The Case for Walmart

New York City politicians should drop their misguided war on the retail giant.

In late November, New York City fired another preemptive strike against the gathering threat of $4 prescription drug co-pays, organic baby food, and eco-friendly laundry detergent. It came in the form of a report entitled Food for Thought: A Case Study of Walmart's Impact on Harlem's Healthy Food Retail Landscape. While the retail giant has yet to announce any imminent store openings in the city, Walmart is determined to break into urban markets with smaller-format stores. It has already opened one outlet in Chicago, has plans for half a dozen in Washington DC, and, well, you can't put anything past a sharp-eyed New Yorker, especially given that the city has been loudly decrying its lack of supermarkets in recent years—a Walmart in New York would make total sense. And thus city officials have been working hard all year to quash such scheming. Low prices for the people of Gotham City who don't have the time or wherewithal to venture to New Jersey or Long Island? Not if Manhattan Borough President Scott Stringer has anything to say about it.

Published under Stringer's imprimatur, Food for Thought draws upon "research on the experience of other localities" and "original survey data" to conclude that opening a Walmart of indeterminate size at a specific corner in Harlem—West 125th and Lenox Avenue—would have "an immensely negative impact on New York City" and could "nearly negate fours years of citywide efforts to improve food access for underserved communities." Damage would be worst at the epicenter. According to the report, "48 to 66 stores" within a mile of West 125th and Lenox will perish if a Walmart is allowed to open on the site.

Attacks on Walmart from New York City politicos aren't news. In February 2011, for example, various City Council members competed with each other at a special hearing to see who could posture hardest against the retail giant. But if the arguments Food for Thought deploys against Walmart seems fairly well-chewed at this point, its characterization of Harlem is surprisingly novel. While the neighborhood is often characterized as a "food desert" and an "underserved" area by New York City officials and food justice activists, Food for Thought touts Harlem's "diverse retail landscape" and "multitude of fresh food outlets."

According to the report, there are 304 food retailers within a one-mile radius of West 125th and Lenox Avenue that are 10,000 square feet or less in size. (Food for Thought didn't include food retailers that are 10,000 square feet or more in its survey. A 53,000-square foot Pathmark is located a half mile from West 125th and Lenox. A 174,000-square foot Target is a mile and a half away.)

Of these 304 retailers, only five are greater than 6000 square feet in size. The great majority of them—230—are "bodegas," which are also known as convenience stores, corner stores, or that place up the block where one sad rotting banana and a can of Spaghetti-O's, vintage 2009, serve as décor for the merchandise that really moves there: booze, tobacco, lottery tickets, candy, ice cream, and Slim Jims.

If you're a libertine with a zeal for the grittiest aspects of urban life, bodegas are a boon to any neighborhood. They pioneered the sale of single cigarettes. They're more likely to stock shrink-wrapped value-packs of recycled porn magazines than value-packs of, say, diapers. They're excellent venues for food stamp fraud. As purveyors of fresh fruits and vegetables, however, or even reasonably priced cat food, they enjoy a less stellar reputation. In fact, Eating Well In Harlem: How Available is Healthy Food?, a 2007 report from New York City's Department of Health and Mental Hygiene, argued that the area's preponderance of bodegas and lack of supermarkets was the reason for its high rates of obesity and diabetes. "Approximately 2 in 3 food stores in East and Central Harlem are bodegas," it reported, and these bodegas had "a more limited product selection than supermarkets and other stores do." According to the report, only 3 percent of the bodegas in East and Central Harlem carried leafy green vegetables. Only 30 percent carried low-fat milk.

In 2008, New York's Department of City Planning released a similar report entitled Going to Market: New York City's Neighborhood Grocery Store and Supermarket Shortage. It too advocated for more supermarkets, insisting that "increased competition in underserved neighborhoods would reduce grocery costs" and that supermarkets would also "improve property values," "create jobs," and "serve as retail anchors, attracting foot traffic and complementary retail."

In addition to issuing reports, New York City has also created several programs in recent years that are designed to broaden the range of fresh foods retailers carry and encourage developers and grocery store operators to open larger stores in the city. In 2005, it created the Healthy Bodegas Initiative, a modestly funded program that has tried to incentivize bodega store owners to carry healthier fare by offering them posters and other promotional materials, providing marketing and merchandising advice, assisting them in obtaining loans and licenses, and helping them improve their stores storage and shelving capacities.

