Planting Grocery Stores in Food Deserts

Reason.com’s June 13, 2016 post “Five Years and $500 Million Later, USDA Admits That ‘Food Deserts’ Don’t Matter” draws from a recent report on USDA program to address claims that people in poor neighborhoods lack access to healthy food choices.

“Since 2011, the Federal Government has spent almost $500 million to improve food store access in neighborhoods lacking large, well-stocked grocery stores,” according to the U.S. Department of Agriculture (USDA). “States and local governments have also launched programs to attract supermarkets or improve existing stores in underserved areas. For example, the Pennsylvania Fresh Food Initiative has provided $30 million of public funds (matched with $117 million of private investment) to help address limited store access in underserved urban and rural areas throughout Pennsylvania.” 

Turns out that most poor people have or have access to cars and drive to supermarkets for better selection and prices. Once there though, many or most choose less than healthy foods (not enough fruits and veggies).

Using data from several national food studies, the USDA determined that both low- and higher-income households tend to shop at supermarkets. Overall, 90 percent of households in a 2012-2013 study shopped for groceries at “a supermarket or supercenter.” The figure was nearly identical for households that participate in USDA’s Supplemental Nutrition Assistance Program (SNAP)—what used to be known as food stamps—or the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), and for households deemed as “food-insecure.”  

Whole Foods Market sees opportunity and is developing smaller stores for poorer neighborhoods (“Why Whole Foods is moving into one of the poorest neighborhoods in Chicago,” Washington Post, November 14, 2014).

 But last year, to the disbelief of many, the company announced plans to open a store in 2016 here, in one of Chicago’s most economically depressed neighborhoods.

When the city held a ceremonial groundbreaking a few months ago, Walter Robb, Whole Foods’ co-chief executive, showed up in Englewood and vowed that it would be “one of the most meaningful things we’ve done as a company.”

 Another report, “Whole Foods has big dreams for new smaller stores,” Statesman, February 27, 2016, notes:

So far, Whole Foods says, it has signed 13 leases for sites for its 365 stores, with at least 10 of those expected to open by October of 2017. Most of the first stores are going into suburbs of larger cities such as Los Angeles. Six will be in California, the company said.

Whole Foods may lose money on their 365 initiative to bring better food choices to underserved neighborhoods, but managers will have strong incentives to discover the groceries and services customers in poorer neighborhoods want to purchase. And unlike the USDA, if they do lose money, it won’t be taxpayers’ money.