Fewer Grocery Stores Opening in Food Deserts

Grocers like Walmart have slowed openings because locations aren't profitable

After much talk about food deserts recently, a new look into grocery stores opening in food deserts — where residents have to walk more than a mile to buy fresh food — reveals that growth is stagnating.

Bloomberg investigated and found that of the 1,000 grocery stores promised to open in urban neighborhoods, only a fraction have opened. Walmart has opened 23 stores this year, after promising 300 stores in food deserts by 2016. Supervalu has also slowed opening its stores because of declining sales and lower financing for licenses.

The problem, said Nelson Lichtenstein of the Center for the Study of Work, Labor and Democracy at University of California Santa Barbara to Bloomberg, is that locations in food deserts aren't as profitable as those in suburban areas — therefore forcing the choice between high profits or underserved residents. He said shoppers in urban areas "don’t fill up a basket and spend $100, they buy $10." And while grocery store growth is stagnant at $495 million, chains like Walmart and Supervalu are re-evaluating their urban market strategies.

One chain that's alerady reinventing its food desert strategy: Walgreens. The company is now on track to convert nearly 1,000 urban locations into "food oasis" stores by rearranging stores to carry more food products.