ST. LOUIS -- While major food retailers have vowed to open or expand stores in and around neighborhoods with no supermarkets, that hasn’t happened, according to an Associated Press report.
An AP analysis of federal food stamp data said that promise has been realized in only a fraction of the neighborhoods where the stores are needed. The news agency’s research demonstrates that major grocers overwhelmingly avoid America’s food deserts instead of trying to turn a profit in high-poverty areas.
The nation’s top 75 food retailers opened almost 10,300 stores in new locations from 2011 to the first quarter of 2015, 2,434 of which were grocery stores. Take away convenience stores and dollar stores, which generally don’t sell fresh fruits, vegetables or meat, and barely more than 250 of the new supermarkets were in so-called food deserts, or neighborhoods without stores that offer fresh produce and meats.
As the largest supermarket chains have been slow to build in food deserts, dollar stores have multiplied rapidly. Three chains, such as Dollar General, Family Dollar and Dollar Tree, made up two-thirds of new stores in food deserts.
“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,” Norman Wilson Sr., a food desert activist who is pastor of a Pentecostal church in Orlando, Fla., told AP.
Just 1.4 million of the more than 18 million people the U.S. Department of Agriculture (USDA) said lived in food deserts as of 2010 got a new supermarket in the past four years.
Also, it’s difficult to say how many more people live in newer food deserts created by recent store closures.
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, AP said.
Supermarkets often build stores close to each other to compete in an area and highlight each store’s niche, 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, told the news agency. 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, Jeff Brown, CEO of Brown’s Super Stores, told AP. 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 (FMI), 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% or 2% profit margin and must be sustainable for at least a decade to recoup any profit, so retailers can’t afford to pick unprofitable locations, David Fikes, vice president of consumer and community affairs for FMI, told AP.
“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.”
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