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Hungry for Supermarkets: Grocery chains leave food deserts barren, AP analysis finds

The side of the Fresh Stop mobile market bus is seen during a stop in Eatonville, Fla.
The side of the Fresh Stop mobile market bus is seen during a stop in Eatonville, Fla. AP

As part of Michelle Obama’s healthy eating initiative, some of the nation’s largest food retailers promised more than four years ago to open or expand 1,500 stores in neighborhoods with no supermarkets by 2016. But an analysis of federal food stamp data by The Associated Press reveals that the nation’s largest chains — not just the handful involved in the first lady’s group — have since built new supermarkets in only a fraction of the neighborhoods where they’re needed most.

The Partnership for a Healthier America, which also promotes good nutrition and exercise in its anti-obesity mission, considers improving access to fresh food a key part of the solution. But the AP’s research demonstrates that major grocers overwhelmingly avoid America’s food deserts instead of trying to turn a profit in high-poverty areas.

Among the AP’s findings:

▪  The nation’s top 75 food retailers opened almost 10,300 stores in new locations from 2011 to the first quarter of 2015, but only 1,530 were in food deserts, or neighborhoods without stores that offer fresh produce and meats. Take away convenience stores and “dollar stores,” which generally don’t sell fresh fruits, vegetables or meat, and barely more than 250 supermarkets opened in such areas in that span.

▪  As the largest supermarket chains have been slow to build in food deserts, the so-called dollar stores have multiplied rapidly. Three chains — Dollar General, Family Dollar and Dollar Tree — made up two-thirds of new stores in food deserts.

The dollar store sector is consolidating, too: Dollar Tree merged with Family Dollar this year, creating the largest dollar-store chain in the nation and in the process, less competition and less incentive to diversify what these stores offer.

“The dollar stores are popping up everywhere in the food deserts, but that doesn’t mean anything if the owners don’t give customers the opportunity for fresh produce,” said Norman Wilson Sr., a food desert activist who is pastor of a Pentecostal church in Orlando, Florida.

▪  Excluding dollar stores and 7-Elevens, just 1.4 million of the 24 million residents of America’s food deserts got a new grocery store in the past four years.

And it’s difficult to say how many more people live in newer food deserts created by recent store closures.

Viola Hill used to walk several times a week to a Schnucks supermarket a block away from her apartment in her struggling north St. Louis neighborhood, until it shuttered last year. Now she can only get to a supermarket once a month, when she pays a friend $10 to drive her to one several miles away.

“I have to get enough food to last me a whole month,” said Hill, a retiree who likes to cook chicken and green beans. “It hurt us really badly when they closed.”

More than 18 million Americans live in communities designated by the U.S. Department of Agriculture as food deserts, or neighborhoods without supermarkets. The USDA considers a neighborhood a food desert if at least a fifth of the residents live in poverty and a third live more than a mile from a supermarket in urban areas, or more than 10 miles in rural areas, where residents are more likely to have cars.

Research has shown that a lack of access to healthy foods contributes to health problems, such as obesity and diabetes. Proximity to a supermarket can make a big difference in what people eat, especially if they don’t drive, although other factors such as food culture also play a role.

Supermarkets often build stores close to each other to compete in an area and highlight each store’s niche, said Ira Goldstein, president of policy solutions at The Reinvestment Fund, a Philadelphia-based community development firm that has invested in grocery store construction in low-income neighborhoods. But the stores typically look for neighborhoods that can support their format rather than changing their format to fit the neighborhood.

“That brings choice and variety to the market but it doesn’t necessarily solve the problem in an inadequately served area,” Goldstein said.

Large supermarket chains’ rigid formats often miss the nuances of a community, said Jeff Brown, CEO of Brown’s Super Stores in the Philadelphia area. Stores that succeed generally have other amenities, such as a pharmacy, doctor’s clinic or a bank embedded in the supermarket, he said.

Bigger chains often are “not selling what they should be selling because they don’t understand,” said Brown, whose company has seven stores in underserved neighborhoods.

Building stores in low-income neighborhoods comes with unique complications, according to the Food Marketing Institute, a Washington-based trade group for food retailers. A large customer base on food stamps creates erratic flows with a rush of business in the beginning of the month when the food stamps are issued, but slow business at the end of the month. Insurance and security can be more costly in neighborhoods perceived to be high crime, and workers from neighborhoods with high unemployment sometimes need extra training for basic job skills.

The average supermarket operates on a 1 percent or 2 percent profit margin and must be sustainable for at least a decade to recoup any profit, so retailers can’t afford to pick unprofitable locations, said David Fikes, vice president of consumer and community affairs for the Food Marketing Institute.

“We would love to have a supermarket in every neighborhood across America, whether if it’s a food desert or not,” Fikes said. “But it’s got to be sustainable for all involved.”

Promises of grocery stores in needy areas mostly unfulfilled

Several major food retail companies pledged to build or renovate more stores in or near food deserts by mid-2016 as part of Michelle Obama’s campaign to reduce childhood obesity. But only Walmart and an independent store that is part of a cooperative have met their goals for the first lady’s group, Partnership for a Healthier America.

The Partnership counted a store as having qualified toward a retailer’s goal if it was in a food desert Census tract or within a mile of one, as defined by the U.S. Department of Agriculture.

“The remaining partners have more time to finish and we'll keep tabs on how they’re doing as they work to complete,” said Partnership spokeswoman Elly Spinweber in an email.

A look at the companies that made pledges, and where they stand, according to the partnership’s most recent progress report:

  • – Wal-Mart Stores Inc.: Pledged to build or renovate up to 300 stores. Built 234 new stores and renovated or expanded another 141 stores.
  • – Brown’s Super Stores Inc., which operates ShopRite supermarkets: Promised to build one new store and expand another. Opened a ShopRite in north Philadelphia in 2013 and remodeled a store just outside Philadelphia in 2011.
  • – SuperValu Inc.: Promised to open 250 supermarkets. Company officials reported they only had opened 104 stores. A SuperValu spokesman didn’t respond to a request for comment from The Associated Press.
  • – Walgreen Co.: Promised to start selling more fruits and vegetables in 1,000 to 2,000 Walgreens stores. The drugstore chain had only done so in 160 stores as of this year. Spokesman Jim Graham said the company is committed to expanding healthy food options and started selling frozen vegetables this year at most of its stores.
  • – The Fresh Grocer: Promised to open five stores. Reported opening one. Spokeswoman Santina Stankevich said changes in the company’s corporate structure altered the timeline for opening new stores in food deserts.
  • – Calhoun Foods: Family-owned Alabama chain promised 10 stores. Did not report any progress to the Partnership campaign this year, and is considered to have dropped out. Company officials did not return emails or phone calls from the AP.

Online: Partnership for a Healthier America progress report: http://progressreports.ahealthieramerica.org/2014

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