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Shopping Centers Today -> December 2005
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BEARING FRUIT
A program to improve inner-city nutrition attracts a supermarket to a Philadelphia neighborhood
By Sascha Brodsky
Fresh food can be hard to find in the inner city. Like other retailers, grocers may tend to avoid urban areas because of a perception of high crime, lack of space and similar problems, observers say.
But a year-old program to bring supermarkets into Pennsylvania’s inner cities is bearing fruit. The state-government-funded Fresh Food Financing Initiative is using a $250,000 grant to entice The Fresh Grocer, a five-unit local chain, to open a 46,000-square-foot store in one such area next October, in Progress Plaza, in the center of Philadelphia. There has not been a supermarket in that primarily black neighborhood for several years.
“It’s a challenge, but we like a challenge,” said Pat Burns, president of Fresh Grocer. “And the grant will help.”
It is hard in inner-city areas to find enough trained employees, to install sufficient security in high-crime neighborhoods or to find large enough buildings, he says. The funding will go toward training programs and the hiring of security guards.
Fresh Grocer opened its first store in inner-city Philadelphia six years ago and says it plans to open more through grant programs. The company has three other stores in Philadelphia, though in more affluent areas, and the fifth is in Upper Darby, Pa.
Another city that has similarly tried to lure grocery stores is Rochester, N.Y. In 1970, there were 42 supermarkets in Rochester for 242,000 residents. But by 1995 the city’s population had fallen to 232,000, and there were only eight supermarkets. Residents had to travel out to the suburbs to buy groceries, incurring transportation costs on top of the inconveniences of travel and time. City officials brought in the Tops chain by agreeing to contribute public funds.
“I think that we as a company can help these neighborhoods become beautiful again,” Burns said. “We think that there is a way to improve the lives of people in inner-city neighborhoods and also make a profit. The two don’t have to be mutually exclusive.”
The decision to open the new store was driven by its location and traffic, says Burns. “We look for a lot of houses,” he said. “We felt Philadelphia was a good area — it fits our needs, and we fit the neighborhood’s needs.” Expanded meat, seafood and ethnic foods sections will reflect the community’s racial diversity, he says.
Hannah Burton, a senior associate at the Philadelphia-based Food Trust, which advocates for better nutrition, says such programs as the Fresh Food Financing Initiative can play an important part in improving the overall health of inner-city residents simply by providing them with more fruits and vegetables. A Food Trust survey found disproportionately high rates of diabetes, heart disease and cancer in lower-income neighborhoods, conditions that have been connected to diets deficient in fruits and vegetables.
A 1995 study by the University of Connecticut’s Food Marketing Policy Center found there were 30 percent fewer supermarkets in low-income neighborhoods and that these consumers are less likely to own cars, further limiting their choice of food sources.
Prices tend to be higher at urban supermarkets, too, even as the stores tend to be smaller. A 1993 U.S. Department of Agriculture study of eastern Pennsylvania found that the average full-service supermarket offered 19 kinds of fruit, 29 types of vegetables and 18 varieties of meat, while the average small store carried only six kinds of fruit, five kinds of vegetables and two choices of meat. The study also found that the foods in these smaller stores were often lower in quality.
Among people earning less than $15,000 a year, only one in four eats the recommended five or more daily servings of fruits and vegetables, according to the California Department of Health Services. (Nearly half of the blacks in California eat just two servings per day or fewer.)
Consolidation in the supermarket industry has also contributed to the dearth of these stores in the inner city, says Burton.
“Stores have gotten larger, so that it can make it challenging for cities to assemble adequate land for a big supermarket,” she said. “It’s easier to develop in suburban areas, where there is lots of space.” That is to say nothing of the comparative expense of building in urban areas, given that city taxes and construction costs tend to be higher, she says.
“Supermarkets find it harder to meet the needs of urban populations because the rich and poor tend to live in close proximity and so they need to have a diverse selection of products,” Burton said.
A study by Kameshwari Pothukuchi, a professor of geography at Wayne State University, Detroit, published last month in Development Quarterly, says grocery initiatives like the one in Pennsylvania are rare. “Successful initiatives are characterized by political leadership, competent public agency participation, and, often, partnerships with nonprofit agencies,” he wrote.
But there are a variety of ways supermarket chains can serve inner-city customers. They can improve their profit margins along with the health levels of the communities they serve by offering shoppers free transportation in the form of shuttle services, says a report by Diana Cassady, assistant professor of epidemiology and preventive medicine at the University of California at Davis, Center for Advanced Studies in Nutrition and Social Marketing.
Revenue from customers brought in by shuttle could be as much as $1.5 million per year, according to Cassady. (That assumes that 20 percent of the households without cars in each study area would use the shuttle once a week to buy $25 in groceries.)
But inner-city grocery stores often operate on a razor-thin profit margin, making such shuttle services impractical, says David Livingston, managing partner at DJL Research, a Pewaukee, Wis.-based supermarket consulting firm. “Having a shuttle service would force grocers to raise prices even more,” Livingston said.
In Pennsylvania the Fresh Food Initiative has already handed out a total of $8 million to four grocery store chains and plans to give to six more, says Donald Hinkley-Brown, president of The Reinvestment Fund, which administers the program.
Supermarkets can apply to the Food Trust (www.thefoodtrust.org) for grants of up to $25,000 to cover the costs of opening in a low-income urban neighborhood.
The program has gotten about four dozen applicants so far, says Hinkley-Brown.
“We are hoping this will be a model for programs all around the country,” Hinkley-Brown said. “We desperately need to bring the kind of variety and low prices of food available in the suburbs to the inner city.”
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