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Englewood’s Whole Foods Is Closed. The Jewel-Mariano’s Merger Could Slow Plans For Replacing It, Experts Say

As developers, city leaders and Whole Foods officials decide what's next for the shuttered store, some experts think the Albertsons-Kroger merger could complicate efforts to bring a new grocer there.

The Whole Foods Market in Englewood on Sept. 27, 2022.
Colin Boyle/Block Club Chicago
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ENGLEWOOD — Whole Foods Market cleared its shelves in Englewood last week, leaving a grocery hole in the neighborhood the company once promised to fill to great fanfare.

City officials have pledged to quickly find a replacement after the Jeff Bezos-owned company said it was done with Englewood. Some neighbors have said they want the new store to be an affordable supermarket like Walmart or Mariano’s. But experts say the process won’t be that simple.

Not many grocers can operate a 18,000-square-foot space meant to anchor the broader Englewood Square shopping district at 63rd and Halsted. Whole Foods’ contract means the company is still the tenant and its leaders can choose which grocer moves in, according to developers.

There are other grocery stores that serve Englewood now, too, like an Aldi and the community-led Go Green Fresh Market, both on 63rd Street.

Whole Foods’ closure in Englewood also comes as grocery giants Kroger and Albertsons could merge, the parent companies of Mariano’s and Jewel-Osco.

Credit: Atavia Reed/Block Club Chicago
The sun sets over Englewood’s Whole Foods Market as it closes permanently on Sunday. Neighbors shopped for final goods during a weekend sale.

The nearly $25 billion deal could force the companies to offload numerous stores, radically changing supply and demand for grocers throughout the country, city planning and economic experts said. That could mean operators may hesitate to commit to a big store like the former Whole Foods until the merger is settled, experts say.

There is no timeline for when city leaders will announce a replacement for Whole Foods. Previous estimates on a decision have come and gone.

Englewood leaders have been hard at work surveying residents and getting them involved in public discussions on the issue. It’s a complicated balance, but experts said neighbors have power to pressure Mayor Lori Lightfoot and other elected officials to make sure what locals want from their grocery store is the most important factor.

“If the new store doesn’t meet the community’s demands, the community can decide that they’re not going to shop there,” said Stacy Sutton, an associate professor at the University of Illinois Chicago. “It shouldn’t be a developer’s decision and it surely shouldn’t be Whole Foods’. People don’t realize the power you have as a resident, assuming your alderperson is standing with you.” 

Officials with Whole Foods and Lightfoot’s office did not respond to questions about the future of the store.

Credit: Atavia Reed/Block Club Chicago
A Whole Foods Market employee tapes the only sign announcing the store’s closure to the door.

‘The Store Was Missing Things’

Whole Foods swept into the brand-new space at 832 W. 63rd St. in 2016 as the brainchild of former Mayor Rahm Emanuel.

At the time, shoppers, retailers and elected officials were thrilled the high-end store was committed to opening in a lower-income community, providing affordable options and partnering with local makers to put their products on the shelves.

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When the doors closed Sunday, locals had long derided the store for being too expensive. Groceries at the Englewood market were cheaper when the store opened in 2016, but even then some neighbors said the prices were still too steep. Months of inflation also have driven up the cost of groceries, affecting neighbors across the city

“Whole Foods going there in the first place was the wrong decision,” Sutton said. “It didn’t seem to align with what consumers could afford. Residents want a good supermarket that meets their potential price point. It’s about price and quality. Quality items at a good price.”

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Credit: Colin Boyle/Block Club Chicago
Groceries for sale at Go Green Fresh Market, 1207 W. 63rd St., in Englewood on Feb. 10, 2022.

Whole Foods is an expensive market no matter where you live, said said Winifred Curran, a professor of geography and sustainable urban development at DePaul University. In Englewood, where the median household income between 2016 and 2020 was about $22,000, the market’s prices were particularly high, Curran said.

“I think it wasn’t the best marriage in the first place to take an expensive store and put it into a neighborhood that has been underserved in every way historically,” Curran said. “It’s not illogical for people to feel like Whole Foods is a place that they’re not welcome or wouldn’t be able to afford given how expensive the store is and the reputation of the people who shop there.”

Another problem was the store’s grocery selection, said Brianna Hobbs, the health and wellness program coordinator nonprofit Teamwork Englewood. The organization surveyed 300 neighbors for their thoughts on what went wrong with Whole Foods and what neighbors want next, Hobbs said.

While neighbors might have been able to grab a few items from Whole Foods, they couldn’t shop at the market for all their needs, Hobbs said. 

“A lot of people said they were going outside of Englewood to do their shopping because they didn’t recognize a lot of the products they’re used to seeing in grocery stores,” Hobbs said. “The store was missing things like seasoning brands, oils and rice that residents know.” 

The market also didn’t offer some of the less-healthy options neighbors like to indulge in, Hobbs said. Those also are the kinds of foods neighbors historically have relied on because of the lack of fresh meat, produce and dairy.

Credit: Colin Boyle/Block Club Chicago
Customers shop at Go Green Community Fresh Market on its grand opening in Englewood on March 8, 2022.

The change to healthier, gourmet products might have been too swift for a community that is gradually embracing different views on nutrition, Hobbs said. 

“Whole Foods is based on being organic,” Hobbs said. “In a community like Englewood, we’re trying to incorporate that healthy eating and lifestyle change, but that’s a very slow process. Whole Foods was a big push, and we’re not quite ready for that yet. You have to slowly make those types of lifestyle changes, and I think that was the biggest disconnect there.” 

