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Schnucks Will Enter Competitive Grocery Market
In a city filled with grocery stores, Schnucks says it's still coming.
The grocery store chain announced nearly two years ago it planned to bring two new stores to the area - one at the corner of Singer Avenue and Dirksen Parkway and the other at Bruns Lane and Washington Street. The company bought the first site at the end of 2013 and is still in talks over the latter.
A company spokesperson said Schnucks plans to follow through with both sites. As for when the stores would eventually open, it's anyone's guess.
"I've been doing this long enough to know that when people make announcements I believe it when they swing their doors open, and I walk in there. That's when I believe it," said Mike Farmer, Springfield's economic development director
Once the doors do swing open, the company will be entering a saturated market. Newschannel 20 counted 19 chain grocery stores throughout the city of 117,000, not to mention the locally owned and specialty grocery stores. That's also not including Hy-Vee, which plans to open in spring
"To some degree, it is a zero sum game," said Jon Hauptman, a retail market analyst. "So if Schnucks comes in with two stores, somebody or some retailers will certainly be hurt by it."
And the spots Schnucks has chosen are right next to competitors - County Market on Washington Street and Shop N' Save on Dirksen Parkway - whose customers they'll be looking to attract.
The city thinks at least the Singer Avenue Schnucks is worth investing in. It has authorized up to $4 million in Tax Increment Financing (TIF) funds for the store.
"We think that will be a nice complement to JC Penney's as well as stimulate some additional retail in that immediate area," Farmer said.
Once the stores are up and running, it'll be sink or swim, but that's just the way the grocery game goes.
"And the easy sites have already been taken. So now for a supermarket chain to grow, they have to go into more competitive areas," Hauptman said.
A Schnucks spokesperson said the company is prepared to meet the competition when it does eventually open the new stores. She said Schnucks plans to focus on its customers rather than other stores.
Schnucks probably won't be the last addition to Springfield's grocery stores. Farmer said the city is also talking with "several" other companies.