In 2008, New York City created the Food Retail Expansion to Support Health (FRESH) program, which offers zoning incentives, tax breaks, pre-development loans and grants, equipment financing, construction loans, and various other inducements to grocery store operators and developers if they build grocery stores that are 6,000 square feet or larger. To date, the program has secured $8.5 million in financing for 222,000 square feet of space in Brooklyn, Queens, and the Bronx.

But as Food for Thought notes, "the [FRESH] program has had no impact on the food retail landscape of Manhattan"—none of those 222,000 square feet are located in Harlem or anywhere else in New York City's most densely populated borough. In the case of the bodegas that dominate Harlem's retail food landscape, Food for Thought optimistically reports that 23 percent of the bodegas within a one-mile radius of West 125th Street and Lenox Avenue now carry at least three kinds of vegetables, and 37 percent of them carry at least three kinds of fruit.  Which essentially means that one in four Harlem bodegas now offer almost as many kinds of veggies as a McDonald's Angus Deluxe.

Compared to what New York City's Department of Health found in 2007 when it surveyed a different but overlapping set of bodegas for its Eating in Harlem report, there appears to be substantial improvement. But as Food for Thought also documents, just 12 bodegas in its survey area—or 5 percent of that area's primary type of retail food outlet—carry at least six varieties of fruit.

As Nick Gillespie reports in an April 2011 Reason.TV piece, Walmart's increasing focus on groceries—and its success in selling them—has limited expansion opportunities for traditional grocery chains, which are the most unionized sector of the retail workforce. To stay in good stead with UFCW Local 1500, Scott Stringer and his colleagues are pretty much compelled to oppose Walmart as vehemently as they can manage. But characterizing an area where 218 out of 230 stores have never harbored a peach or a grapefruit as a "diverse retail landscape" with a "multitude of fresh food outlets" is asking Harlem residents to swallow a lot of empty rhetorical calories in pursuit of such efficacies.

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Ultimately, even bodegas committed to selling fresh produce will never be optimal delivery channels for such fare. They're small, often undercapitalized enterprises that can't afford to invest large sums of money on goods that may end spoiling before anyone buys them. The prices they charge will always be higher than those charged by larger entities that can obtain volume discounts from suppliers. They lack the sophisticated inventory management and sales analysis tools that helps operations like Walmart serve their customer bases so effectively. (A Healthy Bodegas Initiative internal program review prepared in 2009 reports that "bodega owners were unable to even make a guess about how many people they typically serve in a day.")

Over time, the Healthy Bodegas Initiative determined that it could be most effective by concentrating its efforts on improving the quality, affordability, and variety of items in bodegas that already stock some produce rather than trying to convince ones that aren't carrying any to start doing so. And even with this limited, pragmatic approach, its Program Development Specialist, Donya Williams, is careful to temper expectations. "We can't work successfully with all stores," she states in a 2010 presentation. "You have to meet the stores where they're at," she says in an undated interview at Food Systems Network NYC. "So to think that these small corner stores are going to look like mini Whole Foods is just not realistic….Right now, unfortunately, there's not much choice. Our idea is to expand the choices so that people can pick the healthier option. I'm not saying it's the healthiest, just healthier; it's baby steps. Change is incremental."

But while the incremental changes that the Healthy Bodegas Initiative is helping bodegas achieve are inspiring, it's hard not to imagine that at least some of Harlem's residents are hungry for the sort of radical change and abundant choice to the local food landscape that Walmart could deliver overnight. Scott Stringer may not be among them, but then again, he lives on the Upper West Side, where he shops at Fairway Market, which New York magazine describes as "a multistory, 35,000-square foot gastronomic temple where floor-to-ceiling assortments of glistening fresh produce offset homey prepared foods and tempting baked goods." If his constituents at West 125th and Lenox are lucky, perhaps he'll bring some organic kale along the next time he drops in on the neighborhood to save it from stores that stock more kinds of fruit than a can of Del Monte Fruit Cocktail does.

Contributing Editor Greg Beato writes from San Francisco.