My latest post is on Urban Indy. It comes with the local news (WISH-TV) announcement that it has now been five years since Indianapolis grocery store chain Marsh Supermarkets closed all of its 44 remaining locations, having been run by private equity firm Sun Capital for the last 15 years. The chain, a staple of Indiana and eastern Ohio since the 1930s and formerly known as an innovator, stumbled heavily in its last two decades, dropping from about 100 locations (and a few acquisitions/spinoffs) to fewer than 50. While the much-heralded 2014 opening of the downtown Indianapolis Marsh suggested a possible reversal of fortunes, most of us saw the writing on the wall: this company was floundering. The majority of its locations were small, outdated, and run down. The company was so stuck in a rut that, just a few years before it closed, I bought a box of wholesale brand cereal from a Marsh, and the back of the box looked like this:
That’s right. The Internet and How It Works on a product sold in 2015. It should come as no surprise, then, that the WISH-TV article noted how about half of the Marsh locations haven’t found a buyer, or they sit in limbo under new ownership. (At least a few of those instances, the new owner is Kroger. Who has mothballed its own properties.)
Speaking of Kroger, it became the dominant grocery presence in Indianapolis quite some time before Marsh fully closed. But what was its strategy at staying modern? The answer: opening and shuttering locations, often in a surprisingly short period of time. For example, the Kroger close to where I grew up, on the south side of Indy (near the suburb of Greenwood), has had FOUR SITES just north of the Greenwood Park Mall since I was a kid:
Those were just the locations growing up. It found a new one (number four) just a few years ago. If you think Kroger has finally found a place where it’ll stay put, I have a pedestrian bridge in Springfield, Missouri to sell you. In the meantime, it’s worth exploring why this strategy has made Cincinnati-based Kroger not just the dominant grocery store chain not just in the Midwest, but in a good part of the country: it’s the nation’s third largest retailer behind Amazon and Walmart. I covered Fred Meyer, its Pacific Northwest operation, just a few weeks ago. Basically, Kroger has done what Marsh ultimately failed to do: make strategic decisions with its real estate portfolio that align with shifting customer tastes. And these decisions often preclude upgrading an existing structure, living the old Krogers as castaways for other, smaller companies to pick up.
Oh well–at least it’s still a fully functional grocery store. Learn all about the details at Urban Indy, then offer your own commentary wherever you like.
5 thoughts on “Memories of Marsh Supermarkets: Kroger tries (half-heartedly) to fill the void of a once-mighty chain.”
“Marsh Supermarkets closed all of its 44 remaining locations, having been run into the ground by private equity firm Sun Capital”
Fixed it for you. 🙂
Marsh always owned its real estate, and just about the first thing Sun did was a massive sale/leaseback. They took cash out and saddled those smaller stores with big rents.
I think Kroger went the opposite direction: back in the day, I believe they leased space from shopping center owners. Then they realized they could control things better by owning their spaces. So that might account for the constant moves in Greenwood…as leases expired, they moved on. Or sold the property to the owner of the adjacent inline stores, or to a REIT.
Over the past 5-10 years they’ve been building superstores right across the street from existing stores, as at Emerson and County Line. In that case they sold the old store to a local investor. Kroger’s strategy hasn’t been all that different from CVS and Walgreens moving from leased spaces in strips to freestanding corner stores.
Yes, Kroger (the surviving, successful chain) may have prevailed in part because it reoriented its tenure among its portfolio every 10 or so year. Of course, they could only achieve this if they didn’t overcommit themselves to exclusively corporate-owned locations as Marsh apparently did. I really don’t know if Marsh was running on empty until a year or two before the Sun Capital acquisition. After all, as recently as 2005 they were looking to expand to Chicagoland. Was that a hail-Mary effort, and did that venture flop so wholeheartedly that Don Marsh sought a buyer just a year later? It sure seems like his heart wasn’t in it anymore by the mid/late 1990s.
The analogy to Walgreens/CVS seems fitting.
There was a Marsh where I grew up in Troy (as well as Kroger and later a Meijer). Everything always felt outdated there.
Sounds about right. Welcome to the lucrative world of venture capital. When a once-capable executive loses his touch, he sells to Sun Capital and they wring whatever life is left out of the real estate. Then collapse the company. Rinse and repeat.
loses his touch, or directs it elsewhere.