Sometimes, all it takes is the shadow of a Wal-Mart to drive away business. That appears to be the case in Geneseo, Illinois. This small city has a Wal-Mart discount store on East Bester Drive. Wal-Mart has proposed building a superstore on East Bester Drive, right next to its discount store, and then shutting down the discount store. But that’s not all that will shut down. Two grocery stores in this small community of just over 6,500 people will also shut down — before the Wal-Mart superstore even arrives. Jewel-Osco announced this week that its Geneseo store will leave town at the end of May. In March, the Aldi’s grocery store also said it’s leaving Geneseo too. It was only 5 years ago that the Jewel Osco opened up its newly-rennovated 36,000 s.f. store along Highway 6 in Geneseo. Jewel bought the store from Eagle Country Market when the latter went bankrupt. When it renovated the store, Jewel Osco employed just over 100 unionized workers. When the store opened, the district manager told the Quad City newspaper, “Although we’re part of a large corporation, this is your store. It’s important we come together for this community.” The Mayor of Geneseo welcomed the new store with a backhanded compliment. “Some people say they are a little pricey,” said then-Mayor Merle LeSage, “but the personnel, who were mostly former Eagle employees, are different now. There are a lot of smiles on their faces. They are happy.” But five years later, those happy faces are gone, and dozens of United Food and Commercial Workers are out of work. Local officials told the media they were “completely stunned” that these two grocery stores were closing. “Certainly we’re disappointed in losing any retailer or business in the community,” the city administrator said. He claimed the city has enough population to support another grocery store, but the city had roughly 6,523 people as of 2006, only 43 more than it had in 2000. Population growth has been almost stagnant. In 2000, the city had 14% of its workforce in retail, or 440 workers. “Jewel-Osco continuously evaluates its stores to identify opportunities to strengthen its overall business,” the company said in a press release. “While the decision to close a store is always difficult — given the impact on associates and customers — it is guided by what is best for the company’s ongoing success and future growth. After much consideration, a decision has been made to close the Jewel-Osco store in Geneseo… effective May 30th. About 75 employees will be affected and they will receive severance packages. Some associates will be offered transfers.” In January, Wal-Mart pulled its plans from consideration, saying that it wanted to rework its proposal. Now city officials have to wonder if Wal-Mart’s plans for Geneseo are not as firm as they thought — which would make Geneseo a three-time loser.
Sprawl-Busters reported this week that since last June, Wal-Mart has cancelled, or delayed, 45 superstore projects. With good reason, then, Geneseo officials might be nervous about Wal-Mart’s future in Geneseo. When Aldi’s, which is a small format, German-owned, store, announced its closure, it cited the lack of traffic in their store. If a Wal-Mart superstore opened in Geneseo, it’s grocery store square footage would be bigger than the 36,000 s.f. Jewel Osco. In effect, the square footage capacity for groceries in Geneseo would double, but the population of shoppers remains flat. No wonder, then, that the competition didn’t bother to stick around and die slowly. Readers are urged to call Geneseo Mayor Pat Eberhardt at (309) 944-6419, with the following message: “Mr. Mayor, with your major grocery stores folding, perhaps its time to consider putting a cap on the size of superstores, so that your small merchants can survive and compete on a level playing field. Geneseo already has a Wal-Mart. The superstore only adds groceries, and the smaller competitors realized that there simply was not enough population base to support a doubling of your square footage devoted to groceries. So the smaller guys got out before the real damage came. If you limit the size of stores, you allow a more competitive atmosphere to prevail. As you have seen with Aldi and Jewel Osco, Wal-Mart is not the beginning of competition, but the end. Bring your zoning into the 21st. century, and cap the size of stores. You may also want to require any developer that is expanding its store at another location, to put in escrow a demolition bond to cover the cost of tearing down their own store if it remains vacant. Think of it this way: You’re not gaining a superstore, you’re gaining a dead discount store as well.”
