The Grocery Gap

Posted by Sheila Redick on April 10, 2006

Supermarkets are slowly returning to the inner city as governments remove roadblocks to building them, according to an article in this month's Governing  magazine.  That's the good news.   The bad news is that "for every inner city that is gaining supermarkets, another seems to be losing them."   Why?   Retailers will say that operating costs for running a city supermarket are higher with, for example, added security costs.  But research doesn't support that idea.  In fact, according to a study by the USDA, the operating costs of suburban supermarkets and inner city supermarkets are virtualy identical.   It's true that inner-city shoppers were paying a premium for milk and lettuce, but not because it is more expensive to run a store in the city.  It's because their shopping choices were limited, and they were relegated to more-expensive-to-run mom and pop stores and convenience stores. "What's become increasingly clear... is that the problems of running an urban supermarket aren't a result of things going wrong after the store opens.  The issue is the myriad of obstacles that stand in the way of getting the store built."

To break down these barriers, one legislator, Dwight Evans of Pennslvania, pushed the Fresh Food Financing Initiative, a bill providing $20 billion over two years to help make some headway against the grocery gap in Philadelphia.  Evans took that $20 billion and leveraged it for a commitment of $60 billion over a longer period of time from the Reinvestment Fund, a joint public-private partnership in the Philadelphia area.  The idea was to help store-owners deal with pre-opening costs and problems.   After two years, there are 11 urban supermarket projects underway in Philadelphia.

Read more about it here.