I hadn't thought about SNAP cuts significantly impacting inner city groceries

 It's always a struggle to have supermarkets, either full line or with a smaller set of items, operating in inner city neighborhoods.  The costs are higher, including employee retention and losses due to stealing and fraud.  

As it is, the average grocery store only makes 1.5% that is a penny and a haf per dollar of sales.  That doesn't leave a lot of room for error, or provide the ability to react when there are scalar changes in economic conditions.

Yellow Banana is a grocery "start up" from a few years back that bought a bunch of Sav A Lot stores--a discount low number of items store operating primarily in low income areas.  Sav A Lot is a chain that has company stores and franchised stores.  

SAL was owned by Supervalu which sold it off to private equity before being acquired by UNFI.  The current owner is trying to sell off the stores, and function as a wholesaler/franchisor.  That's how YB got the stores they operate.

YB has/had seven stores in Chicago.  And they received money from the city to do so.  They had a lot of problems getting going, and the stores have to be operated for 10 years for the company to get the full amount awarded.

In the last year, the company's president died unexpectedly of a stroke, without anyone to replace him, and the "One Big Beautiful Bill" cut funding for the federal Supplementary Nutrition Assistance Program, which provides a modicum of money to poor people to buy food--the amount provided is paltry, it's a crime.  Most people getting benefits get less than $200/month.

Customers shop at Save A Lot’s remodeled West 63rd Street store in West Lawn on April 9, 2025. (Eileen T. Meslar/Chicago Tribune)

According to the Supermarket News article "Yellow Banana ready to close 7 Chicago stores, loses tie with Save A Lot":

SNAP money at the six stores accounted for almost 50% of revenue, and SNAP sales have declined about 27% year over year.

Projections at the start of the year showed the stores were getting close to breaking even but would still lose in the range of $500,000, a figure the source said was not insurmountable. Then the SNAP cuts kicked in.

SAL, which had been providing the company with inventory on credit, pulled the rug and cancelled the franchise agreement.  

The company has been crushed by the loss of SNAP-related sales.

It's not news that the Trump bill has had a lot of negative effects, including one they think is positive, which is reducing the tax rate on rich people and corporations.

Sadly, this is not an unintended consequence.  It was intended.  And this is but one of the many fallouts from the Act.

(There used to be a SAL on Chillum Road in nearby Maryland, and on occasion I would bike there to buy groceries.  It's long since closed although they still have other stores in Prince George's County.  When you're buying shortening, why pay a lot more for it at a mainline grocery when you can get it at a store like SAL or Aldi?)

Also see:

-- "Save A Lot grocery stores could shutter abruptly this week," Chicago Tribune
-- "Save A Lot grocery operator gets an extension on City Hall-funded deal amid missed deadlines, lawsuits," Chicago Sun-Times

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Thoughts.  The margin issue is real.  That, plus lack of management expertise is why government owned groceries aren't likely to be successful.  And the least bit of problem in getting the store up and running and then operating--such as community opposition for any reason--makes it that much harder to succeed.

Recently, a more upscale grocer in Cleveland, Heinen's, closed its downtown store.  They said they lost $18 million over 11 years ("Heinen’s Cleveland location was losing millions," Supermarket News). And they sold alcohol too, which has higher margins.

Grocers in hard pressed areas probably need more subsidy than people realize, considering that 1.5% margin.  I know a cooperative in Connecticut had to close because they foolishly signed a lease requiring a percentage of gross revenue be paid to the property owner, even though $1 of additional revenue yields only 1.5 cents.

One such subsidy, and I'd have been against it before, is probably, "zero property tax" until the store shows a profit.