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Supermarket shortages have been identified in many American urban neighborhoods, and such gaps in food access have been closely correlated with diet-related diseases such as cancer, obesity, and diabetes. The shortage began when many supermarkets left mixed-income central city neighborhoods after civil disturbances in the late 1960s and 1970s. Studies suggest that 21 of America's largest cities are experiencing an "urban grocery gap" that is characterized by fewer stores and less square footage per store. The poorest neighborhoods typically have about 55% of the grocery square footage of the best-off neighborhoods.
The migration of supermarkets to the suburbs and a lack of transportation contribute to the malnutrition experienced by low-income Americans who live in under-served urban neighborhoods. Healthy foods are also more expensive and less available in poor areas. Simultaneously, there is a lower prevalence of independently owned grocery stores in low-wealth and predominantly Black neighborhoods and a greater proportion of households without access to private transportation in these neighborhoods.
Studies show that cost is the most significant predictor of dietary choices, so healthy eating is especially difficult for the poor, for whom healthier foods are generally unaffordable. Meanwhile, supermarkets generally provide food at cheaper prices than the bodegas and pharmacies that service inner-city areas. A study that compared supermarkets, neighborhood groceries, convenience stores, and health food stores in San Diego, California found that supermarkets had twice the average number of 'heart-healthy' foods compared to neighborhood grocery stores and four times the average number of such foods compared to convenience stores. In many American cities, an urban grocery gap has caused a lack of access to healthy foods, high prices for the healthy foods that are available, and the health problems that result from an unhealthy diet.
Grocery stores typically have only 1-2% profit margins, so the difficulties involved in running an urban supermarket are often seen as too costly in an already-risky business. A combination of other factors make urban neighborhoods seem less-than-ideal for grocery store executives.
Urban stores in low-income neighborhoods generally have less demand for the profitable luxury goods that are more popular in suburban stores. Also, people who shop with food stamps usually buy fewer nonperishable items like toiletries and impulse items, the things that bring stores their highest profits.
Instead, urban stores must stock a variety of lower-volume items geared to multiethnic tastes. Compounding the problem, chain stores are generally unfamiliar with ethnic preferences. Chains tend to develop a formula that works for their core market, which consists of middle-class, white suburbanites.
One obstacle to supermarket growth is that developers tend to overlook the market potential of urban communities. Underserved, urban neighborhoods tend to be composed of populations with lower incomes on average, but the density of an urban environment also means that city neighborhoods tend to have more income per acre than suburban areas. Studies by the Initiative for a Competitive Inner City in Boston found that "nearly 8 million people who live in the nation's poorest urban communities have a combined $85 billion in retail spending power, which is far greater than all of Mexico."
Prejudices have biased marketing research and prevented supermarkets from seeing the potential of urban locations. National marketing firms have provided grocery store executives with statistics derived from flawed modeling techniques. These statistics include erroneous information about population decline, the perpetuation of stereotypes about the people who live in urban communities, and miscalculated income information.
Meanwhile, media portray urban areas as poor and dependent, contributing to supermarket executives' skepticism. In fact, urban areas usually consist overwhelmingly of working households with a substantial share of middle-income people.
A problem in urban and suburban stores alike, shoplifting is 6% to 8% of supermarket revenues. Fear of crime also acts as a big deterrent for investors, but some cities interested in developing new grocery stores have placed police stations near development sites in order to allay developers' fears.
The expense and scarcity of land in urban environments pose some of the greatest problems for supermarket developers. Finding sites for urban development also involves fees, complexity, length, and unpredictability.
Today's suburban supermarket model requires more space than older, urban facilities can accommodate, meaning that urban supermarket development often requires the construction of new facilities. And, while suburban supermarkets are typically 45,000 square feet (4,200 m2), urban supermarkets are only 25,000 square feet (2,300 m2) on average. This means that urban supermarkets can sell significantly fewer products than suburban stores, which contributes to fewer profits.
City and temporal differences
The neighborhood correlates of food insecurity vary across cities and over time. Theoretically speaking, this suggests that neighborhoods with predominantly low income and/or racial minority populations do not necessarily fail to attract food and commerce. This also suggests that factors outside of the neighborhood itself influence food insecurity. A few studies have shown this to be the case: For example, the characteristics of (U.S.) cities have been shown to influence the relationship between neighborhood characteristics and food insecurity. In particular the 'racial threat' dynamics, the region and the economic health of the city in which a low income and/or racial minority neighborhood exists will affect it's likelihood of having a supermarket. Another study (of 9 cities in the U.S.) shows that in 1970 low income areas were not undeserved by supermarkets. However, low income areas became increasingly undeserved up until 1990. From 1990 until the present the pattern of supermarkets under-serving low income areas has remained stable. One can also point to the differences across countries (e.g. see food desert).
A grocery store's 24-hour lighting "does a lot for the sense of safety and community in the neighborhood," because supermarkets can be a safe haven. Citizens feel a "dramatic change in atmosphere," after new supermarkets are built.
In addition, new supermarkets can be used as location of community programs—health exams, nutritional education, eye exams, voter registration, birthdays for children, Western Union wire transfers so immigrants can wire remittances, selling event tickets, having Driver’s License renewal facilities, and providing phones for discount international calls. Besides contributing to a community’s overall well-being, such services make a grocery store more appealing to urban consumers: developing the services that urban citizens desire is a crucial way to make new supermarket development work.
By engaging with local organizations, supermarkets can create a link with a community that will contribute to security, reduction in shrinkage, and provide for better selection and effectiveness of employees. Organizations (such as churches) can help in hiring decisions, and security guards can come from the community. These make security more effective, bring jobs to communities, and make customers brand-loyal. Grocery should also confer with local religious officials about religious diets.
