Giant Eagle Inc. is pulling out of the Toledo market, announcing plans Friday to close both area stores on May 3.
Industry experts say the decision isn’t surprising, as the Pittsburgh supermarket chain never seemed to gain a solid foothold in the crowded Toledo market.
Still, local officials were caught off guard.
“It definitely is going to be a hit to our community,” Sylvania Township Trustee John Jennewine said. “They were very strong supporters of the community, and very involved. We’re going to be sad to see them go.”
Giant Eagle came to the area in 2001, with a store in Rossford at the Crossroads Centre.
Two years later, the company opened a store on West Central Avenue in Sylvania Township.
“Our decision to close these locations was made only after careful consideration, particularly given the impact on our team members and customers, and after significant efforts to differentiate these stores in the marketplace,” Giant Eagle spokesman Dan Donovan said in a statement.
Giant Eagle said the two stores employ a total of 179 workers, most of whom are part-time employees. A spokesman said Giant Eagle will provide employees “a fair and equitable severance package.”
David Livingston, a supermarket analyst at DJL Research in Milwaukee, said Toledo seemed to be a failed experiment for Giant Eagle.
“I think the sales were just always disappointing in Toledo,” he said. “There’s an old saying, different courses for different horses. Their course is Pittsburgh and Cleveland. Toledo is a little different.”
Giant Eagle operates dozens of stores throughout northeast Ohio and has a relatively strong presence in Columbus, but the two Toledo-area stores were somewhat isolated from the rest of its operation.
Mr. Livingston said the well-established presence of large chains such as Kroger and Meijer, as well as strong local competition from stores such as The Andersons, made it difficult for Giant Eagle.
“For them to come in after someone else has been there forever, that’s too tough for them. It’s probably a good idea they didn’t do more than two stores,” Mr. Livingston said. “They don’t have as much to lose.”
Bill Bishop, an Illinois analyst who runs Brick Meets Click, said advertising also may have played a role in Giant Eagle’s failure to thrive in Toledo.
“Doing any kind of advertising in a market like Toledo, or any metropolitan market, is an overhead cost that normally has to be spread across multiple stores for it to be an affordable expense,” he said.
The company did not purchase ads or circulars in The Blade.
Mr. Bishop said research still shows that shoppers like having a printed advertisement.
“I think not having printed ads or circulars puts them at a disadvantage for all the folks who like that as a reminder of what’s on special, or a guide on how to prepare their shopping lists or their meals,” he said.
Giant Eagle weekly ads were distributed to certain locations via U.S. mail.
Giant Eagle contacted local officials in Rossford and Sylvania Township on Friday to tell them the stores would close, but did not detail the chain’s reasons for leaving.
Rossford Administrator Ed Ciecka said Giant Eagle’s departure would be noticeable
“Closing of retail stores is nothing out of the ordinary, but Giant Eagle has been one of the main anchors for that Crossroads shopping center,” he said.
Mr. Ciecka said the city hopes to work with the landlord to find a new tenant for the 80,000-square-foot store, but said officials’ first concern is the future of the store’s employees.
He said city officials reached out to the county’s job services to alert it of the closing.
Steve Serchuk, a retail expert with Signature Associates Inc., a Toledo commercial real estate firm, is confident that the stores will not turn into blighted, forgotten properties after Giant Eagle leaves.
“These are, in my opinion, well-located real estate in Sylvania Township and Rossford,” he said.
“They’re in pretty strong retail centers and they both have very well-connected landlords with regional and national retailers. I don’t think they’ll be vacant this time next year,” he said.