Detroit News – Uneven playing field hurts Detroit’s independent grocers – May 14, 2012

May 14, 2012

By John Loussia

In just a matter of days, Austin, Texas-based Whole Foods will break ground on a store site north of Mack Avenue
between Woodward and John R in Detroit. Half of the project’s estimated $10 million price tag will be underwritten by
state and local incentives. Similarly, a new Meijer, to be developed on the site of the old Redford High School, will
receive a $3.3 million brownfield tax credit from the Michigan Economic Growth Authority in order to move forward.

Will the stores be successful? The precedents are not good, with a troubling pattern that has played itself out over
and over again in Detroit: A name-brand, big-box chain is attracted to the city with significant tax incentives. The
store fails. The store is ultimately purchased and run successfully by an independent grocer, sans credits, abatements
or incentives of any kind.

In fact, in the past five years, two former Farmer Jacks and one Kroger store closed — all of which were purchased
by independent grocers in Detroit and now sport such names as Farmer John’s, Food Express and Mike’s Fresh Market.

Over the past 10 years, independent grocers have invested $26 million of their own money for new store construction
in Detroit with 10 new projects. Another $15 million in private investment has gone toward remodeling an additional 13
facilities. These are not party or convenience stores but brand new full-service grocery stores of 10,000 square feet
or more, offering fresh meat, dairy and produce departments at affordable prices.

Detroit’s independent grocers welcome competition and a free marketplace. In order for everyone to compete fairly,
however, there needs to be a level playing field. That does not exist.

Our grocers have remained loyal to the city, with the majority of our stores boasting 30-year histories of serving
the communities in which they reside. We want to continue that commitment to Detroit. Unfortunately, this loyalty
is not reciprocated by state and local entities. Instead, financial incentives consistently go toward a steady stream
of ‘here today, gone tomorrow’ national chains, from Farmer Jack and Walgreens to Kroger and Zaccaro’s. The
names may sound attractive and exciting, but the model simply does not work and wastes millions of dollars of
taxpayer money.

We’ve all heard the myths that provide fodder for this travesty that is perpetuated, that Detroit is a “food desert.”
Yet, how can that be when there are 83 full-service grocery stores, many supplied by Spartan Foods and Eastern
Market, located throughout the city? (See map at: http://mydetroitgrocers.com/locations/). It is a convenient untruth.

The playing field needs to be leveled. A true standard of competition needs to be implemented and followed. No
corporate entity should be allowed to “hit and run.” Especially when it comes at the expense of those who, in the end,
remain here to save the day.

John Loussia is the chairman of the Detroit Independent Grocers, an association of more than 50 supermarkets
dedicated to serving Detroiters. DIG is an affiliate of the Chaldean American Chamber of Commerce
.

http://www.detroitnews.com/article/20120514/OPINION01/205140320#ixzz1uqex4Cm8