Tuesday, June 10, 2008

Dohoney: 'Food deserts' must be addressed

In a follow-up to a May report on the possible closure of the Walnut Hills Kroger, Cincinnati City Manager Milton Dohoney Jr. says that he does not support City subsidies for an unprofitable grocery, but does endorse the study of how Cincinnati can combat the 'food deserts' issue that is plaguing many inner-city neighborhoods.

'Food deserts' are large geographic areas where healthy choices for groceries are either unavailable or are at a great distance.

Often, these communities have an abundance of fast food outlets, convenience stores or liquor stores - largely blamed for higher incidents of obesity and other diet-related illnesses.

Earlier this year, Kroger announced plans to close its store at (BIRD'S EYE) unless it can negotiate a more favorable lease with the property's owner.

Kroger, which both leases the building and pays rent on the land, has reported operating losses at the Walnut Hills location for the last several years.

The company has stated publicly its desire to keep the store open beyond their February 2009 lease expiration and has been meeting with the building owner to reduce the rent cost and to shorten the lease term.

Kroger has not asked for any City subsidy.

To improve the aesthetics of the surrounding neighborhood, the City has targeted expenditures of over $1,000,000 by fall 2009, including:

* Streetscape improvements
* Business district acquisition and redevelopment
* Façade improvements
* Parking lot enhancements
* Community park improvements
* Historic building renovation

Neighborhoods matter

Since Dohoney's last report, staff from the City's Department of Community Development have been meeting with Local Initiatives Support Corporation and Brookside Advisors, a national consulting firm specializing in urban grocery stores.

During their meetings, they have discussed the shift in the grocery industry from the neighborhood-based model to the market area or regional model.

Even though neighborhood boundaries are largely unimportant to grocery operators, the neighborhood's physical condition can drive down sales.

"Investment in neighborhood infrastructure is a necessary first-step to attract and retain anchor businesses within the business districts," Dohoney writes.

Often, a physically deteriorated environment leads to a perception of crime, meaning that store managers need to hire additional security.

"The business is required to absorb the higher operating costs even though crime and safety data do not support the perception," Dohoney writes.

This phenomenon, when coupled with the higher rents often charged in urban areas, means that the 'sales-per-cart' for urban grocery stores is often much lower than operators can make in a larger, more economically-diverse market area.

Where Walnut Hills stands

The current Walnut Hills Kroger store is 31,000 square feet, roughly 10,000-15,000 square feet smaller than what is considered to be profitable in today's market.

This is largely because the profit margins on perishable items are small, requiring additional space for higher-margin non-grocery items.

According to Social Compact's recent Cincinnati DrillDown Study (PDF), Walnut Hills only has a 29,093 square foot store potential based solely on its population.

Dohoney recommends that the issue of 'food deserts' be addressed in the context of the City's comprehensive plan.

"The issue of food deserts in the City of Cincinnati does need to be addressed whether it is improved transportation, cooperative grocery stores, or better market-driven locations," Dohoney writes. "This issue needs to be thoroughly researched and a plan developed for implementing these changes."

The average distance to a grocery store in Walnut Hills is just under half a mile.

Previous reading on BC:
Cincinnati, Kroger working to keep Walnut Hills store (5/9/08)
Cole: Walnut Hills residents need access to quality food, too (3/31/08)


steve-o said...

Thanks for the research, Kevin. This is good stuff. The topic of healthy eating is an issue that many in our community are dealing with.

The one thing that I found interesting was the final statement that the avg. distance to a grocery store in Walnut Hills is half a mile. I'm assuming that this includes the current Kroger site. Without it, the statistic would change for those living towards eastern Walnut Hills.

The main uproar concerning Kroger leaving this community is that many residents of Walnut Hills have no access to cars. So if Kroger leaves it would make it difficult for seniors and others to walk to the nearest store in Coreyville. It might not seem that far when the weather is nice, but how often is that the case in our city?

Kroger wants out of Walnut Hills without having to make an effort to turn a profit. They're good as gone.

Anonymous said...

I find it so sad that a business which was built by Cincinnati residents has left many of cincinnatis neighborhoods. Building bigger super stores in West Chester, Finneytown, Middletown, Springdale etc. while ignoring the needs of those who live in the City of CIncinnati. Hartwell is a great example..I have made requests for updates and although you see new lights...that is not what I wanted. I want to see a 5th/3rd, larger selection of items, plants like other stores, and sprucing up of the exsisting building interior and exterior. Instead I see ourselves probably fighting to keep our store in the future. Hartwell has great customer service and that is why many prefer that store over the bigger & newer one in Woodlawn. One the Kroger company web site it stats "Mr. Kroger would hardly recognize his company now"...I agree, he would probably be ashamed that the company now bites the hand that has fed them. -Dawn

Amy said...

I live in a rehabbed condo within easy walking distance of the Walnut Hills Kroger. But I drive to Hyde Park - because there isn't anything fresh in the Walnut Hills store.

I wonder why they don't try rehabbing - maybe a Kroger Fresh Market - they'd be in a great location for Walnut Hills, Mount Adams, Clifton and Corryville, none of which has a "nice" grocery store.

The only thing prevent Eden Park-adjacent Walnut Hills from becoming a great neighborhood is the mess on E McMillan. I think we could become the first truly diverse (income and race) neighborhood in Cincinnati.

Anonymous said...

It's just business, folks. If produce and healthy foods don't sell, the stores don't stock them.

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