Report: Inner-City Supermarkets Can Turn a Profit Using Free Shuttle Service

SACRAMENTO, Calif. - Inner-city supermarkets can improve their profit margins and the health of the communities they serve by offering shoppers free transportation, according to a report released yesterday by researchers at the UC Davis Center for Advanced Studies in Nutrition and Social Marketing. A free shuttle program also reduces shopping-cart thefts.

"It's a way for supermarkets to do well by doing good," said Diana Cassady, assistant professor of epidemiology and preventive medicine and senior author of the report, funded by the California Nutrition Network.

Cassady and her colleagues conducted a market analysis of low-income neighborhoods in five California cities -- Bakersfield, Fresno, Long Beach, Oakland and San Diego (a list of zip codes follows) -- and concluded that a supermarket-sponsored shuttle service would be financially viable in any of the areas. Depending on the area, estimated annual shuttle-driven revenues per zip code ranged from $545,700 to $1.5 million. The estimates assume that 20 percent of households without cars in each study area would use a shuttle once a week to buy $25 in groceries.

"We hope these findings will encourage more inner-city supermarkets to provide shuttles," Cassady said. "Residents of lower-income and minority neighborhoods in many urban areas face a double bind that limits their access to fresh, healthy food, especially fresh fruits and vegetables. Not only are full-service supermarkets scarce in many inner-city areas, but many residents of these areas lack cars to get to supermarkets in other parts of town."

Among people earning less than $15,000 a year, only one in four eats the recommended five or more daily servings of fruits and vegetables, according to data from the California Department of Health Services. Nearly half the African-Americans in California eat two or fewer servings per day.

The "grocery gap" in inner-city neighborhoods has long been of concern to public health experts. A 1995 study of 21 major metropolitan areas nationwide conducted by researchers at the University of Connecticut found a third as many supermarkets in low-income areas compared with high-income areas. Last May, a study by the Center for Food and Justice at Occidental College found three times more supermarkets per capita in high-income Los Angeles neighborhoods compared with low-income areas.

The supermarket industry cites higher security costs, greater employee turnover and a bigger "shrink factor" (theft) in high-poverty neighborhoods. According to Cassady, loss and retrieval of shopping carts -- often used as wheels by people without cars -- can cost a small grocery-store chain $300,000 a year.

For shoppers, the grocery gap means traveling to another part of town to find a supermarket, or buying groceries at a small convenience store that may offer a poorer selection at a higher price. For residents without cars, the situation is especially tough.
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