CHICAGO -- Like some modern-day Moses, Chicago's new Mayor Rahm Emanuel has been wandering in the "food desert" of southside Chicago, looking for giant chain stores to feed his people.
But just as Moses never reached Canaan, Mayor Emanuel may never emerge from the food desert if he keeps having visions of Wal-Mart as the promised land.
On June 15th, Hizzoner held a "Food Desert Summit" at a community center in the Windy City. Invited to the Summit were representatives from Wal-Mart and other grocery chains. According to a Chicago Sun Times reporter who was at the command performance, the Mayor "didn't pound on the table, or even let loose a cuss word. He showed up with a detailed analysis of potential sites that included the type of information the stores require when making decisions about locations."
This Chicago Moses even invoked the name of his divine inspiration, Barack Obama. "The White House knows I am doing this conference today," Emanuel reportedly said. "We are going to report on our progress and lay out a comprehensive plan for the next four years."
In early March, two months before he was sworn into office, Rahm Emanuel put the large chain stores on notice: he wanted low-income neighborhoods in his city to have easy access to fresh fruits and vegetables within a one mile walk. "You can't have a major city with 600,000 out of a population of 2.8 million people not have access to fresh fruits and vegetables," the Mayor-Elect told a crowd at the annual International Home + Housewares Show. "It's bad and it's wrong."
The Mayor said companies like Wal-Mart could be part of the solution, which would result in new jobs, fresh foods, and healthier outcomes for his constituents. This line of argument makes Emanuel a direct disciple of his predecessor, former Mayor Richard M. Daley, who embraced Wal-Mart expansion in his city. One week after Emanuel's speech at the Housewares breakfast, outgoing Mayor Daley made a joint appearance with Wal-Mart officials to announce that the retailer would build six new stores in Chicago over the next two years. Daley, to the chagrin of organized labor in Chicago, had nothing but good to say about Wal-Mart: "I applaud their leadership in creating jobs and providing retail and grocery services in areas of the city that need it most."
Wal-Mart returned the favor, lavishing praise on the departing Mayor. "Mayor Daley has been a champion of economic development in the city and his support of Wal-Mart through the years has allowed us the opportunity to do what we do best: open stores that create jobs and offer a broad assortment of products at every day low prices," said a Senior Vice President for the Arkansas-based corporation. Wal-Mart claimed that its half dozen stores would "create more than 1,000 new retail jobs" in the city.
But is Wal-Mart the promised land at the end of the food desert -- or just an economic mirage? The economic evidence suggests that Wal-Mart's claim of "1,000 jobs" is nothing but sand. In 2003, a study by Retail Forward predicted that "for every Wal-Mart supercenter that opens in the next five years, two supermarkets will close their doors. As a result, the supermarket industry is projected to lose 2,000 more stores over the next five years." The 'new jobs' promised by Mayors Daley and Emanuel are really old jobs in new aprons.
Last year, a study from Loyola University and the University of Illinois at Chicago concluded that the one existing Wal-Mart store in Chicago had not produced any new jobs in the local economy. The loss of jobs in the trade areas near Wal-Mart just about balanced out any 'new' jobs attributable to the giant retailer. "These estimates support the contention that urban Wal-Mart stores absorb retail sales from other city stores without significantly expanding the market," the researchers found.
According to food desert studies in Chicago, the city has made some progress in bringing affordable, nutritious food to underserved neighborhoods. A study from the Mari Gallagher Research and Consulting Group found that the number of people living in food deserts in Chicago in 2010 had fallen by nearly 60,000 compared to a year earlier. But at the time, a total of nearly 600,000 Chicagoans were still in these retail deserts.
But grocery store analyst David J. Livingston, of DJL Research, based in Waukesha, Wisconsin, tells me there "really is no such thing as food deserts. There are stores, just no chain stores. Politicians don't like to include ethnic-owned operations. The chains closed up because the people stopped shopping their stores. They were replaced by ethnic stores and the McDonalds dollar menu."
Livingston says we don't see supermarkets in the inner city because "historically they have performed below average in sales per square foot. Most low income inner city areas are littered with the skeletal remains of former supermarkets." He notes that declining sales are due to a combination of factors: smaller trade areas (often no further than walking distance); declines in population; an inability to draw in customers from outside the trade area; low per capita expenditures; real and perceived high crime rates; and difficulty recruiting qualified employees and managers.
Livingston says that "supermarkets don't like to close stores or get a bad reputation for closing stores. The best way to avoid this is not to open a store where there is a higher probability of closing." He adds: "No supermarket wants to endure accusations about racial discrimination. One of the best ways to avoid this is to avoid minority areas."
There are operational challenges as well, Livingston explains. "Even if a store is profitable it often will require district managers to spend a disproportional amount of time at an inner city store relative to other stores in their district. Ethnic areas require special merchandising skills that most supermarket operators do not have." Prices must be raised, Livingston says, "to make up for items shoplifted, higher security expenses, insurance liability, and higher wages."
From the grocery industry's point of view, Livingston says, there are political problems as well in food deserts: "Planning departments want too much input on how the store is constructed, local non-profit groups demand input on wage and hiring practices, there are often costly environmental and historical preservation issues which delay construction. Bureaucrats will often dictate wage and hiring practices of the general contractor."
On this last point, Mayor Daley was a major disappointment to organized labor when he vetoed in September of 2006, a city ordinance that would have required big box retailers like Wal-Mart to pay their workers a "living wage."
Forty years ago, the black community might have looked inward for its own entrepreneurs,and insisted on local ownership. But now political leaders turn to Wal-Mart Express stores. If Mayor Rahm Emanuel believes that national retailers will bring decent jobs and economic growth to the southside of Chicago, he might as well keep roaming the desert -- because he will never enter Canaan through the aisles of a Wal-Mart.
Al Norman is the founder of Sprawl-Busters. His is the author of Slam-Dunking Wal-Mart, and the case against Wal-Mart. He has helped local communities fight big box sprawl since 1993.