
• Supermarket average shrinkage (loss from employee, customer and vendor theft) is 1.4%*
• EMPLOYEES are responsible for 55% of all Retail theft, *

*Source: Food Marketing Institute, www.fmi.org

• The net profit plus the shrinkage allowance is 1%+1.4= 2.5%.
• When shrinkage exceeds 2.5%, the store has no zero profit. Stores leave and don’t return without profit.
• The impoverished community “shrinkage” is between 3-7% depending on the level and cost of security systems.
• Extra Security adds 2%-4% to shrinkage avoidance cost.
• LINK use disallows the high-profit potential from sales of “ready-to-eat”
• Impoverished communities can have 70% LINK use.

Chicago provided $10.5 million dollars each for the 1/3^rd size Whole Foods in Englewood, Mariano’s in Bronzeville and Cal’s proposed market in South Shore. **

**Source: Chicago Tribune www.chicagotribune.com

The incentive can only cover losses for about two years before the stores are operating at a loss. These stores will ether leave or will request an additional taxpayer “incentive” to stay.

 Exceptions:

• Mariano’s was rescued from losses with the buy-out from Kroger in Bronzeville a few blocks from the Jewel store. It was not a “food desert” and reduced the Jewel revenue and profitability. Mariano’s received the “incentive” of taxpayer millions but was merely anticipating the South Loop gentrification growth along the Lakefront.
• Pete’s Market on Madison and Western is anticipates the benefits from the West Loop development and the N Western Ave expansion heading South.

Both of these stores anticipate profit from eventual gentrification over the next two years.

Understanding facts will help explain why EATS innovation is needed, necessary and is sustainable.

Thom Alcazar MBA, Founder

talcazar@eatsgroceries.com

www.EatsGroceries.com