A new study commissioned by the city estimates that District food stores lose from $60 million to $120 million dollars a year to the suburbs. The study of Washington's food services, conducted by the University of the District of Columbia's Institute of District Affairs, also said that the number of major groceries here has shrunk from 91 in 1968 to 33 last year, and that the city needs as many as 20 more moderate-sized grocery stores.

Lawrence P. Shumake, director of the city's Office of Business and Economic Development, says the shortage of major supermarkets takes jobs and tax dollars away from the city.

"We can reverse that trend," Shumake insists. "There is public land that can be leveraged." OBED officials agree that there are a few abandoned lots and surplus federal land, such as Camp Simms in Southeast, that could be leased or sold to supermarket developers at a low price.

While many District residents polled in the study believed that small profits, shoplifting and crime are major factors that drive stores out of the city, store managers cited other reasons. Those who run the major chain groceries reported that they were less concerned about crime than they are about employe pilferage and what they said were shrinking profits from their smaller, less well-stocked stores.

Both store owners and city economists say the more important reason why supermarket chains are closing smaller stores in the District is because small stores are becoming outmoded and understocked, which company officials say keeps their profits low. The same officials say that because the city has little available land upon which these stores can expand or build new facilities with parking lots, they have to relocate to the suburbs or build bigger stores on the few large parcels of land they can get. Spokesmen for several major grocery store chains said that the trend now is toward larger stores that sell a variety of products including food, clothing and appliances.

"The larger stores emphasize one-stop shopping," said Giant spokeswoman Susan Portney. She also said that Giant is adding profitable sections such as pharmacies to its stores.

Closing these smaller stores can dent the morale of a community and often reduces the customer traffic to nearby shops. Because they attract customers, large department and grocery stores are often "anchors" around which smaller businesses like drug stores, shoe stores, dry cleaners and bakeries build.

The recent closing of a Safeway at 12th and Quincy streets NE in Brookland is an example of this problem. Safeway claimed the small store was not bringing in enough money. Its closing means shoppers will have less reason to come back to that area. Merchants along the 12th Street strip say the Safeway's closing already has begun to reduce business in their stores.

City officials say that finding space for large stores is difficult. The draft of the UDC study, prepared last week, said that all wards except Ward 3--west of Rock Creek Park--did not have enough food stores to meet the needs of local residents.

Jerome Paige, UDC professor of economics and coordinator of the study, said that Ward 8, in far Southeast, has only two major grocery stores. The UDC study suggests that the ward needs four more. The "Gold Coast" area off 16th Street in Northwest also needs four additional grocery stores, according to the report.

"We do have a problem in Ward 4," says City Council member Charlene Drew Jarvis, who tried unsuccessfully to keep a Safeway store on Georgia Avenue and Ingraham Street NW from closing recently. Jarvis said Safeway told her the store was too small to be profitable, and replaced it with a "no frills" store with limited inventory. "Apparently the neighborhood didn't like it," she said, because that store quickly failed and became a People's Drug store.

Similarly, another Safeway at Georgia Avenue and Piney Branch Road NE needs to expand to stay in business, but according to store officials, kinks in the zoning laws for that area are hampering construction plans. Problems like these have sent many Ward 4 residents to shop at supermarkets in Silver Spring and Brentwood, Jarvis said.

Many Southeast residents say they prefer shopping in Maryland where the price and quality of meats and vegetables are better. "They just have the necessities here," said Thomas Davis, a Ward 8 resident who was shopping at the Safeway on Martin Luther King Ave. SE just across the street from the entrance to St. Elizabeths Hospital.

The loss of the smaller chain groceries has left voids in some communities that have been filled by independent stores such as Magruders, Shelton's Marketbasket and the Brentwood Market. In the past two years, two abandoned Safeways have been taken over: one in Northeast now called Super Pride, which is operated by a black group from Baltimore, and another in Southeast now called Warehouse Supermarket, which is owned by Trio Trading, a Korean company.

"They the [Korean-owned Warehouse Supermarket] do supply the basic needs of the community," says Albert Russell, president of the Good Hope Road Merchants Association. He said that these independent stores can survive even when the chain stores cannot because they do not have to pay employes union scale salaries and do not offer as wide a range of goods.

Super Pride's president Henry Edwards agreed. "Our wages are not as high as Giant," he says. Edwards said his overhead costs are much lower than the big stores because he does not have warehouses and trucks to maintain and he operates his stores with fewer employes. However, Edwards said, independent stores in the District are suffering because rents are high and inner-city markets are always difficult to run.

Running an independent store that can compete with the big chains is "like a flea trying to [wrestle] an elephant," says George Shelton, the owner of two small grocery stores in the city. He says his prices compare favorably with his competitors but he insists that the entire D.C. market is "super-inflated because of a lack of competition."

"Medium to large independent stores are lacking in the District," said UDC's Paige, "because Giant and Safeway have such a hold on the market. . . . You don't have frequent price wars with just two chains." He also said that chain stores control the leases to the small stores they move out of, and are not always willing to sublet those facilities to another grocer. CAPTION: Picture 1, Running an independent store is "like a flea trying to [wrestle] an elephant," says store owner George Shelton. By Vanessa Barnes Hillian -- The Washington Post; Map, no caption, By DAVE COOK -- The Washington Post