Many studies have documented the lack of supermarkets in poor communities and communities of color compared to wealthier, white communities:
Not only are grocery stores scarce in many of these communities, but local residents typically lack transportation options to easily get to stores located in other parts of town. Low-income, African American, and Latino households have less access to private vehicles than higher income and white households.6 Without access to private vehicles, residents of low-income communities often need to arrange rides with friends or relatives, piece together multiple bus routes, or pay for taxi rides to do their grocery shopping. This makes shopping for groceries costly, or inconvenient, unreliable, and time-consuming. For example, residents of low-income communities in the San Francisco Bay Area who rely on public buses to travel to a grocery store spend about an hour commuting to and from the store.7 The average resident in affluent communities in the area can reach more than three supermarkets by car within 10 minutes round-trip.8
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Between shopping trips to supermarkets, the lack of nearby stores and limited transportation options lead low-income residents to shop at small stores located closer to their homes. These small stores, though more convenient, generally offer fewer healthy foods, are poorly maintained, and charge higher prices. The smaller grocery stores, convenience stores, and grocery/gas combinations commonly patronized by poor inner city and rural residents charge prices that are about 10 percent higher than those found at large chain supermarkets.10 Prices at the corner stores that dot inner city neighborhoods, for example, can be as much as 49 percent higher than those of supermarkets, for a limited selection of canned and processed foods and very little, if any, fresh meat and produce.11
Studies have shown that access to local places to purchase healthy food can improve eating behaviors:
In addition to the effects on individual eating behaviors, successful healthy food retailers contribute to the broader economic health of the community. Grocery stores, along with other types of retail and services like banks, pharmacies, and restaurants, are essential components of livable and well-functioning communities.
Low-income residents often live in distressed, high-poverty communities that have experienced years of population and job loss, and physical and economic decline. New grocery store developments can help revitalize these communities, contributing to economic development. In addition to creating jobs for local residents, new stores create local shopping opportunities that can capture dollars being spent outside of the community. One study estimated that residents of inner city communities across the United States spend $85 million per year at stores located outside their community.15
New retailers also recycle money in the local economy. As purchasers of goods and services, the retailers spend money at existing local businesses, which leads to the creation of new jobs, which leads to more money for people to spend at local businesses. This cycle also generates more local sales tax revenue. While all retail outlets can have this effect, new large grocery stores and supermarkets that locate in disinvested communities often also serve as high volume “anchors” that generate increased foot traffic, and they tend to draw other retail stores that sell complementary goods and services.16
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Discriminatory public and private policies have left people of color isolated from economic opportunity and services. Beginning in the 1930s, the federal government helped subsidize homeownership by insuring low-interest private bank loans for home mortgages.18 The government developed an appraisal method that categorized and mapped city neighborhoods based on their “desirability” for lending. African American and low-income neighborhoods—outlined in red on the maps—were considered the least desirable. This practice of discriminating against neighborhoods on the basis of race became known as “redlining.” Communities of color were systematically denied loans until the practice was outlawed in 1970. The maps became self-fulfilling prophesies that hastened neighborhood decline and disinvestment.
These trends of neighborhood decline happened as the white middle class population left urban centers in droves for homes in the suburbs in the 1960s and 1970s. Supermarkets, along with many other businesses, fled inner city locations and opened new stores in the suburbs, taking with them jobs and tax revenues in addition to their selection of healthy food. For example, in Rochester, New York, from 1970 to 1995, the number of supermarkets declined from 42 to 8.19 Cut off from opportunity and investment, inner city neighborhoods declined precipitously, becoming increasingly isolated and racially segregated. The only food retailers left in the neighborhood were small independent groceries that charged high prices and offered minimal variety, or corner stores selling a limited selection of processed foods.20
Once they left the city, supermarkets adapted their operations to fit their new suburban locations. Suburbs contained abundant, inexpensive sites for development, and their residents had high rates of car ownership that enabled them to drive to stores located farther from their homes. As a result, retailers adopted bigger store formats with large parking lots. Because the movement to the suburbs was largely restricted to whites, and because suburbs were fairly homogenous with respect to income, communities had relatively similar product preferences. Large chain retailers developed business models that they applied across all the stores in their chain.21 To stock their stores at the lowest prices, they developed long-term contracts with large suppliers who offered price breaks in exchange for chain retailers’ vast purchasing power. A new business model emerged with across-the-board changes in industry practices starting with development decisions and extending through product selection and marketing.
A number of recent studies demonstrate how the marketing analyses influencing retailers’ location decisions systematically undervalue inner city neighborhoods.22 Some have referred to these modern business practices as “retail redlining” —the shunning of minority communities by retailers.
Researchers have highlighted a number of problems with the data and market analyses of private marketing firms and the ways they are used by grocery store decision makers. These firms use national data sources which tend to undercount inner city residents, especially minorities. Alternative market studies that use local data sources often find that population and purchasing power in low-income communities of color is significantly higher than figures given by traditional market analyses. A study of two Washington, DC, neighborhoods by Social Compact, for example, found that Census figures underestimated the population of the Columbia Heights-Petworth neighborhood by as much as 55 percent, and of the Anacostia-Hillcrest neighborhood by as much as 13 percent. 23 Another problem is that retailers often look at average household income rather than at total area income, which would more accurately capture the density and therefore purchasing power of urban neighborhoods.
Private marketing firms’ characterization of low-income communities of color is also problematic. These firms use demographic and consumer spending data to categorize communities into pre-established “neighborhood types” ranked by investment potential. These neighborhood types with short names like “Difficult Times” draw on racial and class-based stereotypes. For example, one firm characterizes the residents of northside African American neighborhoods in Milwaukee as “very low income families [who] buy video games, dine at fast food chicken restaurants, use non-prescription cough syrup, and use laundries and laundromats.” The same company describes the residents of the suburban, white North Shore community as “interested in civic activities, volunteer work, contributions, and travel.”24 These descriptions are extremely subjective and are not accurate portrayals of the business potential of low-income communities of color. They can steer business decision makers away from locating in these communities, even when there are actually significant opportunities in these underserved areas.
Academics and business organizations have begun recognizing the competitive advantage of inner cities—density of purchasing power, limited competition, and available labor force.25 Some supermarkets, faced with saturated suburban markets and competition from mass discounters such as Wal-Mart, have been able to move beyond assumptions about race and spending power to see potential opportunities in low-income communities of color.
Striking success is possible for stores that move into underserved, low-income communities. For example, Pathmark and Super Stop & Shop—two leading grocery store chains in the Northeast—have found that their highest grossing stores are in low-income communities.26 In addition to the potential profits to be made, supermarkets benefit by locating in low-income communities of color because these store locations can help the entire chain understand how to better meet the needs of the increasingly racially and ethnically diverse suburbs. 27
It is possible to achieve win-win solutions for businesses and communities—a double bottom line of financial return and community benefit. With a realistic evaluation of their potential for success in underserved communities—driven by accurate data and not clouded by racial stereotypes and assumptions—food retailers can identify and take advantage of opportunities in untapped markets. At the same time, increased food retailing options in underserved neighborhoods often translate to health and economic development benefits for residents and their communities.
These success stories are too few and far between. Some low-income communities have won improved access to healthy food, but many more still face a significant “grocery gap.” The promising food access models described in this tool provide important lessons for those who seek to improve resident and community health through access to healthy food. They point to new strategies and policy interventions that can lead to win-win solutions for food retailers and communities.
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