Exploring the desert

Urban America has become, by many accounts, a vast, underserved market with great potential for grocery operators. The lack of supermarkets in low-income areas of many cities is frequently cited as one of the links between poverty and obesity: When there are no stores selling healthful food, people eat the junk that’s available.

The reasons these so-called food deserts exist are many and include the middle-class flight to suburbia that began a couple of generations ago, high crime rates, traffic and the difficulty of dealing with city bureaucracies.

Because most of the people in the food deserts lack suburban spending power, they haven’t gotten much attention from business or government until recently. Now there is a growing consensus that this is a societal problem that should be addressed. Pennsylvania has a program in place that leverages state money into low-cost loans to operators who will build supermarkets in underserved areas. New Jersey and New York City are both developing programs with similar goals.

This change in attitude presents supermarket operators with an opportunity to expand into areas where there is no serious competition and polish their public image at the same time. Urban retailing isn’t for everyone, but with store saturation in most suburbs it may be a good bet for those who are willing to do the work.

State grocers associations should be talking with city and state lawmakers about the possibilities of financial and other assistance for their members who are willing to take the plunge. Granted, this is a terrible time to get money out of any government except the federal one, but by the time a program can be solidified things may be looser.

Not every government agency functions smoothly, so a key piece of the puzzle should be a high-level official in an ombudsman role who can make sure the entire process stays on track, starting with the earliest contact between the operator and the city, continuing through construction and lasting after the store opens. This person should have direct access to the mayor or the governor. Store developers need not be exempted from planning, zoning, environmental and other requirements, but they do deserve timely responses and rational treatment when they’re trying to help the government meet its own goal of providing better food to disadvantaged city dwellers.

If crime is a concern, the local police precinct should work with the operator and the ombudsman to come up with a plan to protect the store, its employees and its customers. If the cops on the beat give the store manager the choice of paying them off or seeing their delivery drivers victimized by a ticket blitz, the ombudsman should be able to work with the district attorney to nip such corruption in the bud.

While the costs and frustrations of urban supermarketing are greater than you’re likely to find in the suburbs, the lack of competition has the potential to return significantly higher sales per square foot right from the start.

And a supermarket can be a big boost to a neighborhood’s potential for gentrification, which in turn raises the average income level of the customer base.

Besides, there’s a lot to be said for helping people lead healthier lives. 

Tom Weir can be reached at tom@taweir.cnc.net.

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