Some of the nation’s largest retailers are joining first lady Michelle Obama’s effort to bring fresh foods to impoverished neighborhoods by opening and expanding more than 1,500 U.S. grocery stores in those areas.
Wal-Mart Stores Inc., Supervalu Inc. and Walgreen Co., along with a number of regional grocers, announced plans to increase the availability of fresh food in locales that have been designated by the U.S. Department of Agriculture as “food deserts.”
In recent months, the retailers have described food deserts as fertile ground for growth, and they already have made inroads in Chicago. Supervalu, Wal-Mart and Walgreen have promised to open new stores or expand offerings in nearly 100 stores in the next three to five years to serve areas that don’t have access to fresh produce. Wednesday’s announcement underscores that commitment.
At a White House press conference with the first lady, Dr. James Gavin, chairman of the Partnership for a Healthier America, estimated that 23.5 million Americans don’t have access to fresh fruits and vegetables in their neighborhoods. Over the next five years, he said, these retail commitments will serve 10 million people and provide jobs for tens of thousands.
Gavin added that the retailers have signed commitments to open stores, and his organization will be reporting on their progress.
Obama’s office hopes to spur additional food-desert development through federal funds. The Healthy Food Financing Initiative will award $35 million in grants this year to make healthy food available to more Americans. An additional $330 million has been earmarked for 2012.
An Obama spokeswoman said the funds will be used to “leverage hundreds of millions more from the private and nonprofit sectors” for further development.
“This is a really big deal,” Obama said during the press conference. “The commitments that you all are making today have the potential be a game changer for our kids and our communities all across this country.”
In many cases, these stores have been planned or previously announced.
Jim Hertel, managing partner of Willard Bishop, a Barrington-based grocery consulting firm, described the announcement as “a situation where current plans dovetail nicely with a hot topic.”
“It does represent an opportunity for people to talk about their plans that they were probably largely going to be following whether or not this announcement had come along,” Hertel said.
Obama’s Let’s Move initiative, intended to combat childhood obesity in America, has garnered widespread participation in the food industry. It also has provided a platform for some participants to announce programs under way.
In February 2010, Northfield-based Kraft Foods Inc., Downers Grove-based Sara Lee Corp. and 38 other food companies signed on to the initiative by promising to create healthier products. However, most major food companies had been reducing fat, calories, sodium and trans fats for several years in response to consumer demand.
By contrast, Bentonville, Ark.-based Wal-Mart took the grocery industry by surprise, according to two experts, when the company and Obama held a joint press conference in January to announce Wal-Mart’s commitment to making its private-label food healthier and more affordable. In so doing, the nation’s largest grocer put pressure on other retailers to follow suit.
At the time, Wal-Mart also promised to build grocery stores in food deserts and to pressure food manufacturers to ramp up their own product reformulations.
Such efforts could help Wal-Mart with its expansion strategy. The retailer has encountered strong opposition to plans to expand into urban areas, particularly in Chicago, where it has one store and nine more planned, with 59 more in the surrounding area.
“There’s a lot more receptivity today” to some of the contested locations, Leslie Dach, Wal-Mart’s executive vice president of corporate affairs, said in a call with reporters Wednesday. Dach pointed to “the recognition of the contributions these stores … make to the local economy, the jobs they create, the affordable food they provide and the fact that we have become a better neighbor and better company over the last several years.”
Wal-Mart plans to open 275 to 300 stores in food deserts by 2016. Dach said these stores haven’t all received approval, and none is in New York City, where the retailer also has encountered opposition. Wal-Mart has opened 218 stores nationwide in food deserts since 2007.
Minneapolis-based Supervalu plans 250 Save-A-Lot stores in food deserts over the next five years. The company has announced plans to double the size of its bargain chain, including 35 stores in the Chicago area. Most Save-A-Lot stores are owned by franchisees.
In an interview, Supervalu CEO Craig Herkert said that being part of announcements like this, as well as one with Chicago Mayor Rahm Emanuel earlier this summer, help underscore support for the new stores and, over the long term, hopefully will create goodwill in neighborhoods.
In the short term, Herkert said, he’s pleased the company will be providing nearly 4 million people with access to fresh foods in areas where there isn’t a grocery within short walking distance. The stores also represent 6,000 new jobs.
“It’s a really good business opportunity, and it’s good for America,” he said.
Deerfield-based Walgreen plans to add fresh-food options at 1,000 locations in food deserts over the next five years. The drugstore chain is undertaking a major expansion into grocery. In the Chicago area alone, Walgreen expects to have expanded 50 stores to offer fresh fare in food deserts by 2013.
“We’ve always been committed to communities and the role of the community pharmacy,” said Rachel Bishop, divisional vice president for strategic planning and analysis in Walgreen’s merchandising division. By also providing fresh fruits and vegetables, she said, Walgreen is “serving the community by giving them access to products (that) help support their health and wellness goals.”