Grocery woes take a toll with 700 jobs lost in Joliet

JOLIET – About 700 Joliet jobs in the grocery business will have been lost this year by the time Central Grocers closes its warehouse in July.

The shutdown of the Joliet-based company and its warehouse will follow the scheduled closing of the Ultra Foods store on Larkin Avenue in June and the closing of two Certified Warehouse Foods stores in April.

“I think it’s an indication of how the grocery industry is becoming so competitive that unless you’re a conglomerate it’s hard to stay afloat,” said Thomas Stiede, secretary and treasurer of Teamsters Local 703, which represents warehouse workers at Central Grocers.

Central Grocers, which filed for Chapter 11 bankruptcy Thursday, would have been celebrating its 100th anniversary in a better business climate.

The company was formed in 1917 as a cooperative of “grocery store owners collaborating to achieve buying and marketing efficiencies,” states a filing with the bankruptcy petition that describes Central Grocers’ financial problems.

That model worked for decades, providing independent stores with groceries they could sell to compete with the large national and regional chains.

The company’s Centrella brand products have been familiar mainstays on the shelves of independent grocers.

In 2009, when Central Grocers moved its corporate offices to Joliet and opened its 920,000-square-foot warehouse, the company was growing and adding workers. The company had 549 workers last week, according to a notice sent to employees informing them that their jobs will be terminated between June 26 and July 10.

The bankruptcy statement submitted by Central Grocers’ Chief Restructuring Officer Donald Harer describes a “highly competitive” retail food industry in which “consumer preferences continue to shift at a rapid pace.”

“While the traditional, independent grocer has long faced peripheral competitive challenges from the likes of warehouse clubs, drug stores and convenience stores, it now is losing market share to online retailers,” Harer stated.

Other challenges, he said, are pressure for low prices along with “the recently explosive growth in consumer demand for a ‘gourmet’ shopping experience.” Deflation in food prices also is taking its toll, Harer said.

Central Grocers owns the Strack & Van Til supermarket chain, a regional network of stores in northwest Indiana and the Chicago region that includes Ultra Foods. Those that are not closing are being sold.

The Ultra Foods store in Joliet has more than 100 employees, one worker there said. The company has not confirmed the number. But layoff notices last month under the Illinois Worker Adjustment and Retraining Notification Act indicated other Ultra Foods stores being shut down have more than 100 workers.

Ultra Foods is scheduled to close by June 18.

Certified Warehouse Foods, which also was a Central Grocers co-op member, had about 50 employees.

Certified owner Ken Clymer talked about the growing competition his two East Side stores faced from Wal-Mart, but also from dollar stores selling packaged groceries, milk, eggs and other refrigerated and frozen items.

“Everyone’s selling groceries,” Clymer said more than once as he discussed his own competitive challenges.

He closed his two stores April 11 and 12.