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Nick Wiseman

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Wal-Mart's Coming to Town

Posted: 12/02/11 04:11 PM ET

Wal-Mart pledges to end food deserts in the nation's capital. The PR campaign is working; even the First Lady signed on. The messiah is coming to town. The world's largest grocer will do what no one else has done: brave underserved neighborhoods and deliver healthy foods to D.C.'s poorest residents. And they're not stopping at the District line. Wal-Mart is going to grace urban centers around the nation with new retail outlets -- all in the name of ending food deserts.

If that sounds like cynicism to you, to me it sounds like the company is trying to transform public perception away from being seen as, among other things, a predatory employer with a long history of underpaying its workers. Last I checked, 38 percent more Wal-Mart workers needed federal assistance to live than employees of other major retailers. I chose to focus on this one area, but criticism of the retail behemoth has come on many issues and from many corners.

But let's not get off track -- Wal-Mart is now in the business of delivering social good.

Whatever your thoughts on Wal-Mart's sincerity and impact on communities, it is important to examine a company's motives when they cloak themselves in the banner of social responsibility.

For the past nine quarters, Wal-Mart's sales in the U.S. have consistently dropped. The only way the company can grow is to build more stores. But the company has done a stellar job of blanketing the rural and suburban landscape of America. If it builds more stores to reach its traditional demographic, new stores will assuredly cannibalize the old ones.

Herein lies the predicament.

For Wal-Mart to grow, it has to turn to urban areas. Not because of some overnight moral epiphany, but because of the omnipotent bottom line. No surprise here. The "food deserts" Wal-Mart wants to occupy lie on top of deep reserves of customers.

That could still be a net positive (even if one reached for self-serving reasons) if the grocery chain would actually end food deserts in this country. 23 million Americans live today without access to healthy foods, and the prevalence of these food deserts is connected to the obesity epidemic sweeping across the nation.

And whatever they might promise, Wal-Mart is hardly in a position to solve the problem. In fact, the mega-retailer is part of the problem. Sure, they promise consumers the lowest price possible. But there's another price we all have to pay. To drive costs down, the American food system has centralized over the past 50 years. Small family farms have conglomerated into multi-million dollar agribusiness operations. The endless streams of commodity meat and grain pass through only a few major processors. The food marketing giants control the TV streams and what ends up on our supermarket shelves. In short, we've earned lower prices, but at the cost of consolidating the entire system in the hands (and pockets) of a few corporate food giants.

This consolidation is a major problem. The major food distributers will only service major retail outlets, so the mom-and-pop grocery stores of yesteryear drift away like tumbleweeds on derelict family farms.

The picture is grim.

Wal-Mart's business model only works when it produces profits. No surprise here, either. But the question remains: Can our communities really depend on the five-year profit projections of huge corporations? Suppose Wal-Mart decides that urban centers in the U.S. are not as profitable as expansion in China or Brazil or India. We're back to where we started.

More important, as Wal-Mart's experiment unfolds, it will almost certainly smother grassroots programs and businesses across the country that are already churning out innovative ways to feed underserved urban communities. Just last year, locally owned YES! Organics Market opened up in Ward 8, a historic move that signaled progress to bring healthy food to D.C.'s poorest ward. D.C. Central Kitchen just launched Healthy Corners, an innovative program that delivers local produce to corner stores across the city. Participating retailers are touting unprecedented sales since stocking their shelves with fruits and vegetables.

The story heard around the world is that Wal-Mart mercilessly crushes its competition; for every two job it creates, three are lost in the exchange. The all-inclusive megastores cut hair, change tires, pump gas, and oh yeah, sell food too, at a discount made possible through ruthless pressure on suppliers to cut costs. Every hair salon, mechanic shop, and gas station is threatened. As are the local grocers that are rooted in the community they serve. Empowering these local retailers to buy food from local farmers is certainly the most sustainable path ahead. And then we can tackle rural economic development and urban food access at the same time.

Unless we really want Wal-Mart sitting at the dinner table.