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Wal-Mart, Food Deserts and East Harlem:
Trying to Have It Both Ways

Jim Prevor’s Perishable Pundit, January 4, 2012

A hat tip to Tim York, President of Markon Cooperative, for passing on this piece from the New York Daily News: Walmart in Harlem would put other food stores out of business, report predicts:

A Walmart opening in Harlem could put many of the smaller stores selling fresh food in the neighborhood out of business, according to a report by Manhattan Borough President Scott Stringer.

Stringer’s office surveyed the area around 125th St. and Lenox Ave. and predicted that 30 to 41 supermarkets, green grocers, and bodegas that sell fresh produce would go out of business within a year if a Walmart opened there. That’s 25% of area food businesses.

Another 18 to 25 stores could shutter in the second year.

Walmart officials have said they are interested in opening several stores in the city but refused to publicly discuss what sites they might choose. The researchers decided to zero in on the W. 125th St. site because it is large enough for a Walmart, in a low-income neighborhood, and would not require zoning changes.

“I’m all for low prices, but there are ways to do that that don’t include killing local businesses...and making it harder and harder for communities to find fresh food,” Stringer said.

Walmart has touted its ability to bring fresh food to so-called “food deserts” — even gaining plaudits from first lady Michelle Obama — but Stringer’s report predicts the big box chain opening would actually cause a net loss in the square footage dedicated to fresh food.

The predictions are based on a study by Loyola University that found that after Walmart opened in Chicago, 25% of competing businesses in a one mile radius went out of business within a year, and 40% closed within two years.

Walmart backers have slammed that study because it didn’t account for new businesses that opened. Hugh O'Neill, president of economic development consulting firm Appleseed, said there’s “no empirical evidence to suggest their arrival means doomsday for local retail.”

Walmart spokesman Steve Restivo, agreed: “The truth is that anyone who has been to the west side of Chicago knows the positive economic impact we've had there, just like anyone who walks the streets of Harlem knows residents need more affordable options when it comes to healthy, nutritious food.”

Walmart backers note that a Target with a grocery section that opened last year prompted no such scrutiny from elected officials — with Stringer even showing up to cut the ribbon on the development. A Stringer spokesman said there’s no comparison, since Walmart’s status as the world’s biggest retailer means its impact is unique.

Walmart has been in talks with developer Related Companies to open its first city store in East New York, but execs are also eyeing other unidentified sites around the city.

The whole idea of food deserts as an important cause of low produce consumption or obesity has never made much sense to us. Yes, of course, there are rural areas where there are few stores, and this may well lead to more canned and frozen consumption than if there was a great corner market where people could daily pick up fresh foods. But this is the nature of rural living, imposes the most modest of hardships and, by definition, affects only sparsely populated rural communities.

In urban areas, there may be regions with few conventional supermarkets but with the intense competition in retailing, if there are no supermarkets in an area with the population to support one, it is either caused by A) Local zoning and political restrictions; B) High costs imposed by a failure of the police to control crime or prevent graft and corruption; C) Lack of spending power to support a store; or D) Cultural patterns that cause people to prefer alternative shopping venues. Any of these things can lead to a lack of stores. We’ve written about the importance of crime fighting in dealing with this issue here.

The other possibility is that the whole issue is mostly nonsense used by advocates and politicians to give themselves money and power. They define a problem and then give out money to build stores, etc. In other words, they use the taxpayers’ money to win friends and influence people.

What this article really shows is the phoniness behind all these food desert claims. Here is East Harlem, the prototypical urban food desert… you can be sure that all the politicians here would be plaintively explaining the urgent need for federal funds to deal with this urgent food desert problem. Yet, suddenly, the supposedly conservative, anti-union Wal-Mart wants to open a store and the exact same politicians who would decry East Harlem’s status as a food desert now suddenly claim that Wal-Mart will drive all these stores selling fresh produce out of business:

…30 to 41 supermarkets, green grocers, and bodegas that sell fresh produce would go out of business within a year if a Walmart opened there. That’s 25% of area food businesses.

Another 18 to 25 stores could shutter in the second year.

Well which is it? Is this a horrid food desert with people unable to buy fresh produce or are there dozens and dozens of stores selling fresh produce? These advocates and politicians can’t have it both ways.

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