Back in 2011, a group of major food retailers promised to open or expand 1,500 grocery and convenience stores in and around neighborhoods where they are needed by 2016. This promise, made as part of Michelle Obama’s healthy eating initiative, has fallen short of expectations.
An analysis of federal food stamp data by The Associated Press (AP) has found that new supermarket locations built by the nation’s largest chains are serving “only a fraction of the neighborhoods where they’re needed most.”
AP reports, “The nation's top 75 food retailers opened almost 10,300 stores in new locations from 2011 to the first quarter of 2015, 2,434 of which were grocery stores. Take away convenience stores and ‘dollar stores,’ which generally don't sell fresh fruits, vegetables or meat, and barely more than 250 of the new supermarkets were in so-called food deserts, or neighborhoods without stores that offer fresh produce and meats.”
A large issue lies with the business model of supermarkets, especially chains. Ira Goldstein, president of policy solutions at The Reinvestment Fund, says “Supermarkets often build stores close to each other to compete in an area and highlight each store's niche. The stores typically look for neighborhoods that can support their format rather than changing their format to fit the neighborhood. That brings choice and variety to the market but it doesn't necessarily solve the problem in an inadequately served area.”
David Fikes, vice president of consumer and community affairs for the Food Marketing Institute, adds, “The average supermarket operates on a 1 or 2 percent profit margin and must be sustainable for at least a decade to recoup any profit, so retailers can't afford to pick unprofitable locations… We would love to have a supermarket in every neighborhood across America, whether if it's a food desert or not. But it's got to be sustainable for all involved.”