How Grocery Stores Are Failing Us – Kelly Martin

How Grocery Stores Are Failing Us

How Grocery Stores Are Failing Us

How Grocery Stores Are Failing Us

You might have heard the term “food desert” before: It describes an area where there’s little to no access to markets or grocery stores that sell fresh foods. Food deserts may contribute to increased risk of food-linked chronic disease, including type 2 diabetes, hypertension, and chronic kidney disease, in the communities they affect—mostly low-income urban neighborhoods and small rural towns.

Food deserts aren’t naturally occurring phenomena. They’re man-made: You can’t tell the story of food deserts without telling the story of how Walmart became a dominant retailer in the US. Stacy Mitchell is one of the people who tells this story best: Mitchell is a codirector of the Institute for Local Self-Reliance, where she has been researching corporate power and advocating for better economic policies for independent businesses since 1998. She believes food deserts are a symptom of bad business policies—and, if we don’t make and enforce better policies, a driver of further economic, environmental, and human health distress in our cities and towns.

A Q&A with Stacy Mitchell

Q
What is a food desert?
A

A food desert generally means that there is no fresh food option within a certain distance. The federal definition varies: If it’s a city, that distance is a mile. For rural areas, it’s ten miles or more. Essentially, it considers what’s a reasonable distance for someone to go to get their groceries. If there’s no grocery store within that range, that’s an area that’s considered a food desert.

There are about 20 million Americans who live in food deserts. Those tend to be two types of communities: small rural towns and low-income urban neighborhoods, particularly neighborhoods with significant Black populations.


Q
How did food deserts come into existence? What happened to all the grocery stores?
A

To understand that, we need to step back and start with this underlying trend: We’ve seen extraordinary consolidation in the grocery retail sector. Five companies capture 50 percent of all grocery spending in the United States. Walmart alone captures one out of every four dollars that Americans spend on food. There are forty-two metro areas where Walmart captures more than 50 percent of grocery spending, and there are a number of them where it’s more than 70 or 80 percent.

Walmart grew in the food sector by engaging in practices that violate antitrust laws but that we haven’t prosecuted in many decades. One of the ways it grew was by selling groceries at a loss in order to drive smaller competitors out of business—a practice known as predatory pricing. Walmart made up the lost grocery revenue on other merchandise, but family-owned, independent grocers and small chains didn’t have that option. They couldn’t match those prices and operate in the red like that. If you’re a small company, you can do that for only so long before you go under. Walmart can do it indefinitely. So a lot of local grocery stores and small chains were forced to close.

Many of these stores were located in low-income neighborhoods and very small towns. As they went under, those communities were left without a supermarket. People then had to travel to another part of the city, or to a suburb, or to a distant town to find a Walmart or another supermarket—or get by on what they could purchase at convenience stores and fast-food outlets.

“Reinvigorating our antitrust policies, revisiting land-use policies, and rethinking capital and funding are all critical to solving the issue of food deserts.”

There are two factors behind the persistence of food deserts today. On the one hand, the big supermarket chains don’t particularly want to be in these small rural towns and low-income urban communities. That’s not only because these neighborhoods are low-income but also because, in the case of urban neighborhoods, these chains don’t want to have to figure out how to wedge one of their stores into a small lot in a city. They’d rather establish a store out in the suburbs, which they can do much more easily. And they also aren’t particularly interested in these communities.

At the same time, the family-owned grocers who are interested in these locations have been squeezed out, marginalized, or even driven out of business by the big chains. For entrepreneurs who would want to come in and start a grocery store in a community like this, the biggest barrier is being able to get a loan. The bank looks at them and says, “You’re an independent grocer and you want to go into a low-income community. That’s two strikes against you. We don’t think that’s a safe bet.”

So: The big chains have the capital to serve these communities, but they’re not interested. And the local grocers that would like to serve these communities face a lot of barriers to capital access because of the market power of Walmart. This has left many areas with no full-service grocery stores at all. (And the local stores that survived Walmart are now falling to dollar stores: Dollar General, Dollar Tree, and Family Dollar.)


Q
Why is it so difficult to solve the issue of food deserts?
A

Lax approach to antitrust enforcement: Enabling more locally owned grocery stores, including food co-ops, to start up and grow is critical to solving this problem. But they can’t succeed unless we have stronger policies to prevent predatory behavior by giants like Walmart. There’s an effort underway in Congress to strengthen our antitrust policies. We can look to history for guidance. Prior to the 1980s, antitrust enforcement was much stronger. In those years, you had major grocery chains (like A&P), but because they were kept in check, you still had a lot of variety in the grocery sector, including many small, independently owned stores. If you wanted to go to a big national chain, that was an option. If you wanted to go to a local store, that was an option. In the 1980s, there was a major shift away from enforcing antitrust laws. We’ve taken this approach ever since, under both Republican- and Democrat-run governments. A lot of the extreme consolidation we see now has to do with that change in antitrust policy in the 1980s.

Capital access: Grocery stores are expensive to finance. Even small neighborhood greengrocers take fairly substantial capital investment to start. Small businesses rely on loan capital, and consolidation in banking has made it more difficult for local businesses to get those loans. The big chains like Walmart rely on the capital markets; they’re awash in capital.

Local land-use polices: Local land-use policies have generally heavily favored big-box retailers and suburban sprawl, and they have undermined the kind of neighborhood business districts that have typically housed local grocery stores. That’s both driven the growth of the big chains and undermined the local stores.

Reinvigorating our antitrust policies, revisiting land-use policies, and rethinking capital and funding are all critical to solving the issue of food deserts.


Q
What kinds of programs would help rebuild local food systems?
A

The solutions are policies and projects that take us in the direction of diversified community-scaled and regionally scaled production and businesses. My vision is a food system in which we’re relying on our home regions for a larger share of our food. We can develop approaches to food production that are in harmony with our environments and beneficial to our communities, as opposed to the ones we have now, which are oppositional to those things.

An example of good work: There is a great program in Pennsylvania called the Pennsylvania Fresh Food Financing Initiative that has provided grants and low-interest loans to fund fresh-food stores in underserved rural and urban neighborhoods. It’s funded about a hundred new grocers in those communities across Pennsylvania—virtually all of them locally owned independent businesses. That’s a great model of how if we provide the capital and some technical support, we can start to fill this gap.

And another: At the local level, more than a dozen communities across the country have passed laws that put limits on the number of dollar stores that can come in. And their governments provide incentives for local grocery stores to open. Sometimes those are financial incentives, but they can also be things like fast-tracking the permit process or lifting parking requirements—things that make opening a grocery store easier.


Q
What can communities do to support their local food producers and sellers?
A

Your local businesses, farms, and food producers need your dollars. They rely on you. Choosing to support your local food system is a great thing to do, and it is critical for local food systems to exist. But it’s not going to solve the problems I’m outlining here. These issues are driven by big policy choices and the ways our food production and distribution economies are structured. So if you buy local and that’s all you do, you’re not helping to solve the problem of food deserts. That’s why we need people to take the extra step of engaging with lawmakers, being active in advocacy organizations that are addressing these issues, and getting involved as a citizen and a community member.


Stacy Mitchell is a codirector of the Institute for Local Self-Reliance, a research and advocacy organization working to build strong local economies. She is the author of Big-Box Swindle. She helps guide policymakers and community organizations to develop policies that support independent businesses and fight corporate power.


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