Bill Would Plant Supermarkets in Food Deserts

I am sure this is a well intended bill, however, let's talk reality. Many low income areas have been underserved by retailers for many years. The reasons almost always revolve around profitability. Crime is an issue with shrink at huge levels, the percentage of perimeter items sold compared to the average supermarket is low because fresh is typically more costly than processed and perimeter is more profitable. Years of poor eating habits are not easily changed particularly when cost is an issue. Reliable labor can be an issue in areas where crime is high. Making loans available does not solve these underlying issues.

J. Peter Deeb, Partner, Deeb MacDonald & Associates, L.L.C.

Having lived in center city areas for a good deal of my life my first reaction is to ask, "What took them so long?"

Like I said, that's the first reaction.

There are several issues here.

First, in Detroit at least--and I suspect other urban areas with troubled inner city conditions--it is hard to find stores that offer fresh, healthy food at any price let alone affordable prices. True, there is a great farmer's market in downtown Detroit but you have to have a car to get there unless you like the idea of wrestling a week's worth of groceries on ever less and less reliable buses.

Second, there's no question that residents of areas that fall in the "food desert" category often suffer from poor nutrition and related health issues such as obesity and diabetes.

The real question is, should the government go into the retail business? One could say that after financial services and the automotive industry officials in Washington may--like Alexander the Great--weep because they have no more worlds to conquer. But, seriously, does anybody think the federal government is ready to take on food retailing?

And, even if it did, would the presence of these "bureamarkets" change eating habits and therefore change health outcomes?

Not to mention the small problem of what happens when The Fed goes into direct competition with private enterprise?

Seems like the money might be better spent improving school meal programs; launching nutritional educational campaigns that make sense to the target audience; and stimulating urban gardening at a neighborhood level.

Ryan Mathews, Founder, ceo, Black Monk Consulting

In theory I love this plan. Being a native Detroiter, our city struggles with the relocation of folks back into downtown and great city areas: there are just no grocery stores! So I hope it works and I hope Detroit can participate in opening some truly wonderful grocery stores.

My reality check is about shopper and worker safety. Once a store is funded and open, what can we do to keep it safe? I'd love to see the financing bill include a strong incentive to support new stores' needs for the level of security required to keep the business thriving.

Anne Howe, Founder, Anne Howe Associates

From a purely economic standpoint, it makes perfect sense. If it's not profitable to serve an area, then businesses aren't going to be there. But then the people there don't have access to healthy foods, and it becomes a cost to society to take on the burden of their health care. So government has to step in to cover a gap in the market. I like that the approach is to subsidize business, rather than government store co-ops or something, but I have to say, after 4 episodes of Jamie Oliver's Food Revolution as an example, is the issue with healthy eating an issue of availability or of education?

In other words, why have businesses found it unprofitable to serve these locations? Is it purely economical? Or is it because their customer base is not choosing healthier foods to begin with? If the 'unhealthiest town in America' (the town featured in Jamie Oliver's show) is any example, the reason why people tend not to choose healthier foods is because they don't realize the cumulative impact of their poor food choices, even when the evidence is staring back at them in the mirror. Will these subsidies address this kind of education gap? They don't seem to. "If you build it, they will come" tends to only really work in the movies....

Nikki Baird, Managing Partner, RSR Research

This just sounds like political grandstanding. Retailers avoid these areas for good reason. I doubt anything will come of it. This will only annoy large chains as they must deal with the constant badgering from local activists. If the people in these areas wanted a supermarket they would have shopped at the ones they had. But they didn't and the stores closed. Most likely the latest bills will make it even harder to open a store because once you get the government involved, the layers of bureaucracy get thicker. My prediction is nothing meaningful happens.

David Livingston, Principal, DJL Research

There are so many obstacles to the successful implementation of this bill that I can hardly be an advocate. At the same time it would be fantastic to see the goals met. This is a case where creative planning is required to insure distribution, fair pricing and a full range of product availability.

I've read research studies that illustrate how oftentimes parents of obese children do not recognize that their children are obese. Their kids look like everyone else. So why would we expect these same parents to opt for the healthy food alternative?

Raising awareness and demonstrating the advantages of an alternative menu would probably be more beneficial in the long run than investing in retail stores that will probably have to disband because of all the reasons stated in the other comments above. So how does that awareness begin?

Someone suggested more education in the school cafeteria. That's not a bad place to begin. And perhaps there is an opportunity to add dinners for the family in the same cafeteria, again demonstrating what healthy looks like and tastes like. Use the dinner occasion to educate and demonstrate how healthier buying behavior will be helpful. Have retailers offer products for the families to buy and take home. Will something like this cost more or less than the bill? I think the budget for cafeteria dinners can be contained and the long-run effect will be more in line with the goals of the bill.

The school buildings exist. The employees stand ready for more hours, and more staff could be hired. I'm sure the retailers would be happy to tout their wares. And success stories among the families where children and parents see the benefits of healthier eating will be shared as encouragement.

I can dream; can't I?

Joan Treistman, President, The Treistman Group LLC

There are numerous reasons why Food Deserts exist and the government works on both sides of the street in creating and maintaining that issue. The Federal government has no retail expertise and it has few sustainable success stories to support its involvement. This is just another idea that makes the public skeptical about Washington's grasp.

