Solve food deserts with an online pipeline

September 15, 2011

Stores don't have to spend heavily to fill gaps in underserved areas when technology can be the answer.

Supermarkets are among the most technologically advanced retailers. So it surprises us they haven't applied this know-how to service millions of families that need what stores have but live in food deserts.

The big picture is clouded by so much talk and energy about filling service gaps with high cap-ex stores, and so many monetary incentives offered by municipalities. Short memories are also convenient. Stores used to be in many of these areas, but vacated for various reasons, including some bad behavior. Among them:  Neighborhood consumers didn't buy enough good-for-you foods when they were readily available. And some operators were vilified for charging higher prices in these areas, since they were often the only convenient choice.

Let's say in 2011 that human nature won’t change. We don't think the best solution is opening new supermarkets in food deserts. But The Lempert Report does believe the consuming public knows more today about what they should eat to be healthier, and there are plenty of small-scale success stories such as community gardens and produce trucks filling the better-for-you need in Detroit. Also, Walgreens is making foods more available in Chicago-area food deserts as part of its strategy. That will help because a study by Mid-America Real Estate Corporation shows "the traditionally underserved food deserts of urban Chicago" grew grocery penetration by 11.01% over the past two years, "although such areas are still heavily underserved."

Still that's not enough. Supermarkets should feel a responsibility to serve the food-desert markets in a sound business way. That's why we suggest that supermarkets create paths to purchase for these consumers by offering low-cost Internet access and food deliveries – if not to individual apartments, at least to a satellite staging area on each block for multiple orders. People will quickly adapt to delivery schedules because it beats a bus ride lugging bags with thawing food.

We saw in a recent Los Angeles Times where Comcast began to offer a $9.95 per month Internet plan to low-income families in areas they serve who have at least one child receiving free school lunches from the National School Lunch Program. The plan also offers these families a $149.99 netbook.

Supermarkets could collaborate with Internet service providers and local deliverers to keep down their fixed costs while selling more and helping to improve the lives of many.