Tags

, , ,

In 2006, Mari Gallagher Research and Consulting reported that many of Chicago’s citizens were without access to fresh produce. Put off by the challenges of operating in inner‐city and often low‐income neighborhoods, large grocery store chains opted for tonier zip codes for their stores, leaving city dwellers to be served by fast‐food restaurants and convenience stores stocked with snack foods and canned goods. These neighborhoods were dubbed “food deserts” because of the lack of healthy food options. An unlikely candidate stepped in to turn these deserts to oases: Drug store chain Walgreens.

Last summer, Walgreens began stocking 10 of its inner-city Chicago stores with hundreds of new food choices, including fresh fruits and vegetables. From the pharmacy giant’s point of view, the move has appeal beyond improving customer health: An opportunity to increase profits. Stores already existed in many of the locations identified as food deserts in the Gallagher study, and competition was sparse. While Walgreen’s has been reluctant to discuss the success of their experiments, their move has spawned imitation by competitors CVS and Duane Reade.

But despite the positives, the move into this market niche has challenges. The stores needed retrofitting to accommodate new products, managers had to find new suppliers, and both customers and staff had to adjust to the change. Furthermore, the shelf life of a Band-Aid is a lot longer than that of a banana; stores will need to find the correct balance of supply and demand to avoid profit loss through product spoilage.

Discussion Questions:

  1. What is a food desert?
  2. What are the challenges and benefits derived in solving this problem?

Rob Walker, “Walgreens Tackles ‘Food Deserts’,” The New York Times, November 12, 2010.

Advertisements