Thursday, October 21, 2010

Brookings Institution Takes In-Depth Look At 'Food Desert' Supermarket Access in 10 U.S. Metro Regions, Including California, Nevada and Arizona

The above video, "Getting to Market," features an overview analysis of the Brookings Institute's new "food desert" supermarket access study.

Fresh & Easy Buzz has written extensively about the topic of "food desserts" over the last three years, particularly (but far from exclusively) as the issue relates to the Western U.S., where Tesco's Fresh & Easy Neighborhood Market and its competitors operate fresh food and grocery stores. There are currently 168 Fresh & Easy stores in California, Nevada and Arizona. The grocer is closing 13 stores, which it says will be done by November 2, 2010. That will bring the total to 155 units. [See: 13 Closing Fresh & Easy Stores List.]

A "food desert" is defined as a low-income neighborhood - mostly urban inner-city but can also be rural - that is underserved by grocery stores that offer a decent selection of fresh foods and groceries at reasonable prices. Its residents lack sufficient access to grocery stores and must travel a distance to shop.

The "food desert" issue is a multi-facted one. First, it's a personal or individual issue. Residents who live in neighborhoods without adequate access to stores offering fresh foods and groceries tend to shop at mini-marts and convenience stores, buying and consuming less healthy foods, which leads to health problems, like obesity, diabeties, high blood pressure and other lifestyle-related problems.

Additionally, not having grocery stores offering fresh foods and groceries in the neighborhood is an economic issue for residents. Having to travel outside the neighborhood to shop means spending money on transportation, be it for gasoline for the car or for public transit. The economics can also play out in added costs for medical care and prescription drugs because of a reliance on less nutritious foods. High blood pressure and type 2 diabetis are often prevented by eating a healthy diet and getting exercise, for example. But once people get the diseases they tend to take perscription drugs to treat them for a lifetime.

The "food desert" phenomenon is also a social and public policy issue. In addition to the individual health and wellness problems residents in neighborhoods underserved by grocery stores face, there are negative social and economic implications for society at large as well. For example, because residents of neighborhoods underserved by grocery stores offering healthy foods often eat a much less nutritious diet, they tend to have more health-related problems than those living in neighborhoods well-served by such stores. Since most of the residents are low-income, they often lack health insurance and instead must seek public health care, which is paid for by taxpayers.

Prevention through access to fresh and nutritious foods goes a long way to not only making people healthier but also towards reducing the burden on hospital emergency rooms and other government-funded clinics, assuming of course people take advantage of the availability and practice a healthier lifestyle, which is something people from all economic segments of the U.S. population struggle to do. All these factors tax local and state government budgets, thereby creating a social and economic issue for even those residents that live in non "food dessert" areas.

But "food deserts" also present an economic opportunity for grocers and other food and grocery retailing format operators such as mass merchandisers (Walmart, Target) and convenience and drug store retailers wanting to offer fresh foods in the stores. For example, Walgreens is testing fresh foods, including produce, in some Chicago and New York stores. CVS Pharmacy is doing the same in about 40 stores in New York and New England.

Many food and grocery have been discovering this fact over the last couple years and have started to open stores in these urban food desert neighborhoods, after avoiding what are mostly low-income and inner-city areas since the flight to the suburbs movement took force in America a few decades ago. Wal Mart's recent deal with the City of Chicago to open up to 24 stores of various formats and sizes over a period of years includes a focus on stores in underserved neighborhoods on the south side, for example.

In addition, a number of states and cities have started initiates, many modeled after the Pennsylvania Fresh Food Financing Initiative, designed to lure grocers to these underserved neighborhoods. For example, the City of Los Angeles recently approved a multi-million dollar "food desert" initiative. Tesco's Fresh & Easy store in low-income south Los Angeles, which was opened in February of this year without any financial assistance from the city, is doing very well for the grocer.

The Washington D.C.-based Brookings Institute's Metropolitan Policy Program, in partnership with The Reinvestment Fund (TRF), which is a community development financial institution and research organization based in Philadelphia, has just released a major study of "food desserts," focusing on ten major U.S. metropolitan regions. The regions are:

>Los Angeles, California
>Phoenix, Arizona
>Las Vegas, Nevada
>San Francisco, California
>Atlanta, Georgia
>Little Rock, Arkansas
>Baltimore, Maryland
>Cleveland, Ohio
>Louisville, Kentucky
>Jackson, Mississippi

All of the metro regions listed above are live links. If you click on the name of the region, you'll get Brookings' analysis of the particular region in terms of which areas have the lowest-levels of access to grocery stores that offering a decent selection of fresh food and groceries at reasonable prices, along with some additional variables and analysis.

Brookings is a well known research center and think tank based in the nation's capital. It operates numerous programs in the areas of domestic and foreign policy. It's

TRF played a lead role in designing and implementing the Pennsylvania Fresh Food Financing Initiative, a program that provides grants and low-cost capital to facilitate the location of new supermarkets and fresh food retailers in that state’s underserved communities. That initiative is now the model for several other state and local programs, as well as the inspiration for a major new federal budget initiative that seeks to improve community health and economic development outcomes through supermarket attraction and expansion.

