In an urban exodus that has long troubled city officials, the leading supermarket chains here have closed more than half their stores in the District of Columbia in the past decade.
Ten years ago this month, the Washington area's four major chains - Safeway Stores, Giant Food, Great Atlantic & Pacific Tea Co. (A&P) and Grand Union Co. - had 91 stores within the city's boundaries. Today these chains have only 42 supermarkets in the city.
Safeway, the nation's biggest food chain and the largest supermarket operator in the city, now has 34 stores, including its four higher-priced Townhouse specially outlets, in the city - a steep decline from the 71 it had in February 1968. Giant, Safeway's main rival in the metropolitan area, now has seven stores in the city, four fewer than it had 10 years ago. A&P which had six D.C. outlets in 1968, today has only one at 4330 48th St. NW. Grand Union has closed all three of its D.C. stores.
Supermarkets officials and researchers who have examined the retail food business say the stores have closed mainly because of dwindling profits stemming from a variety of economic and social factors.
Among the causes of this urban profit squeeze, they say, have been high rents, the chains' inability to obtain large enough sites that offer what they view as sufficient display and storage space, inadequate parking facilities, frequent shoplifting and other crimes. A number of chain supermarkets closed after they were damaged in the 1963 riots here. Several were shut because of urban renewal and highway construction projects.
Most of the supermarkets that closed during the last 10 years, according to supermarket and other officials, were small stores that were regarded as uneconomical and obsolete. The supermarket industry now puts its faith in sprawling outlets offering more than 10,000 food products and a widening assortment of other merchandise, ranging from drugs and knitting supplies to frying pans and auto accessories.
The supermarket exodus, which has left its imprint on almost every section of the city, has prompted concern among government planners, urban activists, social workers and others. They believe it has caused hardship and inconvenience, especially for low-income, handicapped and elderly city residents. The supermarket closings also have been linked to neighborhood decay and losses of city tax revenues.
Today, however, some officials say they detect signs of a possible turnabout. Some city officials, supermarket spokesmen and local business leaders said in recent interviews that the supermarket exodus appears largely to have ended and that a few additional chain food stores may open in the city in coming years. "It's bottomed out," said John R. Tydings, executive vice president of the Metropolitan Washington Board of Trade.
Among signs that the supermarket chains are weighing a possible expansion of their much-reduced city operations are these:
Safeway has announced plans to replace two of its supermarkets in affluent Nothwest Washington neighborhoods with larger, more elaborate stores - one near Georgetown at 1855 Wisconsin Ave. and the other at 42nd and Ellicott streets. In addition, Safeway officials said in interviews that they are currently negotiating for four possible store sites, including two in low-income communities. Two of these would replace existing stores, while the other two would be new outlets, they said. They refused, however, to identify the sites.
Giant plans this year to build a supermarket in Northwest Washington's innercity Shaw neighborhood, an area that recently has been a resurgence of economic development. The store, which would be located at ninth and O streets NW, would be part of the O Streets Market's planned redevelopment and would be run under an experimental joint ownership arrangement that would include Giant, a Shaw citizen's group and the District of Columbia Development Corporation.
A&P is exploring possible sites for new stores in the city, according to A&P and D.C. government officials. No plans for new outlets have been announced, however. For A&P, moreover, any enlargement of its D.C. operations, an A&P spokesman noted, would have to be measured against the company's national troubles that beset the chain in recent years. Three of the five A&P's that were shut here during the 1970s, the spokesman said, were closed because of A&P's nationwide moves to weed out its least profitable stores.
The past decade's exodus of city supermarkets, although dramatic, has been noted previously in D.C. government surveys. New statistics for the 10-year period through mid-February of this year were compiled by The Washington Post from data supplied by the four supermarket chains. A D.C. government study published in 1975 reported that a 33 percent decrease in major food chain stores had occurred in the city since 1968.
Some city officials contend that the impact of the supermarket closings may have been somewhat less severe than the statistics themselves appear to suggest, partly because the supermarkets that shut included many small stores that served comparatively fewer customers than other larger supermarkets here.
Moreover, they note, some of the sites vacated by the chains later were taken over by independent grocery retailers, including a number of black-owned enterprises. Some of these have remained in business, while other have closed. Although there is some debate over the issue, some business officials believe these independent stores charge higher prices than the chains, partly because they have less access to private label, or house, brands.
