Consumers have been left with fewer choices, and less competition, as regional and local supermarkets markets close
One of the by-products of the economic downturn in the Indianapolis area has been the demise of several grocery stores and the resultant loss of competition for area food shoppers. The recent announcement of the closing of O’Malia’s grocery store in Carmel follows on the heels of several other closings.
The March 26 closing of Joe O’Malia’s Food Market at 136th St. and Meridian will leave just one grocer west of Meridian Street in Hamilton County, and one less of what was a home-grown grocery chain. Marsh Supermarkets, Inc., which acquired the O’Malia’s chain in 2001, had already closed the O’Malia’s location at 56th street in Indianapolis after a 33-year stand there, as well as an 86th Street location.
In an interview for Current in Carmel, Butler University Associate Professor of Marketing Dan McQuiston notes that the reasons are likely financial. “Marsh in general is finding it very hard to compete in a couple of ways,” McQuiston said. “It’s hard to compete in price with Kroger, and with the recent downturn, Wal-Mart has seen a huge increase in its grocery sales. People are very cost-conscious these days.
It’s no secret that Sun Capital (Marsh’s parent company) has been trying to free Marsh up in the last couple of years to try and sell it. So my guess is this is probably a cost-cutting move.”
The Carmel closing follows Marsh’s decision to close one of its flagship stores in Noblesville. According to the Indianapolis Star, Marsh Supermarket officials also attributed the economy to the closing of the Old Town Noblesville Marsh grocery in January. That store closed Jan. 16, and had operated as LoBill Foods until February 2008, when the owner switched from LoBill to Marsh.
“As a matter of good business, companies must continually review, analyze and improve to remain competitive in today’s challenging economic environment. In this particular situation, we had the added challenge of a lease about to expire at this location,” Connie Gardner, senior director of community relations for Marsh headquarters in Indianapolis, said in a news release.
The consolidation is not limited to large chains, though, as independent grocers are closing their doors as well. The venerable the J. R. Western Supermarket in Shelbyville is closing its doors at the end of the month. J. R. Cooper, who has owned and operated the store since 1999, said his small store, like so many other independently owned “mom-and-pop shops,” has fallen victim to changes in retail and shopping patterns. No longer able to compete with big-box chains such as Marsh, Kroger and Wal-Mart, Cooper decided to call it quits.
Local organic and natural-foods grocer, Sunflower Market, a division of the Supervalu chain, closed its Broadripple store in February 2008, and was quickly followed with the announced closing of several branches of the Marsh supermarket chain and its subsidiaries, such as Lo-Bill and Hometown Market.
The closings are indicative of a larger problem and further consolidation as firms struggle for market share and capital. The entire Marsh chain has reportedly been placed up for sale, either as one entity, or broken up regionally.
Florida-based Sun Capital Partners, owner of the Marsh chain, has hired an investment adviser to solicit offers for the company, and the chain most likely will be sold piecemeal, according to the Indiana Business Journal. Although Marsh hasn’t officially listed itself for sale yet or disclosed financials, IBJ reports that most of the potential suitors are interested in clusters of stores, not the entire chain.
As the economy flattens, and begins to show signs of recovery, Indianapolis area food shoppers may see their choices narrowing even further.