Supermarket blackout - lack of quality grocery stores in black communities - ST

Black Enterprise, July, 1999 by Monique R. Brown

"The mistake retailers make when examining inner cities is in thinking that these are communities of poorer people," says Anne S. Habiby, director of research and communication for Initiative for a Competitive Inner City (ICIC), a Boston-based nonprofit corporation aimed at encouraging private-sector development in inner cities. According to the organization's 1998 study, The Business Case for Pursuing Retail Opportunities in the Inner City, inner-city areas can have up to six times as much buying power as surrounding communities. While inner-city residents may report lower-than-average incomes, that doesn't necessarily mean they are poor. In 1995, nearly three in 10 inner-city households had incomes of $50,000 or more, and another 12% reported incomes of $75,000 or more. In fact, the estimated 7.7 million households in America's inner cities represent more than $85 billion in retail spending power. That's 7% of total retail spending in the country. Market Segment Research & Consulting Inc. in Coral Gables, Florida, reported that in 1996, African Americans spent approximately $23 more than other ethnic groups during each trip to the grocery store. If the major food chains chose their locations based on the facts, supermarkets would be popping up all over black neighborhoods.

THE FALLOUT: HOW ECONOMICS AND EMPLOYMENT ARE AFFECTED

The scarcity of supermarkets in inner-city communities has serious consequences. After shelter, food is the second highest consumer expenditure. And because 25% of retail demand in inner cities is unmet, according to a 1998 study by the Boston Consulting Group, black neighborhoods lose billions of dollars at a faster rate than other communities. In addition, residents who choose to shop within the community spend their dollars inefficiently. A 1998 poll conducted by Supermarket Business magazine found that African Americans are more likely to shop at convenience stores, which means their purchases are significantly more costly than if they were to shop at mainstream supermarkets. The Boston Consulting Group also found that inner-city shoppers can pay as much as 40% more for basic groceries than their suburban counterparts. As a result, African American consumers are often forced to live without certain products or services, pay higher prices for goods within the community or shop outside their neighborhoods. In an ICIC focus group, Harlem residents discussed going elsewhere to find quality goods. "Sometimes six or eight of us share a van to New Jersey to go to BJ's," one participant commented of their excursion to one of the new warehouse super retail stores.

Although prices are typically higher in African American neighborhoods than other areas, some argue it isn't a "black thing," but an economic issue. "The single-store owners that predominate in black areas have a problem because they can't buy the large volume that I buy," argues Johnson. The owner of 10 high-volume supermarkets, Johnson says, "It doesn't just depend on the neighborhood, it depends on the size of the stores in that neighborhood."