Brookings and TRF have also created an interactive map/data base [see it here] that can be used to analyze and pinpoint specific aspects of the underserved areas in the 10 metropolitan regions studied, which include the metro California, Arizona and Nevada regions listed above.

Unlike a lot of previous research that attempted to identify "food deserts," Brookings/TRF’s analysis looks at factors beyond distance to a supermarket that matter for access, including a community’s population density and level of car ownership. And it uses household income and expenditure data to help pinpoint the communities that have a significant untapped local demand for supermarkets.

This new and detailed information should be extremely helpful to retailers in considering locating food and grocery markets in these underserved regions.

For example, Tesco's Fresh & Easy Neighbrohood, which operates 168 stores in Southern California and the Bakersfield and Fresno metro regions in California's Central Valley, along with 34 stores in metropolitan Phoenix, Arizona and 27 stores in metro Las Vegas, Nevada, has opened a handful of those stores in low-income "food dessert" neighborhoods, such as its stores in south Los Angeles, Compton and a few others places.

[Note: we've seen and continue from time-to-time to see publications putting out stories saying Tesco's Fresh & Easy Neighborhood Market either has a "food dessert-focused" strategy or that it has been opening numerous stores in underserved neighborhoods. That's not the case. Less than 5% of the 168 Fresh & Easy stores are in areas that qualify as "food desserts." In fact, in our research we've only been able to identify three-four Fresh & Easy stores that are in areas that can be defined as "food deserts." The grocer currently has two-three new stores in development, including one in San Francisco, that are in urban neighborhoods underserved by grocery stores.]

"Across the 10 metro areas [Brookings] studied, about 1.7 million people (5 percent of total population) live in low- and moderate-income communities that are significantly underserved by supermarkets. African Americans, children, and very low-income families are over-represented in these areas," according to Alan Berube, a senior fellow and the research director of Brookings' Metropolitan Policy Program.

"Greater Los Angeles alone accounts for half a million of the underserved; and in the Cleveland metro region, more than one in nine residents lives in a low-supermarket-access community. Estimates suggest that upwards of $2.6 billion annually in grocery expenditures may 'leak' out of these communities due to a lack of nearby supermarkets," Berube says data from the study show.

That $2.6 billion annual figure, along with the respective figures for each of the 10 regions, is and important one for retailers. It means there's a sales opportunity gap of $2.6 billion in these 10 U.S. metropolitan regions alone that's being lost by the food and grocery industry in general and specific grocers in particular.

A number of grocers, including Kroger Co. and others (including independents), as well as Tesco's Fresh & Easy, have been opening a few stores in "food desserts" in California, Arizona and Nevada over the last few years, and are considering building and opening more. The Brookings research and the TRF food store access map should provide a useful tool for grocers and others, including municipal governments, in helping to determine the particular neighborhoods in the 10 regions studied that offer the most opportunity, combined with other research and data, of course. You can also access the data for the 10 metro regions studied using the PolicyMap’s feature, which offers 10,000 data indicators and full functionality. It's at

For those interested in additional U.S. metropolitan regions TRF has a nationwide analysis of low-supermarket-access communities at its website here. There's additional information on the "food dessert" issue at the website.

There's clearly loads of opportunity for grocers in "food dessert" neighborhoods, if done right. For example, Tesco has yet to open a Fresh & Easy store in downtown Los Angeles, which although now has a Kroger-owned Ralphs Fresh Fare supermarket which is doing extremely well, still needs and has room for additional markets. This is a real missed opportunity for Tesco's Fresh & Easy, in our analysis.

In the San Francisco Bay Area, the Fresh & Easy store in the Bayview district at Third Street and Carrol Avenue, which is one of the first batch of 11 stores set to open in early 2011, is in a "food dessert" neighborhood. Kroger has one of its Foods Co discount supermarkets not far away but it's the only full-service supermarket in the vast Bayview neighborhood. The fresh & Easy will be the second.

None of the other 20-plus Fresh & Easy Neighborhood Market store locations so far in the Bay Area are located in "food desert" neighborhoods, according to our analysis, although the 32nd and Clement site in San Francisco's Outer Richmond district, also one of the first batch of Fresh & Easy stores Tesco plans to open in early 2011, is in a neighborhood underserved by grocery stores, but its not low-income. [See our Northern California Fresh & Easy Store List.]

The "food dessert" issue is increasingly becoming a front burner topic among elected officials, government policy-makers and non-profit national, community and neighborhood groups. First Lady Michelle Obama's "Let's Move," nutrition initiative has also shined a spotlight on the issue, since increasing access to grocery stores in "food dessert" neighborhoods is a major element of the program.

There's significant opportunity in numerous American inner-city regions, where residents are lacking access to fresh food and groceries at decent prices (and in rural regions as well), for grocers that can operate the right food and grocery retailing format using the right formula.

Additionally, with more and more cities like Los Angeles and others now offering various economic incentives to grocers if they will open stores in the "food desert" neighborhoods, the incentives to enter these neighborhoods and open stores can be extremely favorable for retailers.

Readers Resource

Click here and here to read a selection of past stories in Fresh & Easy Buzz on the "food dessert" and access to fresh food and groceries topic and issue.

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