Ultra Foods Closing in Prospect Heights; Is There a Whole Foods Market Coming to the Neighborhood?

Ultra Foods grocery store at 1241 North Rand Road in Prospect Heights near Rand Road and Olive Street is closing after operating a little over two years since its grand opening in January 2014. Frozen foods and dairy products were selling for 50% off Tuesday (One gallon of milk was selling for $1.10). Grocery products were selling for 25% off. Magazines and Frito Lay products and some other products were not discounted. Liquor was offered at varying discounts. The cookie aisle was cleared out. Also much of the higher end frozen pizza and related products were also cleared out by Tuesday afternoon. The store has new hours from 6 a.m. to 9 p.m., and closure is planned on March 1, 2016.

Ultra Foods spent about $13 million to renovate the 87,000-square-foot building in a large unit of a strip mall that formerly was occupied by a Dominick’s and an Omni. The space was empty for several years before Ultra built out the space with bright, bold colors and large grocery aisles with 70’s and 80’s hit music on the overhead speakers.

Ultra had a set of products that were regularly priced lower, such as milk and frozen dinners. Some other basics, such as orange juice were regularly priced higher. The result was one group of people claiming the store had great deals, and another group saying items were overpriced.

Ultra Foods had a sales tax sharing agreement with the City of Prospect Heights to entice the store to open in Prospect Heights. In the agreement, the grocery store was set to receive half of the city’s share of sales tax for 15 years. Prospect Heights and Ultra Foods each expected to bring in $2.9 million over the 15-year period.

Competition is tough at the Palatine Road-Rand Road-Arlington Heights Road triangle, where six stores selling groceries are located nearby. An Aldi Foods, a Jewel-Osco, a Trader Joe’s and a Harvest Fresh are only one minute north of the closed store’s location. A Target store with a grocery department is located just across the Ultra Foods parking lot. Mariano’s Fresh Market is only two miles south of the Ultra Foods location.

The Arlington Heights Joe Caputo & Sons store just 1 1/2 northwest near Rand Road and Palatine Road closed in a former Dominick’s store location after operating less than two years. The store also closed their Elk Grove Village store and their Northbrook store.

A new potential grocer is assessing the Ultra Foods space, which may be reduced to a more manageable size. The potential grocer is possibly a more upscale grocer. Whole Foods immediately comes to mind, but there is no confirmation on what store is considering the former Ultra Foods location. Whole Foods had 431 stores as of September 2015, but Whole Foods headquarters has maintained its view that the United States can support 1,200 Whole Foods stores and even more than that with its new 365 format. Even though sales were weak in 2015, Whole Foods is planning to triple the number of its stores, according to Bloomberg Business. John Mackey, co-founder and co-CEO of Whole Food is quoted in Chain Store Age, saying, “Through our strong balance sheet and robust cash flow, we self-funded our new store development and strategic investments while returning close to $700 million to our shareholders through dividends and share repurchases.”

With Kroger Co buying Mariano’s Fresh Market, it might be time for a faceoff of Whole Foods Market and Kroger/Mariano’s Fresh Market in the neighborhood where Mariano’s built their flagship store. Whole Foods Market — so far not conveniently accessible for Arlington Heights and Prospect Heights residents — could possibly be in a favorable position for negotiation, with space also available at the former Joe Caputo & Sons store and the former Ashley Furniture store location in Arlington Heights. The former Ashley Furniture location is rumored to have the interest of LA Fitness developers, but that could make the former Caputo’s location more enticing to Whole Foods Market with the potential of development of a strong fitness and health shopping center alliance of Dick’s Sporting Goods, LA Fitness, and Whole Foods Market.

See also …

Bloomberg Business Whole Foods Sees Stores Tripling With Embrace of Produce

Chain Store Age Whole Foods’ profit, comps tumble; still on track for expansion

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