CHICAGO -- Supermarket operators can find a wealth of untapped volume in the inner city, according to the Food Marketing Institute Speaks session at last week's FMI annual convention here.
Michael Sansolo, FMI senior vice president, said lower-income shoppers as a group account for a larger volume base than some more wealthy communities.
According to Sansolo, the average retail demand per square mile in the New York metropolitan area is $53 million, compared with $297 million per square mile in Harlem, a black inner-city neighborhood in upper Manhattan.
"All those people are looking for a supermarket outlet, but is the industry doing enough to reach them?" Sansolo asked rhetorically.
"Lower-income shoppers spend a larger percentage for food than wealthier shoppers, yet they don't always get very much attention," he added.
Citing statistics, he said lower-income shoppers spend 10.8% of their income on food at home, compared with 6% of higher-income shoppers.
"There is little wealth per capita in each apartment in the inner city, but the combined income of all those people is very high. That segment is considerably underserved and ripe for supermarkets to come in," Sansolo said.
Joining Sansolo on the podium, Gregory B. Calhoun, president and chief executive officer of Calhoun Enterprises, Birmingham, Ala., said he agreed that the inner city represents "a golden opportunity" for food retailers. Calhoun operates nine inner-city stores.
"Inner-city consumers are no different from consumers elsewhere," he said. "They want service, clean stores, competitive prices and quality products. They want to see people who look like them working in the store."
As a small operator, his access to capital is limited, Calhoun acknowledged. "Even a single-store owner knows he needs technology to provide the kinds of product and services the customer needs."
But listening to customers will always be important, he added. "Even with all the technology that exists, you must still listen to your customers," he said.
He also said inner-city operators must be creative in their efforts to compete with larger, better-financed retail giants. "My success comes as a result of someone else's failure," he said.
