We’ve had a couple of projects of late where clients have asked us to determine if their district has enough unmet demand to support a new supermarket. Though the client’s reasons may vary from case to case, more often that not it stems from concerns with food access–typically in lower income and minority communities. We’ve likely all heard the term “food desert” used before and understand its basic premise. Perhaps we’ve heard the USDA definition: a low income census tract where 33 percent of the population resides more than one mile from a supermarket . But a comprehensive understanding of food deserts also acknowledges other variables like cost of transportation, rates of car ownership, and the price of groceries. It’s also important to make the distinction between food deserts and food swamps–areas that have an abundance of convenience stores, fast food and junk food, but lack healthy choices. The purpose of this post is not to dispute the criteria used to understand food deserts (or swamps for that matter), but to think more critically about how district managers might respond to issues of food access and how they might start to engage in dialogue with prospective grocery retailers. What follows is a sequence of steps in service of that purpose:
1. Conduct a leakage analysis
Prospective grocery operators look at a lot of different site selection criteria, but at the top of the list is going to be how much unmet demand they can capture within a set trade area. As a district manager, this is obvious and its the same whether your talking about supermarkets or Starbucks.
By their definition, food deserts are likely going to show some unmet demand simply because they lack a supply of existing grocery options. What is at issue is if that demand, which is based on the discretionary income of the community, is going to be sufficient to attract a retailer (which explains why lower income communities are more predisposed to food-desert status).
The Food Marketing Institute calculated average annual sales per square foot (PSF) of selling area for supermarkets at roughly $620 in 2016 . So what would a prospective grocery store retailer need to see in unmet demand to be convinced to build, say, a 10,000 SF store? The equation would be as follows:
How about a shuttle service to an existing store? This is more a question of capacity. Who provides the shuttle? Are there local supermarkets that might consider subsidizing such a service, either as a means of generating revenue or as a long term break even position in order to improve their brand image? Might they be more amenable if a public or nonprofit partner complemented the effort with programming initiatives like guided shopping tours and healthy cooking demonstrations? These are all initiatives that we’ve seen done in service of better connectivity to existing supermarkets.
- Location: Central Ward, Newark, NJ
- Est 1990
- Size: 55,000 SF
- Grocery Anchor: Pathmark
- Inline stores: Dunkin Donuts, Mail Boxes Etc, NC Print & Copy Shop, Grocery Delivery, Pizza Hut, Taco Bell, Magic Fountain, Nathan’s
- Background: Conceived by the New Community Corporation as a catalyst for economic development in the predominantly low-income and African American Central Ward neighborhood. The development was a joint venture project between both the nonprofit and Pathmark corporation
- Location: South Cottage Grove, Chicago
- Est 2013
- Size: 55,000 SF of ground floor retail + 96 rental mixed-income housing units
- Grocery Anchor: Walmart Neighborhood Market (41,000 SF)
- Inline stores: Associated Bank, Burger King, Subway, Fadi’s Hair Salon, Uncle Remus Chicken
- Background: A mixed-use project by The Community Builders nonprofit housing developers, conceived to revitalize Chicago’s South Cottage Grove Avenue and 47th Street commercial corridors
- Location: Bedford Stuyvesant, Brooklyn
- Est 1972
- Size: 300,000 SF
- Grocery Anchor: Super Foodtown (25,000 SF)
- Inline stores/uses: Applebee’s Bar & Grill, post office, banks (x3), extension campus of the College of new Rochelle, Billie Holiday Theatre, Skylight Gallery, Youth Arts Academy
- Background: A former abandoned milk bottling plant, the Plaza is owned and managed by the Bedford Stuyvesant Restoration Corporation (CDC). The CDC was able to acquire the plant as part of Senator Robert F. Kennedy’s actions seeking to create a national model for community development