Small independent grocers carve niche as industry consolidates

2013-11-09T23:45:00Z 2014-01-22T12:31:08Z Small independent grocers carve niche as industry consolidatesJoseph S. Pete joseph.pete@nwi.com, (219) 933-3316 nwitimes.com
November 09, 2013 11:45 pm  • 

Highland Fresh Produce tried to make a go of it in a strip mall off a busy street selling a variety of healthy fare, including acorn squash, aloe leaves and papaya.

But the small neighborhood grocer on 45th Street just shut its doors last week, less than a year after it first opened. A surge of shoppers rushed in during the final days to take advantage of the 30 percent off liquidation sale. A few folks lamented the loss on the business's Facebook page.

The last few years have been rough for small independent grocery stores in the Calumet Region. Highland's South Side Bantam had long been "Where the Beef Is," but closed down after 60 years of pasting hand-painted signs in the storefront windows of a squat brick building on Kennedy Avenue. The corner store, which was known for its old-fashioned meat counter and Lenten fish fries, had previously survived a ravaging fire, the great blizzard of 1967 and an influx of supermarkets with wider selections, lower prices and bigger parking lots.

In the past few years, Taste of Poland in Dyer, A & E Gluten-Free Market in Crown Point, Komo's Food and Catering in Lansing and Highland Orient Food Mart also all have gone the way of getting meat from the butcher, bread from the baker and milk delivered to the doorstep. Some had come and gone like cart-pushing customers and cashiers passing in the night, but others had been around for decades.

Even longtime Chicago area grocery giant Dominick's, which had locations in Frankfort and other south suburbs, is vanishing from the landscape after more than 90 years.

Last year, the local chains WiseWay and PayLow were bought out by Strack & Van Til, the last remaining large regional grocery chain that is headquartered in Northwest Indiana. Their old stores are now being rebranded as Ultra Food or Strack & Van Til  locations.

Strack & Van Til president Dave Wilkinson has said the sector has been becoming increasingly competitive in recent years, in part because so many different types of retailers are now selling groceries. Big box stores such as Meijer and Walmart compete with more conventional supermarkets. Non-traditional competitors such as Menard's also have gotten into the grocery game, and dollar stores and drug stores have bulked up their offerings.

Consolidation has been a major trend in the industry, as grocers have pursued greater efficiency and bigger economies of scale. Nationally, the top five food retailers in the United States accounted for about 27 percent of food sales in 1992, according to a research paper that University of Surrey retail marketing professor Steve Wood recently published.

That figure rose to 38 percent of overall sales in 2001, and hit 60 percent of sales in 2009.

"There has been an increasing squeeze on those smaller operators lacking scale-related efficiencies or those that do not occupy a differentiated niche in the market," Wood noted in the study.

Longtime independent stalwarts in Northwest Indiana and the south suburbs of Chicago have still persisted, including De Rosa Imports in Griffith and Fresh County Market in Gary and East Chicago. New ventures have launched, such as Miller Beach Market Place in Gary and Produce Depot in St. John and Dyer.

Locally owned stores say they compete by carving out niches, knowing their customers and catering to their needs.

DeRosa Imports was founded 95 years ago in East Chicago by Italian immigrants who heralded from a long line of merchants of olive oil, wine and coffee. The store has been at its current location on Broad Street in Griffith for 20 years, and now offers a variety of ethnic food, including imports from Serbia, Hungary and Bulgaria.

"We carry a lot of the products we can't get anywhere else," store manager Ioana Sas said. "We have Serbian newspapers you'd never find at Meijer. If we don't have it, we try to get it to please the customers."

The ethnic grocer mixes its own blend of Turkish coffee, makes cannoli and offers imported items other grocery stores do not.

"We know what our customers are looking for," she said. "We try to make the customers feel like they're back in Europe."

Mom-and-pop grocery stores may be rarer than they once were in an age where more shoppers gravitate either to bottom-shelf prices or premium wholesomeness, but they still have a large economic impact. In Indiana, independent grocers account for $5.6 billion in sales, more than 44,300 jobs and $1.2 billion in direct wages a year, according to the National Grocers Association, an advocacy group. Smaller grocery stores and chains account for slightly more than 1 percent of the state's economy.

In Northwest Indiana, independent grocers are responsible for $291 million in sales, 2,809 jobs and $90.54 million in wages a year, according to the National Grocers Association. If the ripple effect is factored in, non-chain groceries accounts for more than 4,200 jobs and $143 million in wages in Northwest Indiana.

Locally owned grocers also keep cropping up in the region.

Earlier this year, Carmella Saraceno, a sculptor who founded the Chicago-based fine art rigging and installation firm Methods & Materials, started up the Miller Beach Market Place a few blocks from Lake Michigan's southern shore in Gary. The neighborhood grocery offers a carefully curated selection that includes fresh organic produce from a nearby farm, gelato, and an entire aisle of gluten-free items. The shop has a Zumex juicer that makes pure orange juice free from additives or added sugar.

"The quality of the products is above and beyond," chef Christy Nystrom said. "The selection of food is unique."

Before the market opened, Miller Beach residents had to drive out of their enclave – often all the way to Portage – in order to stock up on groceries.

Nystrom said Miller Beach Market tries to fill vital needs in the community, such as by offering home delivery and babysitting on Friday nights. Elderly residents appreciate getting hefty bagfuls of groceries dropped off at their doorsteps, and the grocer will handle orders as small as a six pack of craft beer.

The store aims to be a community gathering place and is considering the possibility of hosting small concerts, yoga classes and other events.

"We don't just sell groceries," Nystrom said. "You'd be amazed at some of the stuff that goes on here."

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