Jewel is undertaking its most aggressive new store expansion in the Chicagoland market in years, according to Crain's Chicago Business.
The chain, owned by Supervalu, is looking to build at least 12 new stores over the next 18 months. Currently, it operates 175 stores in the market and holds a 41 percent share of the local grocer business.
"For Supervalu to be investing money like this in Chicago so soon after the acquisition demonstrates their confidence in Jewel and its position in the marketplace," said George Redfearn, vice president of development at Tucker Development Corp.
Neil Stern, a senior partner at McMillan/Doolittle, said the new stores are needed. "Albertsons (the former owner of Jewel) was always capital-constrained. They seemed to be fighting fires someplace else and starving Jewel in Chicago. Now, Jewel is being fed for the first time in a long while by a parent company not afraid to invest money."
Jewel is looking to push its advantage over Dominick's and better position itself against the likes of Wal-Mart.
Many of the planned stores are in areas where Wal-Mart has yet to establish a presence. The thinking is Jewel will beat Wal-Mart to the customers in areas such as New Lenox, Elburn and Sugar Grove.
"No question, Wal-Mart will have an impact on Jewel," said Bill Bishop, president of Willard Bishop Consulting. "Wal-Mart has demonstrated a willingness to go into surprisingly small communities."
Discussion Questions: What are Jewel's current strengths and what will it need to do if it is to continue outperforming the competition in the areas it serves? What is the biggest threat to Jewel's continued leadership in the Chicagoland market?