The independent supermarkets in the city appear, however, to account for only a relatively small proportion of the groceries purchased by city residents. According to a special Census Bureau tabulation made available to The Post by an economist who has studied the data, the major chains - Safeway, Giant and A&P - operated 81 percent of the supermarkets in the city in 1972 and a considerably larger percentage of the supermarkets that had the highest sales volumes.
Although the supermarkets closings during the past decade have been scattered throughout the city, they are widely believed to have had their greatest impact in low-income neighborhoods, where many residents do not own cars and cannot easily travel long distances to go grocery shopping.
The city government's 1975 study of the supermarket exodus stressed this issue. It cited data indicating that sufficient demand existed in low-income areas of the city to support 29 additional supermarkets and expressed special concern about Southeast Washington. "The lack of major food stores is a more serious problem east of the Anacostia River where there are 50 percent fewer stores than in the Northwest section," the study said. There were five major chain supermarkets in Southeast Washington east of the Anacostia River then, the same number as now.
Amid continuing controversy over these issues, the supermarket chains have found themselves caught between corporate demands to bolster profits and social pressures to demonstrate concern for the city. Supermarket officials have responded in a variety of ways over the years.
In a speech to the Washington Urban League last June, Joseph B. Danzansky, then Giant president and now the corporation's board chairman, departed from the chains' customary economic arguments to concede:
"But let's face it. Many stores are closed, not because they operate at a loss, but because they are marginal and the capital can be more advantageiously invested elsewhere. I believe that every effort should be made to keep stores open in the city when no alternative facilities exist and, yes, I believe that a limited number of marginal branches can be supported in the public interest by an otherwise profitable company."
Carey Ford, Safeway's Washington division manager, expressed more traditional views in a statement issued in response to a request by The Post for an interview. For refused to be interviewed.
Forecasting a "very bright future" for the city, Ford said, "While we have closed some of our small, non-profitable stores, we have also modernized and expanded stores and we are actively pursuing a program to upgrade and replace others." He noted, however, that store sites in the city are scarce, expensive and subject to zoning restrictions that may pose obstacles.
Despite years of discussion by supermarket executibes, local business leaders and city officials about ways in the city, the suburbs have remained the focus of supermarket expansion, as they have in many other metropolitan areas throughout the United States.
Safeway, for example, now has about 85 stores in Montgomery and Prince George's counties and Northern Virginia, according to a Safeway spokesman. Giant has almost 70 suburban supermarkets, a spokes said. In addition, Danzansky recently announced plans to build 15 new suburban Giant supermarkets in the next three years.
The supermarkets' flights from the city to the suburbs, here and elsewhere, has been analyzed by a number of economists. Donald R. Marion, a food marketing economist at the University of Massachusetts who has studied inner city supermarkets in many parts of the United States, described what he regards as the most serious problems they face in a recent interview.
Inner city supermarkets, he said, often have lower sales volumes, partly because inner city residents have less money to spend and partly because some inner city residents prefer to shop in the suburbs if they can get there. Shoplifting and other crimes occur more frequently at inner city supermarkets, he said. Inner city supermarkets, he added, also have more difficulty in attracting experienced employes and often have higher rates of turnover among their employes.
In Washington, supermarket official appear to place greatest stress on difficulties they encounter in finding or assembling large enough sites in the city to accommodate the big stores they prefer to build. In addition, they say, the costs of buying or leasing land in the District are high. A Safeway spokesman said Safeway now pays about $4 or $5 a square foot in annual rent for most of its suburban stores in contrast with $8 to $9 in the city.
Because the chains often are forced to operate smaller stores in the city than in the suburbs, supermarkets officials say, the operating costs of their D.C. outlets are often disproportionately high. The smaller stores attract fewer customers and do less business, they say, but the chains cannot achieve significant labor and overhead savings at small stores to offset their lower sales volumes.
Crime also has led to the closings of some D.C. supermarkets. Supermarket officials say that shoplifting in some stores has been costly and that violent crime, such as robberies, has sometimes deterred customers from shopping at stores and resulted in high labor turnover.
One of the more dramatic episodes in which crime was a factor in the closing of a supermarket occurred at a widely hailed Southeast Washington store.
In 1969, Safeway opened a supermarket at 2600 Bryan Pl. SE in a move that was partly designed to demonstrate Safeway's concern for the city. Loitering by youths, theft and robberies plagued the store from the start, a Safeway spokesman said. Customers were afraid to shop thee. In 1970 James Taylor, one of Safeway's first black store managers here, was fatally shot during a holdup at the store. It closed in 1972.
Next: Distant markets and the problems they cause for the poor and elderly.