The closing of Kroger stores in Peoria happened just four months after Kroger launched its national Moonshot Initiative to end hunger in the communities it calls home. Their CEO said in a press release last September, “no family in a community we serve should ever go hungry, and no food in a store we operate should ever go to waste.” I want to understand the real reason Kroger is closing two stores that just happened to be located in areas that have the highest poverty and minority population in the City of Peoria. Closing them contradicts their mission and commitment to end hunger. Maybe if they’re no longer in the community they’re on point with their initiative.
I fully understand that grocery stores are in business to make money. From a business perspective, profit in a grocery store is based on volume. Stores have to sell a lot of groceries to stay in business. The profit margin in the grocery business is about 1%-3%. For example, if a grocery store does one million dollars in business a year they’re only making $12,500 -$30,000 in profit. That’s not a sustainable business model. But is the business model of the grocery store industry.
The Southside of Peoria (61605) has a population of roughly 16,500 and the East Bluffs population is about 17,000 according to the 2016 US Census survey. There is or was one major grocery store in each of these areas of town. North Peoria (61615) has a population of roughly 23,000, with five grocery stores within a five-mile radius of each other, Kroger, Schnucks, Walmart, Aldi, and Hy-Vee. A sixth store, Meijer’s grocery chain was looking into opening another big box superstore within a five-minute walk from Walmart and Aldi’s on Allen road. I would argue the population is large enough to support grocery stores in the 61605 and the 61603 community.
It’s very clear the face of grocery stores has changed in the last decade. Grocery stores have become meeting places. They offer café and coffee bars, places where you can eat dinner and enjoy a band while sipping on a glass wine. They have food samples and food demonstrations to lure you into tasting or buying something you wouldn’t normally eat. Grocery stores are places you can get haircuts and pedicures. Some have nutritionists on site to discuss diet plans before you shop. They have door greeters that are not dressed in police garb. Well, this is what happens at the grocery stores in the 61615 area of town.
We can speculate why Kroger decided to close these two stores-profit loss, crime, lack of economic development, and so on. Whatever the reason, it’s complex. Neighborhoods should not be the blame for the stores decision to close, if they are, the root issues of the problem are being neglected. These issues go far beyond having access to fresh fruit and vegetables. I question if Kroger and other grocery stores doing business in low-income areas are willing to change their business plan to meet the demographic and cultural needs of the people in the community. Doing so will offer a more sustainable business model.