Our Views: Government shouldn't meddle in the grocery business

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Monday, September 11, 2017

The increasingly prevalent expectation for government to solve the private sector's problems likely explains why some people are so indignant over Pick 'n Save's decision to close its south-side Janesville store.

They want the city to “do something” to stop the closure or put another grocer in that spot.

The rise of tax increment financing districts has unfortunately fueled the impression that government can spur private sector growth with a single city council vote. When companies, such as SHINE Medical Technologies, seek funding from the city, the government maybe starts to appear as the economy's ultimate arbiter.

But as Janesville Economic Development Director Gale Price noted during an interview, government's options in the Pick 'n Save situation are limited. “It's a misunderstanding among some of the citizens. You just can't force a company to stay open or move into a market,” he said.

That said, the city can be proactive in reaching out to prospective developers and help them assess the south side's demographics. Price said he's “optimistic” another grocer will move into Pick 'n Save's space, though likely a smaller one.

“Grocers tend to be neighborhood centric,” he said. “If a grocery store is down there, and it's well operated, then people tend to shop there.”

Many people appreciate Pick 'n Save's selection and service, and its closing is not necessarily an indictment of the store's quality. Rather, the 120,000-square-foot store may have simply been too large for the south-side market.

Price imagines an 80,000- to 100,000-square-foot shop being a better fit for the area's demographics.

If a new store moves into the space, it won't be because government made the difference. Nor will it be the government's fault if the space remains empty or gets filled with retail shops.

In the end, Janesville can support only so many grocery stores. As one grocery analyst contacted by The Gazette stated, grocery shopping is a “zero-sum game.” People don't start buying more food because a new grocer moves to town. The opening of Festival Foods in 2015, and perhaps Aldi in 2002, on the city's north side contributed to Pick 'n Save's demise.

While many south-siders have lamented Pick 'n Save closing, they are partially to blame. We expect many of them travel to the north side to shop, maybe even passing Pick 'n Save on their way. If south-siders had shown a greater commitment to their south-side store, we possibly wouldn't be talking about Pick 'n Save closing.

But at the same time, we cannot fault south-siders for pursuing their own economic interests if that meant spending more money on the north side. It's not fair to ask a neighborhood to sustain a flawed business model. Pick 'n Save stated the store suffered from poor “long-term financial performance,” and there was probably little south-siders could do to alter Pick 'n Save's fate.

Only the private sector can resolve the economic challenges facing the south side. Innovators and entrepreneurs who decide to move to the area represent its greatest hope. Through the creation of new jobs and housing, demand for a south-side grocer and retailers will emerge.

While government can encourage economic development, government alone cannot drive growth. The only entity that can come to the south side's rescue is the south side.

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