Four years ago, the city of Chicago announced it would hand out $13.5 million in public dollars to help a private company reopen or renovate six grocery stores on the city’s South and West sides.
The public funds for grocery operator Yellow Banana came as big-box companies shuttered stores on the city’s South and West sides, leaving many residents without access to fresh groceries.
Now the Yellow Banana grocery stores — which operate under the banner of discount grocer Save A Lot — are at risk of closing as soon as Saturday.
Save A Lot recently notified the city that it expects to terminate its license agreement with Yellow Banana at the end of the month, confirmed Peter Strazzabosco of the city’s Department of Planning and Development. Strazzabosco said the issues precipitating the looming closures include SNAP benefit reductions and the recent death of Joe Canfield, who was Yellow Banana’s CEO.
“Yellow Banana, Save A Lot, DPD and other financial partners are discussing opportunities to keep the stores open with potential investors or new suppliers,” Strazzabosco said.
The grocery stores are located in neighborhoods throughout the city’s South and West sides, including in Auburn Gresham, Garfield Park and West Lawn.
In a statement to the Tribune, Save A Lot spokesperson Sarah Griffin confirmed the stores could close Saturday, news first reported by the industry publication Supermarket News.
Griffin cited “dramatic cuts to SNAP benefits which have severely impacted these stores,” noting that the grocery stores have experienced a 26% decline in SNAP sales.
“As a result of this and other financial headwinds, Save A Lot made the difficult decision to end our arrangement with Yellow Banana,” Griffin said. “Yellow Banana is exploring alternatives in order to keep the stores open. If they are unable to find an alternative, the stores will cease operations, effective July 25th.”
Calls to two of Yellow Banana’s co-founders went unreturned Tuesday.
Save A Lot has seven stores in the city of Chicago, all of which are at risk of closure. Six of those stores are part of the original public funding deal and are subject to the terms of a tax increment financing redevelopment agreement with the city, Strazzabosco said. That agreement requires a grocery store to remain open at each location through 2035, he said. The seventh store is located at the site of the former Englewood Whole Foods — an experiment shut down by the upscale grocer nearly four years ago. The Englewood location is subject to its own redevelopment agreement with the city although Yellow Banana is only a tenant there, not the agreement holder, Strazzabosco said. Both agreements contain terms requiring the grocery store sites to be reoccupied with a new operator should they shut down. The first six stores must be reoccupied within a year and the Englewood store must be replaced within 18 months, Strazzabosco said, though the Englewood agreement only requires a store to be open there through the middle of next year. “The city’s priority is for the stores to remain open with a current or new operator,” Strazzabosco said, noting TIF funds had been used to pay for capital improvements at the stores. “If they go dark, the goal is for each building to expediently reopen with a full-service grocer.” But, he said, the city is “exploring every opportunity to recoup taxpayer funding, if necessary.” Yellow Banana’s Chicago undertaking has been beleaguered by dysfunction and delays. The Chicago Sun-Times has reported extensively on financial and legal issues plaguing the company. And Yellow Banana stores were cited by the city last year for overcharging customers and selling expired food, the Sun-Times reported last month. Save A Lot spokesperson Griffin alluded to financial issues in her statement to the Tribune. “Since 2023, Save A Lot has worked alongside its Retail Partner, Yellow Banana, to ensure uninterrupted operations of seven store locations in Chicago,” Griffin said. “When these stores encountered significant financial headwinds under Yellow Banana’s ownership, Save A Lot took on additional operational responsibilities to keep these stores open and maintain continued service to customers.” “We will continue to engage with City and Community leaders to explore ways to provide access to quality food and services for residents, and we are actively supporting impacted Yellow Banana team members throughout the transition,” Griffin said. When the city first announced its deal with Yellow Banana, the company’s founders said they weren’t like the grocery operators that were absconding from the South and West sides. “We are in this business for the long haul. There’s no sunset, there’s no end of fund life where we’ve got to monetize the stores and sell them off to the next owner, none of that,” co-founder Ademola Adewale-Sadik told the Tribune in 2022. “We own these stores, we’re in the city, and we’re there to stay.” Early in his term, Chicago Mayor Brandon Johnson — who was not yet in office when the Yellow Banana saga began — pitched the idea of opening a publicly owned grocery store in Chicago. Supporters of that idea sometimes cite the failures of private grocery companies when arguing that cities should take the more aggressive step of owning a grocery store themselves. Though the idea of publicly owned grocery stores has gained traction in New York City under new Mayor Zohran Mamdani, it hasn’t panned out in Chicago. Last year, after the Tribune reported the city had not applied for a state grant it could’ve used to help open a grocery store, the city said it had changed course and planned to open a city-owned market rather than a full grocery store. As of this February, the city wasn’t prepared to share any more concrete details on what that project might look like, including where the market would be located or when it would open. Mayoral spokesperson Griffin Krueger said Tuesday that the mayor’s office had no update to share on that project. 
