Market Place Family Foods posted a sign on the door Thursday morning saying the store is temporarily closed and in transition. The future of the building is up in the air.
Marco Rennie, who operated the Family Foods store in La Grande, said Thursday that Troy Berglund, the owner of the La Grande store and of Mt. Joseph Family Foods in Joseph, will likely file for bankruptcy.
“There’s no equity or ownership (to the store) now,” Rennie said.
The goal is for the store to remain closed for only three months. This allows a group of people, including Rennie, developer Al Adelsberger and Union County Chamber Executive Director Bob Kavanaugh, to secure a new owner and find a wholesaler to fill the shelves of the grocery store.
Thursday, the Family Foods staff in both Joseph and La Grande were laid off.
Kavanaugh said about 10 employees lost their jobs at the La Grande location. WorkSource Oregon, the state’s public workforce system, was called in to help the former employees. The organization has an emergency response team that attended the announcement of the closure.
“They helped them all with the unemployment applications (and) resumes, and will help with future employment,” Kavanaugh said. “Within 90 days, we would like to bring those guys back if we can get this to work. They worked their hearts out.”
Rennie said they’ll reach out to Community Connection’s food bank to take the perishable food still in the store so it doesn’t go to waste.
Market Place Family Foods opened with high hopes in October 2016, but the store wasn’t able to gain enough momentum to succeed. Rennie said the problem comes down to difficulties Berglund had with the store’s wholesaler.
Berglund came to the Market Place project with the success of Mt. Joseph Family Foods behind him. He invested his entire life savings into the two stores, Rennie said.
“He owned the Mt. Joseph Family Foods store for 12 years,” said Rennie, speaking for Berglund who was not at the store at the time of the interview.
“The location (in Joseph) had failed two previous times before he came in,” he said. “He built a business that made four times what it had been making.”
According to Rennie, Berglund came to La Grande looking to expand the distribution of the smoked products he had created in Joseph. When the opportunity to open a second grocery store presented itself, “He was encouraged by people in the community to pursue that,” Rennie said.
Berglund paid $8,000 for a feasibility study through Western Family, his wholesaler at the time, to see whether a grocery store would be successful. The study estimated the store in La Grande would generate $3.5 million per year.
“He made the decision to pursue the store based off the study,” Rennie said.
Berglund filled the shelves with products the wholesaler recommended.
“Within a week, people were saying the store wasn’t what they expected it to be,” Rennie said. “People had very specific expectations for the store, and those weren’t met.”
See complete story in Friday's Observer