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, MississippiAll 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
http://www.policymap.com/.
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 ResourceClick
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.
"The Pie Man" (above), who by all indications looks to be a Fresh & Easy Neighborhood Market shopper and follows the grocer's weekly advertising circular closely, took first place in the pumpkin carve-off contest. It looks like it was a solid (as opposed to custard) team effort.
This Fresh & Easy Neighborhood Market headquarters office employee team transformed its pumpkin into a Fresh & Easy fresh food and grocery store, complete with the green "Now Open" sign above the entrance. We aren't sure who the man in front is - perhaps the store manager? But the three-wheel bicycle heading to the "store" is a version of a real three-wheeler Fresh & Easy uses as part of its "green" retailing marketing and promotion.
Similar to the team above, this employee team used its pumpkins (the only team of the five using more than one) as a canvas on which to etch facsimiles of Fresh & easy grocery stores. But as you can see, this team added some mock fresh&easy private brand products as a way to play up its "Haunted Fresh & Easy" store theme. We're betting there were at least a couple Fresh & Easy Neighborhood Market buyers/merchandisers on this team, hence the product inclusions.
Our first thought when we saw this photograph was that an executive from Tesco's global headquarters in the United Kingdom was paying a visit to Fresh & Easy's corporate office in El Segundo. The suit does have a Savile Row look to it after all. But on second look we determined it's more likely the "Ghost of Halloween and Christmas Past," based on the combination of the white pumpkin for his head and the Santa hat on top. This team was doing some real "out of the gourd" thinking. 
This Fresh & Easy employee team incorporated Fresh & Easy's signature clock logo in its witch-themed design. We wonder if they were shooting for a vote from Tesco director and Fresh & Easy Neighborhood Market CEO Tim Mason, who it's said is a huge fan of the clock logo.
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Last July, Guber and Joe Lacob, a partner at the noted Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, made the winning bid to buy the Golden State Warriors basketball team, agreeing to pay owner Chris Cohan $450 million for the Warriors, which is the only professional basketball team in the San Francisco Bay Area, home to nearly seven million people.
