Independents Seen as Better Food Desert Operators

MICHAEL GARRY

ANAHEIM, Calif. — Are small independent food retailers more suited to tackling the problem of food deserts — low-income communities that lack convenient access to fresh food stores — than large chains?

Brahm Ahmadi, chief executive officer of People's Community Market, West Oakland, Calif., thinks so. “The larger the chain, the harder it is to be flexible at the single-store level in low-income neighborhoods,” he said during a session on food deserts at Natural Products Expo West at the Anaheim Convention Center this month. “Low-income neighborhoods are extremely diverse in their cultural frameworks and the kinds of foods they like. So part of the challenge is redesigning store models to be adaptive at the local levels. We've seen independent, smaller retailers do that better than the chains.”

Ahmadi is the co-founder and former executive director of People's Grocery, a nonprofit based in Oakland, Calif., that addresses the food deserts issue. His current project, the People's Community Market, is an effort to establish a supermarket catering to the needs of the West Oakland community; it is currently in the development and funding phase, as detailed at www.peoplescommunitymarket.com.

While some supermarket chains have successfully opened and operated stores in low-income urban communities — such as Pathmark in the Harlem section of New York — more recent success stories have come from independent operators. A notable example is Jeff Brown, president and CEO, Brown's Super Stores, Westville, N.J., a ShopRite banner, whose success in inner-city Philadelphia has attracted national attention.

Larger chains, said Ahmadi, tend to take a top-down uniform approach that supports scale and expansion. That makes them less able to deal with such inner-city challenges as workforce turnover and theft that are most effectively addressed at the local level. “We find that chains are hit hardest by high rates of employee turnover and theft — they accept it as a cost of doing business,” he said. “They are not able to focus on relationship-building at the local level.” Retailers need to develop local relationships, he added, “so that the neighborhood is looking out on your behalf and employees are much more invested.” Brown is known to have accomplished that in Philadelphia.

Ahmadi also contended that small-store footprints work better in food deserts. Low-income shoppers tend to have smaller basket sizes and more frequent trips. As a result, large stores would have “a lot of peripheral inventory that would not move effectively,” he said.

Moreover, smaller stores “create a more dynamic and intimate environment where you're able to interact with customers,” he said. “If your goal is intervention in the health and well-being of shoppers, in a large supermarket it's hard for them to feel connected to employees.”

A GATHERING PLACE

Ahmadi plans to make the People's Community Market in West Oakland a “high-level service center” with cultural services in addition to fresh foods, as well as a “positive social place to gather.” He acknowledged that this kind of store, which puts the customer's well-being and employee relations at the forefront, “takes money off the bottom line” and is harder to find investors to support.

On the other hand, a great deal of grocery revenue is going unclaimed in food desert communities. In 2009, Ahmadi said, U.S. food deserts represented $132 billion in potential food shopping expenditures, $80 billion of which was not captured.

According to Ahmadi, the market size of low-income areas is the same as that of upscale neighborhoods. As an example he compared West Oakland with Rockridge, Calif., an affluent area three miles away — both spend $60 million annually on groceries; while Rockridge has three times the income, West Oakland has three times the population.

Ahmadi defined a food desert as an urban community more than one mile — or a rural community more than five miles — from a fresh food source. In urban areas, the problem is exacerbated by residents not owning their own vehicles and being reliant on public transportation. In West Oakland, 43% of households do not own a vehicle. He cited a Food Trust study showing that food desert residents spend 20% of their food budget on transportation, often taxis to carry grocery purchases home.

He also pointed out the nutritional deficiencies of residents in food deserts. In West Oakland, 48% of residents are obese or overweight from eating unhealthy foods at local bodegas and liquor stores, and diabetes is ubiquitous. He called food deserts “ground zero” for the national obesity issue and diabetes.

Ahmadi cited Centers for Disease Control data projecting that by 2020 half of U.S. citizens will have diabetes. Food deserts, he suggested, could hold the key to solving these national health problems. “If we can overcome the economic, cultural and social challenges that exist in low-income neighborhoods, we can take that model out to other communities so it becomes the solution for everyone,” he said.