Retailers Commit to Open Stores in Food Deserts

ELLIOT ZWIEBACH

WASHINGTON — Several retailers committed last week to open or expand 1,500 stores in underserved communities across the U.S. and to make affordable, healthier food options more accessible.

Those commitments — contained in memorandums of understanding from Wal-Mart Stores, Supervalu and Walgreen Co. — were announced by First Lady Michelle Obama as part of her Partnership for a Healthier America initiative aimed at eliminating food deserts in the U.S. within seven years.

“We can give people all of the information in the world about healthy eating, but if parents can't buy the food they need to prepare those meals — if their only options for groceries are in the corner gas station or the local mini-mart — then all of that is just talk,” Obama said.

She also announced the formation of the California FreshWorks Fund, a $200 million public-private partnership designed to encourage California operators to offer healthy food options and to operate in underserved communities there. Fund spokesmen said it hopes to see close to 100 stores opened in underserved communities during the next five years.

During Obama's press conference, Wal-Mart said it will open between 275 and 300 stores in food deserts by 2016; Supervalu said it will build 250 Save-A-Lot stores in underserved areas over the next five years; and Walgreen said it will expand food offerings to include more fresh fruits and vegetables and other healthy options at approximately 1,000 stores following tests in Chicago and San Francisco — an increase from its commitment in January to 300 to 500 locations.

Leslie Dach, executive vice president, corporate affairs, for Bentonville, Ark.-based Wal-Mart, said, “No community should lack something so basic, so fundamental to human well-being, as access to food. By opening stores where customers need them most, Wal-Mart will help build healthier families and stronger communities.”

Craig Herkert, president and chief executive officer of Supervalu, Minneapolis, said, “We applaud the work the First Lady and the Partnership for a Healthier America are doing to raise awareness and address the issue of childhood obesity, and we are honored to be a part of the solution.”

Executives from several regional supermarkets also appeared with Obama last week and promised as a group to build or expand more than 10 stores in underserved areas in Alabama, Maryland, Pennsylvania and Tennessee. Those retailers included Gregory Calhoun, Calhoun Foods, Montgomery, Ala.; Jeff Brown, Brown's Super Stores, Belmawr, N.J.; and Marshall Klein, Klein's Supermarket, Philadelphia.

“The lack of access to healthy food is a problem in both urban and rural communities,” said Peter J. Larkin, president and chief executive officer of the National Grocers Association. “Healthy food financing initiatives are a unique opportunity to improve access to healthy foods, grow much-needed jobs and spur economic development at a time when the need is so great. It is the independent grocer that is leading the way to expanding access.”

On the West Coast, the California FreshWorks Fund is slated to receive initial seed money totaling $30 million in debt capital and $3 million in grant dollars from The California Endowment — a private health foundation — in conjunction with a collection of 21 banks, philanthropic groups, community agencies, health agencies and industry representatives.

Industry members working with the fund include the California Grocers Association and Unified Grocers, a Los Angeles-based member-owned cooperative.

Al Plamann, chief executive officer of Unified, said it will take many years to provide all California consumers with easy access to healthy, affordable foods, “[but] FreshWorks is positioned to make significant progress in partnership with strong independent grocers, who are by nature entrepreneurial and opportunistic and who, as a group, have always been willing to open neighborhood-oriented grocery stores in underserved communities that have been passed over by the large chains.”

The California FreshWorks Fund — which is based on the Pennsylvania Fresh Food Financing Initiative — pledged to provide a combination of loans or grants to grocers and distributors to help overcome the high cost of entering food deserts.

The effort will apply not just to supermarkets but also to farmers' markets, mobile trucks and other options.

Besides requiring operators to devote “a substantial percentage of floor space” to perishables and non-prepared foods, projects must also meet other guidelines.