Stores should also keep in mind the shopping habits of urban consumers, who often rely on monies distributed to them at the beginning of each month. Stores may want to "staff to accommodate strong demand in the first two weeks of the month, slack purchases in the last week, and heavier traffic that purchases less per customer in general," according to the shopping habits of urban consumers.
Grocery stores should consider developing diversity departments within supermarket administration to identify minority-owned suppliers and potential employees.
Racial and wealth segregation remain prominent characteristics of US neighborhoods, and studies suggest that predominantly black neighborhoods suffer from a greater lack of access to healthy food.
Of 216 US census tracts studied, the ratio of supermarkets to residents for predominantly white areas is 1:3816 versus 1:23,582 for predominantly black neighborhoods. Only 8% of black Americans lived in a census tract with at least one supermarket; 31% of Whites live in a census tract with at least one supermarket.
Many cities across the US have recognized the urban supermarket gap problem and have developed plans to address the issue of food access.
In April 2003, Pennsylvania passed the nation's first statewide economic development initiative aimed at improving access to markets that sell healthy food in underserved rural and urban communities. The legislation devoted $100 million to agriculture projects, including the development of grocery stores and farmers' markets, and $40 million to support the development of 10 new stores in underserved communities across Pennsylvania.
New York City
Like many other cities in the US, New York City faces a supermarket shortage that is closely linked to health epidemics. At the request of the Mayor’s office, the Department of City Planning studied supermarket need in the city and, in April 2008, found a widespread shortage of supermarkets. This shortage causes a lack of healthy, fair-priced food options for many New Yorkers who live in a food desert. Food access issues are partly responsible for the facts that diabetes now affects over 700,000 people in New York City, over 1.1 million New Yorkers are obese, and another 2 million are overweight.
Health problems are especially prevalent in minority communities, and statistics indicate a racial dimension to the crisis: Supermarkets in Harlem are 30% less common than on the Upper East Side, and while 20% of Upper East Side bodegas carried leafy green vegetables, only 3% of those in Harlem could say the same.
Three million New Yorkers live in neighborhoods with high need for grocery stores and supermarkets. Neighborhoods such as Central and Spanish Harlem and Washington Heights in Manhattan; Bushwick, Bedford Stuyvesant, East New York and Sunset Park in Brooklyn; Corona, Jamaica and Far Rockaway in Queens; areas of the South Bronx, Williamsbridge/Wakefield and portions of Pelham Parkway in the Bronx; and St. George and Stapleton in Staten Island show the greatest need for full-line supermarkets.
In February, 2008, Speaker Christine Quinn of the City Council announced the creation of a Statewide Supermarket Commission that will identify state and local policy solutions to encourage new supermarket development and to prevent supermarkets from closing. The Commission is led by the Food Trust and the Food Bank for New York City, in partnership with the City’s Food Policy Coordinator and the Food Industry Alliance. Simultaneously, the United Food and Commercial Workers Local 1500, which represents grocery store workers, is working to create healthy food options for all New Yorkers through supermarkets, Community-supported agriculture, urban agriculture, and farmers' markets.
Like other states in the country, California faces an obesity epidemic in which obesity rates have doubled during the 1990s. These health disparities in California are being addressed by the California Endowment and its $26 million initiative that aims to increase availability of healthy food options to low-income communities and communities of color.
Chicago's Retail Chicago Program is outreach program for retailers, brokers, and developers to introduce them to the many community retail development opportunities in Chicago and expedite their entry into these new markets by serving as a "One Stop Shop" to assist them during their site selection process.
Besides causing a lack of access to healthy foods, the urban supermarket gap also means that inner city neighborhoods lack the jobs and tax revenues that grocery stores provide.
Where supermarket developers have neglected some urban neighborhoods, city governments and non-profits can work together to market the potential of inner city areas to grocery store executives.
Since land is difficult for supermarkets to acquire, cities may survey commercially zoned land to create a database of suitable land parcels. Such a database may be used in an informational guide to provide to grocery store executives; Chicago’s planning department provided just such an information guide to executives at a grocers’ expo in 2005.
Cities should also keep in mind that it is more cost-effective for government, rather than for developers, to assemble land. The city and state can use their condemnation powers to assemble and acquire land; and policy-makers should remember that the state can increase supermarket attraction by offering 3-5 site packages instead of 1 site. Helping a supermarket to open more than one location can make the construction project seem more feasible, as it will help the chain shake up regional oligarchies and make short-term expenses seem more worthwhile. Leases developed with help from the city may also come without an "out" option in order to ensure the grocery’s presence.
Such "packages" of three to five sites should include subsidies and streamlined approval. City planning departments should train staff members and make them conversant in retail. City workers within project approval departments should become conversant in retail, and the city can create programs in which "account managers" shepherd grocery store projects through the approval process.
Market leaders have chosen to close urban stores, even if they are showing a profit, to focus on the most productive stores in the suburbs. But "operators in second and third place in a metro area may seek to expand their core clientele outside the highly contested, white suburbs to other areas and groups, such as the mixed-income neighborhoods and ethnic clients in the central city." Baltimore initially attracted "low-level" chains and "now, upscale, full-service stores wants to locate in areas they had previous ignored."
Executives’ fears of security costs may be easily abated: Rochester clinched the deal with a Tops supermarket by offering to locate a police station at the development site. And the practice of hiring locals as security guards does a lot to decrease security issues and losses to shrinkage. And, where grocery store development is arduous, programs can help corner stores expand.
Efficient Consumer Response (ECR) technology also offers a means for stores to better track their inventories.
Despite the widespread efforts to address supermarket shortages and food deserts, not all researchers are convinced that such areas are common. At least one medical review and a later government report have suggested that food deserts are relatively rare. Nevertheless, their purported existence continues to drive significant public health expenditures.
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- Retail Chicago Program