Gene Hoffman, President/CEO, Corporate Strategies International

Like Ryan, my first thought was, why not?

To those who say nay, I would ask--is the fact that people have been deprived and underserved for a long time and past attempts have been failures, sufficient reason to give up and never try again? Should earthquakes, tsunamis and other natural disasters, be considered good reason not to rebuild? Is it an oxymoron to believe that shareholders, employees and consumers cannot all benefit simultaneously? Should future chances of personal responsibility be disregarded because of past performance? Is it not possible for today's reality to be improved upon? Must there always be a single answer to a problem rather than multiple, cooperative, responses?

Having thought it through and read all the negative comments so far, though, I am weary and much more inclined to think, why bother?

Bernice Hurst, Contributing Editor, RetailWire

Supermarket operators like Kroger thought that their answer to SuperCenters was to build huge food market palaces like Giant Eagle Market District and Wegmans. These mega shrines to all things food take lots of space, space that is a premium in urban and first ring suburban areas.

My hometown outside of Pittsburgh used to have four major supermarkets. Of course three closed and a small operator, Foodland remained. That was ok, but in 2004, my elderly mom and 6000 other people were about to lose that store as well. So they stormed the borough council meetings, and just wouldn't give up. Through federal funding, the store was saved.

Fast forward five years, now the State of Pennsylvania has funded a brand new state-of-the-art green-certified Aldi Food Market in the community. It recently celebrated its first year of operation with much success and fanfare.

Taking the surrounding area, this Aldi serves a five mile, 20,000 fresh-food-starved customer base. Both stores and an additional two supermarkets within the five mile base, up and over the next set of Western Pennsylvania hills, serves the area.

A program to water these food deserts with a supermarket within walking distance of thousands of people, is welcome progress indeed. In these tough economic times, it is quite rare to see new supermarket construction.

I disagree that these people abandoned their supermarkets. Quite the contrary, these supermarket operators abandoned them. To correct the level of the playing field, this particular kind of government funding is the only way to entice supermarket operators like Aldi and Great A&P back into these neighborhoods.

'weo'

I have noticed that many lower tier supermarkets that do serve the lower income markets have a tendency not to carry healthy choices. For example, one of the largest supermarkets that caters to mid and lower tier families doesn't bother to carry the "crisp and healthy breaded fish sticks." But they sure do carry all the fattening, fried, and unhealthy stuff. And that's just one of many examples.

David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates

You have to honestly look at where these 'food deserts' are. Low income, high crime, no parking, low land values etc. That's the exact opposite of what real estate scouts are looking for when researching communities. And I totally agree with the fast food explanation. Easy to set up, nothing to shoplift and provides cheap food for the demographics for the area. It is sad but true.

Living in San Diego, there was a time where you couldn't find anything in National City or Chula Vista. Things are different now but brand name retailers stayed out of those areas for those very reasons, high crime and low income. I think retailers won't be so quick to scoop up those grants and as for lobbying, every retailer is different and should be allowed to open where their market exists.

Doron Levy, President, TheMortgageMachine.ca

Low income areas have been underserved by supermarkets for many reasons. However, in the absence of supermarkets many independent business people have opened small stores to try and fill this gap. As there shelf space is restricted they are forced to stock product that their clientele will buy. If this inventory is short on nutritionally loaded foods, then it is the fault of the people shopping in the store.

These two well-meaning politicians are proposing to throw public money--which we don't have--at building supermarkets in blighted areas. The supermarkets won't survive long term, but will serve the purpose of putting the independents out of business. After a short period the grocers will leave and then the community will be left worse off than it was to begin with. Why won't the [politicians] ever do anything to reward the entrepreneurs who have already put their money and sweat into serving a community? Use funding to provide an incentive for the current merchants to stock and price items that are missing from the community. Let's support the little guy for once!

Ed Dennis, president, Dennis Enterprises

I can't speak for other cities but as far as "maintaining" the food deserts within the Chicago city limits, the unions are front and center. Walmart, which has struggled for years to get building permits and obtain zoning in the inner city have been thwarted by powerful forces despite the pleas of churches and community members who clearly see Walmart's presence in those communities as a potential provider of convenient and better food choices (and jobs).

I can only assume that the unions will happily be in line to build and provide manpower to the "grant" facilities, however, if the Gillibrand plan goes through.

'Liatt'

Having operated stores in these areas (albeit c-stores and not supermarkets) I can readily attest to the difficult operating conditions they present. Like most retailers, we sold what the customers asked for and not what we thought they should buy. This may have not been the healthiest of foods.

I am not sure that offering products people cannot afford (and may not want) will result is changes in consumption habits. Like the concept but seriously doubt the practicality.

Steve Montgomery, President, b2b Solutions, LLC

This is a good idea that is clearly needed. Government assistance in managing some type of food market in inner cities is critical to managing a better choice of foods for low-income people who cannot get to a retailer because of location. There are no fresh food markets in many inner cities, and this level of placement assisted by government is the first step in better managing these "food deserts."

Kai Clarke, President, Miraclebeam Products, Inc.