Yellow Banana’s deal to renovate stores in Chicago is going to ‘fail spectacularly’

Save A Lot is not fulfilling its end of a deal with the City of Chicago, and one market expert is saying officials need to cut bait and move on.

Yellow Banana received $13.5 million in subsidies from the city to rehab and open six Save A Lot stores in 24 months, many located in food deserts. In all, including tax increment financing, loans, and federal grants, more than $26 million was put in front of the developers.

According to local media affiliate WBEZ, none of the locations are open as Yellow Banana reaches the halfway mark of the deal. Projects have started, but there have been excessive delays filling the construction timeline.

The capital investments were used to acquire the underlying real estate at five of Yellow Banana’s existing Chicago stores and an Auburn Gresham site. Yellow Banana was supposed to complete a comprehensive internal and external redevelopment at each location, including new flooring, lighting, equipment, HVAC, dairy and meat cases, interior and exterior paint, décor, fixtures, and signage.

Brittain Ladd, a supply chain and strategy consultant, told Supermarket News that Yellow Banana was never qualified to take on such an endeavor.

“I understand the desire on the part of companies to want to do things that they think will change the outcome of their company, but you have to have a level of skill, and you have to have the right leadership,” Ladd said. “So when I heard that they had been granted $26 million to open up these six stores, my initial reaction was, ‘This is going to fail, and I think it’s going to fail spectacularly because there’s just no history of this company ever being able to do something like this in the past.”

Related:Dallas Save A Lot owners allegedly left buildings, workers in terrible shape

Yellow Banana fell into a hornet’s nest right from the start. The company was getting ready to open an Englewood store in January 2023 but was met with protestors who were angry about Whole Foods vacating the site.

The opening of the Save A Lot on West 63^rd and Halsted was then put on pause for months as Yellow Banana, including CEO Joe Canfield, tried to work with residents and community leaders. A town hall meeting was held on May 3, 2023, to address the concerns.

“We kept reaching out, we kept asking for involvement,” remarked Canfield in Supermarket News’ “Off the Shelf” podcast, which aired in May 2023. “We did not get a lot of engagement from groups, and we had to keep pressing forward because, at some point, you’ve got to get the store open. You’re paying the electric bill, and you got expenses, and you’re bringing inventory in, and you have got to sell that inventory.

Related:Another Save A Lot store is in trouble

“So we’re really trying to look forward and not look backward, and we are hopeful that we can get there pretty quick.”

However, quick has not come into play as store openings continue to be pushed back due to delays.

A Save A Lot in the Auburn Gresham area was initially expected to open in July 2023, but a delay moved the power-on date to April 2024. Today, it’s still under construction.

The issues appear to be construction-related. Yellow Banana wanted to renovate the Auburn Gresham location first, but an unexpected subsurface condition that required additional geotechnical work and other investigations created additional months’ worth of redevelopment.

Despite the extra work, officials said the floors were done in January and it was only a matter of a few months before the store would welcome shoppers.

A Save A Lot in the West Pullman neighborhood at 10700 S. Halsted Street was supposed to reopen on May 1, 2024, but still remains closed.

Furthermore, Yellow Banana has also faced scrutiny over health code violations at some of the Chicago locations.

“I personally would be amazed if any of the stores are open and if they are, I think we are talking about maybe one,” said Ladd. “I really struggle to see how this has a happy ending to it at all.”

Ladd questions why the City of Chicago needs to mess with an outside company when there are unions who could do the work or partnerships with wholesalers that could be established to help run the grocery stores.

“What’s needed is Chicago to say, ‘Let’s step back and let’s do things differently and let us take ownership of this,’” said Ladd.

“My advice to Chicago is get the legal teams involved, get the lawyers involved, and end this charade that’s being put on by Yellow Banana, and let’s find a better strategy for those people who need this the most.”

So why did the city decide to go with a company like Yellow Banana?

“Nobody else wanted it,” said Ladd. “Yellow Banana, to their credit, said, ‘Yes, we’ll do it,’ but they didn’t have the right team or the right experience.” 

Yellow Banana has not responded to a request for comment in time for publication.