By High Country Advocate Staff
BUENA VISTA — As the national grocery chain Kroger Co. pursues a plan to replace its aging City Market store in Buena Vista with a new, larger facility, town officials and residents remain divided over whether the company should receive local tax incentives to build it.
The proposed project, estimated at $30 million, would include a full-service supermarket, drive-through pharmacy, gas station, and upgraded parking lot along U.S. Highway 24. Kroger representatives have said the expansion would improve traffic safety and shopping access for Chaffee County residents.
However, the company also sought a sales-tax sharing agreement to help fund a new traffic signal and related road improvements — a request the Buena Vista Board of Trustees declined earlier this month.
Profit margins cited as justification
In public discussions, Kroger’s supporters described the grocery industry as one with “razor-thin” profit margins. Debra Cameron, executive director of the Chaffee County Economic Development Corporation, told town leaders that the average net profit margin for food retailers is about 1.7 percent, suggesting that corporate projects often depend on community partnerships to bridge construction costs.
While that figure reflects the national grocery average, Kroger is among the largest retail companies in the United States. The company reported $148 billion in revenue and more than $2 billion in profit in fiscal year 2024, with a market value near $70 billion. Analysts note that major chains use their size and distribution control to maintain profitability even in low-margin conditions.
A regional strategy
City Market is Kroger’s only store in Chaffee County and one of several serving Colorado’s central mountain region, including locations in Leadville, Gunnison, and Summit County.
Industry analysts say such investments are typically made at the regional level, where new facilities strengthen the company’s supply chain and market reach, not simply as standalone profit centers.
Even a small-town store can contribute to Kroger’s logistics and brand footprint, capturing tourism and highway traffic along the U.S. 24/285 corridor. The Buena Vista store, originally built decades ago, has been described by shoppers as undersized compared to modern City Markets in comparable mountain towns.
Economic and fiscal impact
Supporters of the project argued that a larger store would create local jobs, expand shopping options, and generate additional sales-tax revenue for Buena Vista.
However, because Kroger has not indicated that construction depends on public incentives, those benefits are expected to occur regardless of any tax rebate. By declining to share sales-tax proceeds, trustees preserved future revenue for other town priorities such as infrastructure, recreation, and public safety — ensuring that residents would receive the economic advantages of the project without subsidizing a national corporation.
A broader debate
The disagreement reflects a growing tension faced by small towns across Colorado: how to encourage private investment from large corporations without shifting costs onto local taxpayers.
While municipalities often partner with developers to fund infrastructure, Buena Vista’s decision highlights an alternative approach — one that welcomes growth but resists direct financial incentives for national brands.
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