Why did the Kroger in Macon close? Did its loyal customers die off or change stores?

The Kroger on Pio Nono Avenue is now dark and quiet. The once crowded parking lot and busy fuel center are empty.

The store, which opened at 400 Pio Nono Ave. in November 1997, closed forever Friday.

When the company announced March 26 it was closing the store after 21 years, it said the move was necessary because of “declining sales and negative profit over an extended period.”

Although the company declined to elaborate, The Telegraph talked to retail experts and looked at what’s going on in the grocery industry to try to understand what might have led to the closure.

First of all, it was not the only store that Kroger has closed fairly recently. Stores in Savannah, Augusta and three in Mississippi have closed all due to declining sales and negative profits. On the other hand, the Cincinnati-based national grocery chain has expanded some existing stores, such as the ones on Tom Hill Sr. Boulevard, Forsyth Road and Hartley Bridge Road in Bibb County.

So, what could have led to the slowdown in sales and profits at the Pio Nono store?

Greg George, an associate professor of economics and executive director of the Center for Economic Analysis at Middle Georgia State University, speculated that there were probably several factors affecting the store.

“Macon has for a while probably had too much square footage of grocery space for the population,” George said. “Just look at how many Publix, how many Krogers and Walmarts are out there. Probably the area was overbuilt with grocery stores.”

In Macon, there are two Publix stores, six Krogers (not counting Pio Nono), three Walmarts and other smaller grocery stores, such as The Fresh Market, Aldi, Sav-A-Lot, General Dollar Market and Food Depot, as well as neighborhood markets.

A real estate broker told The Telegraph for another story last month about several other Macon grocery stores that had either moved out of urban neighborhoods or closed.

Another factor that likely led to the closure, George said, is that the 84,000-square-foot Pio Nono Kroger was a large store.

“So it would have a high-cost structure associated with it,” he said. “It’s a big store, a lot of square footage there, and so even if they were doing fine with customers, it’s probably one of their more expensive stores to keep open.”

Also, as the population has spread out into the suburbs and as people come from other counties into Macon to shop, they would not be inclined to go to the Pio Nono store to get their groceries, he said. They have easier access to other grocery stores, including Kroger, in the suburbs.

“I think when you look at the profitability of their stores, … it was just the first one to go,” George said.

Nationwide, there is a slowdown in the growth of new grocery space, according to Jones Lang LaSalle, a real estate and investment firm, as reported by Supermarket News.

“In 2017, grocery store openings dropped 28.8 (percent) year over year,” the company said. “The decline reflects chains’ efforts to re-examine their current store footprints and fine-tune strategies to deal with new competition — both online and brick-and-mortar.”

Even when new stores are built, the trend is to build ones with a smaller footprint, the report said.

Following the initial store closing announcement, some people speculated on Facebook that Kroger closed the Pio Nono store because it had too many "slip and fall" lawsuits and too much crime. There was only one lawsuit filed with Bibb County Superior Court for that store during the past five years.

Also, after The Telegraph examined the type and number of calls to law enforcement from all seven Kroger stores in Bibb County from March 2017 to March 2018, the Pio Nono store came in third. At nearly 300, more calls came from the Baconsfield's store on North Avenue, followed by 265 calls from the Tom Hill Sr. Boulevard store and 240 calls from the Pio Nono store. The Baconsfield store was highest in calls for theft/shoplifting, fights or disorderly conduct and for hit and runs.

John Karolefski, editor of GroceryStories.com and a veteran analyst who has followed the grocery industry for more than 25 years, said the demographics of the Pio Nono store's customers probably had changed.

“Older shoppers perhaps have shopped in the store for years. They are familiar with the store, maybe know the butcher or the baker and they are comfortable there, but they don’t live forever. They pass on,” Karolefski said. “So the new consumers don’t have these loyalties, and perhaps they are more likely to drive past that store to other stores for their goods.”

Taking a look at two census tracts (see the map on macon.com), one in the area where the Kroger is located, which includes the Stanislaus neighborhood and portions of Vineville and Pierce avenues, and an adjacent census tract to the south, which includes portions of Roff, Napier and Montpelier avenues, the population hasn’t changed much.

When the tracts are combined, the total population was 2,982 in the 2000 census and 2,617 in the 2010 census, a difference of 365. The population increased by 30 in the Kroger tract, but it decreased by 395 in the adjacent tract.

Perhaps one of the most telling details from the census data is the change in household income.

In 2000, households with an income of $35,000-$49,999 made up 17.1 percent of the Kroger tract and 14.9 percent of the adjacent tract. But by 2010, that household income was 5.2 percent in the Kroger tract and 6 percent in the adjacent tract.

The number of people who worked in management or professional jobs dropped 12.3 percentage points from 2000 to 2010 in the Kroger tract, but the number was up 8.8 percentage points in the adjacent tract for the same period.

The percentage of families below the poverty level increased in both tracts from 2000 to 2010.

After The Telegraph reported the store closing last month, several residents commented on Facebook that they couldn’t understand why sales were down when the store appeared busy and the parking lot was often full.

“They are going to have varying shopping patterns from store to store because of demographics of the local population because of the incomes,” George said. “If top shelf stuff is more profitable, then neighborhoods that buy more top shelf stuff, the store will be more profitable.”

Karolefski, the grocery store analyst, said a recent national survey indicated another reason sales could decline in a store.

The report said “basically shoppers nowadays shop in about three or four different grocery outlets for their groceries,” he said. “They may be buying their meat and fish in one store and buying their baked goods and beauty care items in another store.”

And he agreed that shoppers on a tight budget could be buying lower-priced items at one store while more affluent shoppers are buying higher-priced items at another store. And both stores are busy.

George agrees.

“There are different consumption patterns from market to market, and that can vary from city to city and even within cities.”

This story was originally published April 25, 2018 at 3:32 PM with the headline "Why did the Kroger in Macon close? Did its loyal customers die off or change stores?."