Existing Stores

Improving Existing Small Stores

• About
• Benefits
• Challenges
• Innovative Strategies and Policy Options

About

Communities without supermarkets generally contain a base of smaller grocery stores, specialty stores, ethnic markets, convenience stores, or corner stores. These are the only available nearby food resource for residents with limited or no access to cars, and they generally do not provide the same selection, quality, and prices of larger grocery stores. They often lack produce and other nutritious foods, offer low quality goods and services, are poorly maintained, and charge high prices.

Improving the product mix at these stores, and addressing other issues of viability such as pricing, food quality and freshness, and customer service, is a strategy to enhance access to healthy food in underserved communities that builds upon existing community resources, and may be more feasible in some communities that face significant challenges to developing large new grocery stores. A number of initiatives in places such as Baltimore, Detroit, Philadelphia, San Francisco, and the White Mountain and San Carlos Apache reservations are working to develop models for creating "healthy small stores" in communities that suffer from a lack of access to affordable and nutritious food.

Benefits

Less complex, less expensive, and requires less time than building a new store. Improving existing stores takes far less time and money, and requires fewer steps, than building a new store in the community.
Merchandise tailored to communities. Smaller stores, particularly those that are independently owned, have more flexibility than large chain supermarkets to tailor their merchandise mix to meet customer preferences. In addition, stores with a long history in the community often have extensive knowledge about the specific tastes and desires of residents.

Small business development. A common local economic development strategy in low-income communities is to nurture and support small businesses and to encourage entrepreneurship among residents. Improving the viability of smaller food stores serves this goal.

Community building. Improving the quality of a small store that has historically been viewed as a community problem--such as a corner store that primarily operates as a liquor store--into a community asset, can build relationships between local merchants and residents and contribute to community revitalization.

Challenges

Matching the low prices, quality, and selection of larger grocery stores. Small merchants face the same costs of conducting business as larger grocery stores but do not have the same scale advantages that can translate into lower prices for customers. They purchase in smaller quantities so they must pay higher wholesale costs, and they face limited competition, which leaves them with less incentive to maintain competitive prices.49 They also have lower merchandise turnover, which can lead to poor quality produce and loss due to spoilage.

Risk of changing product selection. Existing small stores risk losing profits when they alter their product selection. Because shelf space is limited and turnover is slow, merchants stock only the products they are certain will sell and rarely experiment with new items.50 Convenience store owners who are part of a franchise generally have little to no flexibility to change their product mix.51

Customer acceptance and expectations. Smaller stores are not always highly valued by community residents, who see them as inferior to the large supermarkets typical in wealthier communities. When the smaller stores charge more, residents may feel exploited and shop elsewhere. When smaller stores are owned by people that belong to a different ethnic group than the majority of community residents, there can be racial tensions. Small corner stores that operate as de facto liquor stores are often linked with crime and alcohol-related health problems.

Innovative Strategies and Policy Opportunities

Collaborate to reduce costs. Creative collaborations can help smaller stores address the challenges of higher wholesaler costs. Small stores can collaborate to leverage their collective buying power and engage in joint purchasing to get the lowest prices. This type of collaboration has enabled some smaller independents to compete with chain supermarkets. In the 1990s, for example, participation in a grocery store cooperative, Certified Grocers of California, facilitated the rise of independent grocery stores in Los Angeles.52 A potential model for a buying cooperative that could be pursued by food retailers is Ace Hardware stores, which are owned and operated separately, but are united under a brand name, and purchase collaboratively to obtain the lowest prices. 53

Link with local farmers and farmers' markets. Small grocers can cut their costs by purchasing their produce directly from local farmers or farmers who already sell at area farmers' markets. This strategy can also help farmers by adding a new market to supplement their sales.

Reduce the risk for corner stores. Community stakeholders can help convince store owners to stock more healthy food and reduce the risk they face in altering their food selection through a number of strategies. The Good Neighbor campaign of Literacy for Environmental Justice incorporated all of the following strategies:

• Promote healthy stores and healthy eating in the community. Activities such as taste tests and cooking demonstrations that increase resident awareness about healthy eating and food preparation can be conducted inside the stores or in other community locations, such as schools. These activities help increase demand for the new healthy food carried by the store.

• Demonstrate customer demand. Community groups can document the lack of access to healthy food in the community and highlight interest in healthier alternatives. They can disseminate their findings to merchants and the community.

• Provide technical assistance and resources. Often small stores are not used to dealing with perishable goods and need help expanding into this merchandise area. Community groups or interested government agencies can collaborate with local stores to implement fresh food options by subsidizing the purchase of new equipment and initial produce stock while store owners test local demand for the food, and by providing technical assistance concerning how best to purchase, display, and market perishable foods.

Connect stores with small business development resources. Cities usually make available an array of financial and technical assistance resources to small businesses located in underserved communities.54 These resources can be directed to stores that are willing to improve their selection of healthy foods and/or institute new practices to better meet the needs of low-income customers. Retailers could take out low-cost loans to outfit their store to sell produce and buy initial new stock produce. They could take advantage of technical assistance to help them tailor their merchandise to community needs, train employees in how to buy and sell perishable goods, market their new products, and improve their general business planning. To improve the overall quality of corner stores to make them more appealing shopping sites, city agencies and community organizations can conduct outreach to small stores to increase their awareness of existing resources. They can also create small business programs that are specifically tailored to the financial and training needs of neighborhood grocers.

Conduct community outreach. Stores that are shifting their product mix to include healthy food options can engage in intensive promotional activities to ensure that potential customers are aware of their new products and efforts to contribute to community health. This could include promotional flyers, open houses, raffles for produce, and other creative ideas.55 They can also work with community organizations, which have established ties with residents, to notify the community about the improved stores.