Independent Grocers Close Unprofitable Stores
Citing profitability issues, some independent grocers recently shuttered underperforming stores. The closings underscore the challenges that many food retailers are facing as food prices, the labor market and consumer confidence remain in a state of flux.
On Feb. 24, Kowalski's Markets shut down its store in Eagan, Minn., just south of Minneapolis. Although that grocer is currently working on two new locations, that particular outpost had been struggling.
In a statement ahead of the closure, Kowalski’s reported that the site had not been profitable. “We do not take this decision lightly,” said CEO Kris Kowalski Christiansen. “We have done business in and partnered with the wonderful Eagan community for 16 years. The customers who made us a part of their lives were well-loved by our staff; many amazing friendships were forged during our time in Eagan. To everyone who called the Eagan market ‘my Kowalski’s,’ my family and I say, ‘thank you.’”
According to Kowalski Christiansen, all workers at the Eagan store were offered jobs at their current status, pay and benefits at other locations, including the new stores in the towns of Edina and Minnetonka that will open in this year and in 2025. “We appreciate their many bold, concerted efforts to make Eagan a success in every way possible,” she added.
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Meanwhile, on the West Coast, the indie Gelson’s announced that its location in Laguna Beach, Calif., is ceasing operations. The store opened in 2016, but was not able to turn the corner, the company affirmed. “The limited population of the area coupled with challenging economic headwinds for grocers in California have unfortunately made this decision necessary,” said President and CEO John Bagan. “Despite an amazing and dedicated team, Laguna Beach has been unprofitable.”
Like Kowalski’s, Gelson’s is investing in new stores even as it pulls back in an area that did not work out. The retailer recently refreshed a store in nearby Dana Point, Calif., and welcomed shoppers to a new store in West Los Angeles in November.
On the East Coast, Mike's Organic is closing its store in Greenwich, Conn., after about a year. The refrain of profitability was echoed with this business decision, too, as founder Mike Geller said that the operation was not sustainable.
In an Instagram post, he shared, "We fought through adversity and challenges we never could have foreseen. Had successes and failures. Several issues impeded our progress, including significantly higher-than-anticipated construction costs, inflation, food prices rising at the highest rate in decades, continued challenges in the retail industry, and more. In the end we were not able to get the business to the place it needed to be in the time we had. “
Geller launched Mike’s Organic in 2009, as a food delivery and warehouse shop out of Stamford, Conn., and opened the Greenwich store in the Cos Cob neighborhood in 2023. The store got some buzz when lifestyle doyenne Martha Stewart touted the store in her blog and said that she was a customer.
Operating 11 stores across the Twin Cities, Woodbury, Minn.-based Kowalski's Markets was founded in 1983 by Mary Anne and the late Jim Kowalski, and is currently run by Mary Anne and her daughter, CEO Kris Kowalski Christiansen. Gelson’s is a collection of premium food and beverage markets with 27 locations throughout Southern California featuring the full breadth and amenities of a traditional grocer. Each store offers a wide range of carefully selected produce, meat, seafood, bakery, and floral items, as well as chef-crafted signature and seasonal recipes from Gelson's Kitchen, including deli to-go and catering.
