Even promises of tax incentives and threats of a congressional inquiry may not be enough to lure Cincinnati-based Kroger back to the city it left just less than three years ago, analysts said Monday.
That assessment comes after City Councilwoman Monica Conyers staged a widely publicized meeting with a Kroger official on Friday detailing what incentives the company might receive from the city should it decide to open a store in Detroit.
According to Sam Riddle, Conyers' chief of staff, the councilwoman requested the meeting with Kroger's manager of integrated communications, Dale Hollandsworth, after the company bought 20 former Farmer Jack stores in southeastern Michigan, all of them in Metro Detroit suburbs.
"This is no mystery to us," Riddle said in a telephone interview Monday. "This chain has systematically and consciously avoided the city of Detroit, and when you look at the demographics, it shows potential institutional racism at the corporate level."
Hollandsworth met with Conyers and her staff in Detroit for about an hour Friday. He declined to comment Monday, instead directing questions to Conyers' office. On Friday, Hollandsworth told reporters he would present Conyers' offer to Kroger officials for review, but he made no promises as to the potential outcome.
Both sides have agreed to sit down in a month to discuss the matter again, but details about exactly what Conyers proposed to Kroger remain unclear.
James Canning, deputy press secretary for Mayor Kwame Kilpatrick, said the mayor is "definitely supportive" of a chain coming to Detroit, but noted that his office was also unaware of exactly what incentives Conyers offered Kroger.
Still, retail analysts following the talks say any offer to Kroger involving tax breaks or other incentives is unlikely to lure the chain here as long as economic factors continue to make operating grocery stores in Detroit more expensive than in its suburbs.
"If a store can't make it on its own, those tax incentives are worth nothing anyway," said David Livingston, a Wisconsin-based grocery industry analyst. "It goes a lot further than dollars and cents up front. A store has to know it can make money in the long term. They're not in the business to lose money."
Ed Nakfoor, a Birmingham-based retail consultant, said such incentives don't work well in creating a stabilized retail environment, especially in turbulent markets like Detroit.
"It's such a Big Brother kind of thing. It's bullying business to go places where they know they won't be profitable," he said. "It's things like this that make people think twice about wanting to set up shop somewhere. And that's bad business."
Jane Shallal, president of the Associated Food and Petroleum Dealers, an industry group representing some independent Metro Detroit grocers, complained Monday that none of her members that expressed interest in buying a Farmer Jack location were offered any tax breaks by the city. She said she would be questioning city officials beginning today about why independent business operators weren't made the same offers.
Conyers' public questioning of Kroger's decision not to buy either of the Detroit Farmer Jack stores up for sale by parent company Great Atlantic & Pacific Tea Co. followed outcries from community leaders and activist groups over what they contend is a lack of access to quality, fresh food in Detroit.
Riddle said Conyers has "heavily discussed more than once" the situation with her husband, Rep. John Conyers, and has not ruled out the possibility of requesting a congressional hearing on the matter. He also said a letter is being sent to Kroger's top brass reminding them of the availability of the former Farmer Jack on East Jefferson.
That location was originally slated to be transformed into an independent grocery store, but that deal fell through on Friday because of unfavorable terms in the proposed agreement, according to Shallal.
The other location, at Seven Mile and Livernois, was purchased by local grocer Jamal Abro, who is currently transforming it into a Mike's Fresh Market. Kroger closed its last store in Detroit, at Seven Mile and Gratiot, less than three years ago. Abro purchased that store and renovated it into his first Mike's location.
http://www.detnews.com/apps/pbcs.dll/ar ... 0339&imw=Y