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Second City Suddenly First in Retail Excitement

Second City Suddenly First in Retail Excitement

This is a great time to be living in a big city if you're a fan of food retailing.

Urban markets are drawing more attention from retailers scrambling to launch new formats and bolster their positions.

This summer one city stands above the others in generating retail excitement. That city is Chicago, and here's a sampling of some recent developments in and near the Windy City:

• Wal-Mart just opened the first urban version of its small-format Walmart Express store in Chicago's Chatham neighborhood. The giant retailer will follow up with local openings of three more Express stores, three Walmart Market units, and two supercenters.

• Meijer just announced plans to debut its smaller format called Meijer Marketplace next month in the Melrose Park suburb.

• Roundy's has set its first two city-of-Chicago openings for the Mariano's Fresh Market format.

• A new concept in healthier dining and food shopping, Wilde & Greene Restaurant and Natural Market, will launch in the Skokie suburb this summer.

• Meanwhile, Dominick's just introduced to the Chicago market its parent Safeway's “Deal Match” program, which matches discounts of competitors.

Is there something in the Chicago water that's sparking all this activity?

Unlikely, according to an astute observer of food retail who happens to be based in Chicago, Neil Stern, senior partner at McMillan Doolittle.

Stern said the developments result partly from the renewed national focus on urban retailing, but also from a shifting dynamic in Chicago.

“Central to all the Chicago activity is that the top-market-share players, Jewel and Dominick's, are both struggling,” he said.

The challenges of Safeway-owned Dominick's and Supervalu-owned Jewel have emboldened other players, he added. “These two retailers are vulnerable, and that's opened the door for new competition.”

Meanwhile, others making progress in Chicago include Aldi, Whole Foods, Trader Joe's and a number of independents, he said.

Years ago outside retailers had a much harder time making headway in Chicago.

“Byerly's came and went; Marsh came and went,” he said. “Now outside companies come in and succeed.”

It's too early to declare winners and count out any long-established players. For now, the biggest beneficiaries are Chicagoans, who are being showered with attention from retailers of all stripes.

Not a bad way to spend a hot summer in the city.