Limited Supermarket Access

The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) has released “Searching for Markets: The Geography of Inequitable Access to Healthy & Affordable Food in the United States”

According to “Searching for Markets” (http://www.trfund.com/wp-content/uploads/2013/05/SearchingForMarketsFullReport.pdf), 24.8 million Americans live in areas with limited supermarket access (LSA). The report also examines the disparity in access to healthy food for low-income and minority populations. The purpose of the research is to better identify target areas that would benefit from increased financing for healthy food initiatives, aiding low-income communities across the country. The CDFI Fund produced the report in partnership with Opportunity Finance Network and The Reinvestment Fund (TRF) for the Capacity Building Initiative.

The Capacity Building Initiative was created by the CDFI Fund to provide training and technical assistance to help CDFIs build capacity to meet their communities’ needs. The Financing Healthy Food Options track includes training workshops, informational resources and individual technical assistance. For example, the Missouri office of IFF (www.iff.org)—a certified CDFI—provides financial solutions and real estate consulting to nonprofit organizations focused on healthy food access and education. They offer solutions to strengthen organizations across the spectrum of the healthy food movement—including nutrition and wellness educators, community-based growers and distributors, and fresh-food retailers.

Recently, IFF created its Healthy Food Access Fund to finance full-service grocery stores in neighborhoods where there is documented low access to fresh food. (See sidebar.) The three largest cities in the Federal Reserve’s Eighth District (Memphis, Louisville and St. Louis) rank in the top 10 by scale of problem and the burden on low-income people. (See Table 1.) This Fund makes affordable, flexible financing available to retailers and wholesalers locating stores in high-need areas across IFF’s five Midwestern states (Illinois, Indiana, Iowa, Missouri and Wisconsin), specifically those with a plan to build community awareness and emphasize health and nutrition.

An LSA area is one where the residents must travel significantly farther to reach a supermarket than the “comparatively acceptable” distance traveled by residents in well-served areas.1 “Searching for Markets” demonstrates that residents living in LSA areas are 2.28 times more likely to be low-income. Other statistics from the report include:

• Black, non-Hispanic people are 2.49 times more likely to live in an LSA area than white, non-Hispanics.
• Hispanics are 1.38 times more likely to live in an LSA area than white, non-Hispanics.
• Residents of low-income block groups are 2.28 times more likely to live in an LSA area than those who live elsewhere.

“Searching for Markets” identifies 1,519 communities where supermarkets do not exist today, and where the unmet demand within the community is large enough to support a full-service grocery store. To determine these areas, the methodology first established a benchmark distance for people to travel to supermarkets, based on population density and car ownership, and then measured every block group in the nation against the benchmark.

The study also measures leakage, which is a measure of unmet local demand for food in LSA areas, an important factor from a retail-industry perspective. The estimated level of leakage provides a way to distinguish between LSA areas that could support a new full-service supermarket or the expansion of an existing store and those areas in which providing other forms of food retail may be a more viable strategy. Here are some of the report’s key findings:

• On average, residents living in LSA areas spend $1,120 annually on food products outside of their areas.
• Analysis of industry data shows that the average full-service supermarket produces sales of $12 million annually.
• TRF identified 772 LSA areas that have an estimated leakage of less than or equal to $12 million, and 747 LSA areas that have an estimated leakage of greater than $12 million.

Eighty percent of LSA areas are within census tracts that were eligible in 2011 for Community Development Block Grants (CDBGs), and 60 percent are within areas eligible for the New Markets Tax Credit (NMTC). Each overlap offers significant resources to support interventions.

The data on which the study is based are available to the public free of charge via a customized LSA tool on PolicyMap, TRF’s online data and mapping tool. The tool assists investors, operators, locally based organizations and policymakers to identify areas where supporting supermarkets may be a viable intervention strategy for improving residents’ access to fresh and healthy foods. Through PolicyMap, users can evaluate food access demand and underlying market conditions.

To review the findings for your state, city or local community before devising a strategy or implementing a plan, visit www.policymap.com.

Endnotes

1. The distances vary from 0.15 miles in the highest density/car ownership category to 17.46 miles for areas in the lowest density/car ownership category. [back to text]