Meijer Inc. says it plans to build more supercenters in the Chicago area, despite increasing competition. The Grand Rapids-based retailer tells
Crain's it will build six to 10 new stores a year in the Midwest for the next several years.
There are no planned store openings in the Chicago area for 2008. But a spokeswoman says Meijer is "actively working" to acquire sites. She declines to be more specific about locations.
"The opportunity that we see there is hundreds of thousands of shoppers," she says. "We've only got 11 stores in a market that could handle a lot more."
Meijer recently eliminated about 500 managerial jobs in a move to streamline operations, but officials said the move wouldn't affect expansion plans.
Jewel Food Stores Inc. currently dominates the Chicago grocery market, while Whole Foods Market Inc., Wal-Mart Stores Inc., Roundy's Supermarkets Inc., Target Corp. and Albertson's are talking expansion or roll-outs of new concepts for their stores.
Meijer operates at least 179 retail and grocery supercenters in five states, but the company didn't show any interest in Chicago until 1999, when its first of two Bolingbrook locations opened. Meijer opened a store in Plainfield last year and in Oswego this year. Other locations are in McHenry, Algonquin, Elgin, St. Charles, Aurora, Rolling Meadows and Bloomingdale, as well as Merrillville and Highland, Ind.
In 2008, Meijer plans to open nine stores in Michigan, Ohio and Illinois, and to tear down two stores in Michigan to build new ones in the same locations. The new store in Illinois next year will be in Urbana.
Meijer hasn't entered Chicago or its inner-ring suburbs. An attempt to open a store in Lisle was scuttled in 1999 after the proposal ran into opposition from residents. In addition to the Lisle site, it owns property in Homer Glen and Hoffman Estates, but there are no set dates to open stores in those towns, the company says.
But in recent published reports, Meijer President Mark Murray said the family-owned company isn't backing off plans to expand in the area. "Chicagoland has so much growth going on, and we know it's a particularly ripe spot," he told The Detroit News. "It's never easy, but you have to take the time. We will."
Meijer appeals to price-conscious shoppers, says John Hauptman, a grocery industry consultant for Willard Bishop Consulting Ltd. in Barrington. But in the Chicago area, there's an increasing number of price-oriented rivals, including Wal-Mart, Aldi and Woodman's, he says.
Retail consultant Neil Stern says Meijer has undergone a lot of internal changes in the past two years and executives are "figuring out how to co-exist with Wal-Mart in their world." The company's practice of building far-flung stores near highways in midsized markets doesn't necessarily work in Chicago, he says.
"I think Chicago has been a real challenge for them," says Mr. Stern, a partner at Chicago-based retail consultancy McMillan Doolittle L.L.P. "It's taken them a while to understand the dynamics and how to build a presence here."
John Melaniphy, another Chicago retail consultant, says he'd like to see Meijer take a run at Wal-Mart or Target to give shoppers more choices, but the "ho-hum" shopping experience at Meijer's supercenters must change.
"There's no unique, defining factor that makes Meijer stand out," says Mr. Melaniphy, president of Melaniphy & Associates. "It's just another store, another big box. ... It doesn't appear they've captured the hearts and minds of the consumers (in Chicago)."
From Crain’s Chicago Business
