A renewed call for ‘government-as-grocer’?
A rather lamentatious newspaper editorial bemoans the fact that none of the proposals for a new grocery store in Pittsburgh’s Hill District are “the right fit.”
“No one is questioning the need for a store, but no one has figured out the right formula to make it work, either,” the editorial states.
Well, given the facts on the ground, everyone should be questioning such a store’s “need.”
And while we know not if the last phrase of that sentence is intended as some kind of code that taxpayer subsidies are needed – yet again — to make a grocery in the Hill “work,” we certainly hope not.
For taxpayers were forced down that road previously. And, predictably, the heavily subsidized, full-service Shop ‘n Save’s struggling five-year run ended in 2019.
This Hill District grocery was a public policy mess from inception to demise. The only way a grocer could be cajoled into opening the first such store in the neighborhood in 30 years back in 2013 was with the financial help of combination of government entities, nonprofits, foundations and taxpayers.
A very telling sign was that the store’s owner only put up about $1 million of his own money, about 1/12th of the total required. If there truly was a profit to be made at the site, the owner alone would have been – or should have been — willing to risk his own money to cover the total start-up costs.
It’s as if the store’s failure was preordained.
Now, while the building’s then-struggling nonprofit owner and others blamed the store operator for allegedly running a less-than-clean facility with stocking issues — and the operator blamed the nonprofit for not living up to the terms of the store’s lease (including maintenance) — the Shop ‘n Save did not generate enough foot traffic to make a profit.
Thus, the editorial’s blanket statement that “The Hill District needs a grocery store” remains suspect.
If the Hill District truly needs a grocery store (full-service or otherwise), the profit-motive would exist for a private operator to put out the shingle, so to speak, using his own wallet and/or business loans of his own securing.
And that without socializing the risk.
But given the closed Shop ‘n Save’s story, it did not. And the fact that a government agency – Pittsburgh’s Urban Redevelopment Authority –once again owns the vacant store site does not bode well for a truly market-based, non-subsidized market to ever exist in the Hill.
Again, the marketplace must dictate the viability of any new grocery store there. Not government agencies. And not wishful newspaper editorials.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (email@example.com).