Economic studies have shown when a new grocery store enters into a relatively low-income area, “there isn’t a jump in the consumption of fruits and vegetables,” said Marcus Casey, director of undergraduate studies at the University of Illinois Chicago. Instead, neighbors switch over to buying goods at a market they’d normally get at a convenience store, like snacks, Casey said. 

The next grocer should offer fresh vegetables and meats, but it also needs to have convenience store-type goods neighbors are accustomed to as they shift their diets, Casey said.

Credit: Colin Boyle/Block Club Chicago
A Jewel-Osco on the Near West Side on Oct. 19, 2022.

‘The Wait-And-See Game’

As the store wound down its final weeks, Leon Walker, managing partner of DL3 Realty, said developers had “three good options” to replace the market and would have something to report “in the next 30 days or so.” That was in September.

DL3 developed Englewood Square and is the landlord of the Whole Foods building.

Ryan Green, DL3’s chief investment officer, said in late October the announcement of the new grocery would happen in the “next couple of weeks.”

A representative with DL3 Realty told Block Club that company officials were “not in a position to provide any further updates or comments at this time.”

Without many answers, neighbors and community officials held a town hall in October to hear updates from the development team and demand the next grocer provide affordable, healthy options while remaining accountable to the community. 

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Whole Foods is “leading the discussion” with potential grocers because they are a “tenant with the state” for the next eight to nine years, which allows the company final say in which company subleases the space, developers said at that meeting.  

Neighbors called on city officials to draft a contract with the next grocer requiring them to stay in the neighborhood. The city since has inked a similar deal with Yellow Banana, a Black-owned company that will lease and rehabilitate six Save A Lot stores across the city. 

The city gave the company $13.5 million in tax-increment financing, but all six stores must remain open for “no less than 10 years,” Tim Jeffries, deputy planning and development commissioner, told the Sun-Times.

“If a single store closes or is sold during that time, then the developer must return all previously dispersed funds to the city for all six stores,” Jeffries said.

Neighbors could draft a similar community benefits agreement that pressures the developer and city to meet some of their requests, Sutton said. 

Credit: Colin Boyle/Block Club Chicago
Longtime shopper Patrick Smith shops at the Jewel-Osco in the Near West Side on Oct. 19, 2022.

As talks continue about the store, Kroger is trying to complete its acquisition of Albertsons for $24.6 billion by 2024, according to a news release

If approved, the deal would combine two of the largest grocery chains in the nation, involving more than 5,000 stores, 710,000 workers and more than $200 billion in sales, according to CNN.

Although it has not yet been determined how the merger might affect local stores, Kroger and Albertsons would have to sell hundreds of locations nationwide in areas where there is too much overlap, according to The Seattle Times.

That could impact what happens next with Englewood’s Whole Foods, said Mike Mallon, a senior vice president at Draper and Kramer with more than 30 years in the grocery business.

Corporate and independent grocers are playing a “wait-and-see game” before they commit to other opportunities in the marketplace, Mallon said. 

Mallon offered this as an example: If you learn the computer you want might be on sale in the future, why buy it now when you can could get it for cheaper next year?

“Anytime grocers are involved in a potential merger acquisition, a number of people on the sidelines, including other independent grocers, are watching in anticipation of what’s going to happen,” Mallon said. “The merger might potentially create opportunities for them in any of those stores that are going to be divested. That’s what’s happening right now in the marketplace.”

Credit: Colin Boyle/Block Club Chicago
Aisles at the Jewel-Osco in the Near West Side on Oct. 19, 2022.

The threat of a merger might stop any operator from committing to a lease at a big-box store like Englewood’s Whole Foods, said Casey of UIC.

“Grocery stores like to enter places where they expect to have sufficiently high demand and relatively low loss rate associated with the community,” Casey said. “Anytime you see a merger between any major chain, you might lose some stores as a consequence. A big part of a merger is often cutting costs and closing stores that aren’t sufficiently profitable.” 

What officials at Whole Foods might be doing now is finding a suitable, long-term grocer that “won’t call it quits early on and leave the market eating those costs,” Casey said. 

“Somebody might be interested in that space, but among the people who are potentially interested, who’s going to come in and be a stable, long-term tenant able to satisfy the contract?” Casey said. “They want to make sure they can satisfy those costs, so they have to be careful about who they put in there. Otherwise, if someone ends up subletting and closing up quickly, it’s back in their hands.” 

The fate of grocery might be unpredictable, but neighbors and their local alderpeople have the power to help determine what happens next in Englewood, Curran said.

Credit: Colin Boyle/Block Club Chicago
Ida Brantley poses for a photo while shopping at the Jewel-Osco in the Near West Side on Oct. 19, 2022.

Ald. Raymond Lopez (15th) announced a City Council resolution this summer demanding a hearing to “examine the failure of the city of Chicago food access policies to meet the needs of underserved residents.”  Forty alderpeople signed the resolution as of October, Lopez said. 

Community organizations like Teamwork Englewood are out daily in the neighborhood advocating for change, and the Englewood 5 has held town hall meetings with developers, neighbors and experts to lead discussions.

The closed Whole Foods and the potential merger is a cue for the city and the nation to rethink food accessibility, especially in disinvested lower-income communities, Curran said. 

If the merger does occur, maybe city leaders will finally have a new motive to reshape its historical model and invest in local stores with affordable options, Curran said. 

“I think the merger is a bad idea, but I think there is a city interest in making sure that there is affordable food available throughout the city,” Curran said. “We’re not talking about luxury items, we’re talking about the bare necessities. We have to see that infrastructure be maintained across the city. Going to the supermarket should not be a luxury. Everyone has to do it.” 

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