
How supermarkets choose where to open and close - Mz
https://www.theguardian.com/cities/2015/feb/11/how-supermarkets-choose-where-open-close-tesco
======
roymurdock
Summary: Supermarkets open and close based on profit per square foot.
Therefore they close in poor neighborhoods and stack up 3 or 4 deep in wealthy
neighborhoods.

The author calls for some type of regulation on supermarkets or "the control
of food supply". For example rules that chain stores provide evidence they are
appropriate for the income level of the neighborhood, as in San Francisco.

"Until then, the food supply of UK cities – and the character of our
neighbourhoods – will be subject only to the law of which supermarket
locations are most profitable per square foot."

This is related to the "food desert" phenomenon cropping up in the US. Haven't
heard much being done on this front:
[https://en.wikipedia.org/wiki/Food_desert](https://en.wikipedia.org/wiki/Food_desert)

~~~
nostromo
The food desert theory has largely been dismissed as a _cause_ for poor
eating, and are rather the result of consumer choices.

[http://chicagopolicyreview.org/2015/10/26/if-you-build-it-
th...](http://chicagopolicyreview.org/2015/10/26/if-you-build-it-they-wont-
come-why-eliminating-food-deserts-wont-close-the-nutrition-gap/)

> For low income and education households, the most publicized reason that
> people eat poorly is that they do not have access to healthier options.
> Media coverage of efforts to combat nutritional disparities has focused
> primarily on efforts by grocers like Whole Foods to open stores in
> underserved neighborhoods. However, according to the study by Schnell et
> al., policy initiatives focusing on increasing access to nutritious food
> will only solve a small portion of these nutritional differences.
> Controlling for income level, the study finds that differences in access
> only explain 10 percent of disparities in consumption across education
> groups.

> Furthermore, the study finds that households do not strongly respond to the
> entry of new stores into their geographic area, even though they are aware
> of the addition of new stores. When households change the mix of stores they
> visit once a new store is introduced, the researchers do not observe a
> lasting change in the nutritional value of their purchases.

~~~
KGIII
I always get a chuckle about people saying area in cities are food deserts. A
food desert is somewhere you can't get delivery, tacos from a taco truck, or a
pizza from anywhere but a convenience store.

Nunavut is a food desert. Pickle Lake is a food desert. I live in a food
desert. If it is ten blocks to a Safeway, it's not a food desert. If you can
call and get delivery from three different types of ethnic food, it's not a
food desert.

Even where I live, 25 miles from a grocery store, there are all sorts of
choices. I have a whole wilderness full of game and have pretty much finished
harvesting my garden. I've been in cities around the globe, and the only ones
I've seen that are worthy of the title are hugely impoverished and probably
not far from a war zone. I have seen poor people in cities who can't afford
much food, however.

~~~
Spooky23
I grew up in a place like you. The difference is that you have a car.

I live in a small city now. I’m a quick drive or walk (10 blocks) to a small
grocery store with limited selection and higher prices that mostly caters to
students. Most shopping gets done in supermarkets outside the city... 10m car
ride or 30 minute bus ride.

From the inner city area, that’s usually a 90 minute bus ride that runs every
45 minutes. Poor people don’t work 9-5, so they buy most food at bodegas at
inflated prices. Stuff like produce is rarely available, unless Kure lucky to
be near a Chinese market.

~~~
KGIII
Yeah, that's a food inconvenience and certainly a problem. It seems not very
desert-like, at all. It sucks, but it's not fight a hyena for your breakfast
suckage. It's not pretend to like fermented fish desert sucks It's not like
the delivery plane can only land every four months suck. It's hardly a desert.

~~~
objectivetruth
Your comment makes it sound like it's only an "inconvenience" as long as the
poor people aren't literally fighting animals for food, and their supply chain
is replenished at least quarterly.

Here's the definition that most of the rest of us use:

[https://www.ers.usda.gov/data-products/food-access-
research-...](https://www.ers.usda.gov/data-products/food-access-research-
atlas/documentation/)

The "convenience" factor in modern civilized society is compared to a baseline
of "suburban parent hops in the car, drives 5 minutes to a well-stocked and
affordable grocery store with plenty of nutritious options" and NOT compared
to "prehistoric hunter-gatherers on the verge of starvation."

~~~
Spooky23
The comment stands on its own.

“I have what my kids need, if you don’t, you should feel lucky that you aren’t
fighting wild animals.”

------
Noos
What's not stated is that "profitable" is still incredibly low. Supermarkets
often have an average margin of 1-3% unless they go the pricey organic/health
route, and it's natural they would seek every advantage to remain profitable.
They simply don't have as much leeway as other types of businesses to support
underperforming locations, even potentially.

Regulation won't work at all. It just would wind up reducing the amount of
stores overall, not force retailers to service poor neighborhoods. The only
ones that will price for the added risk organically and are "last resort"
retailers (bodegas), or are dollar store type chains, which generally sell
substandard product but at high enough margins to endure for a time.

Not much can be done. You can't legislate away numbers.

~~~
toomuchtodo
If you absolutely need a grocery store in a poor area that isn't sustainable,
you can form a co-op and then use government subsidies to prop it up.

We subsidize all sorts of "unprofitable" services that have a societal ROI
(libraries anyone?), no reason we shouldn't do it for grocery stores where a
for-profit entity can't make it work.

~~~
Noos
I don't think it would be possible to the scale needed. Well, not without
burdening already overburdened local economies. A library is one per town or
even region, and even they aren't really doing that hot despite being
subsidized. Trying to support a multitude of co-ops (and managing them to make
sure they actually are sustainable and survivable businesses) would seem to be
a nightmare.

I don't really know what the solution is. But it's not something like racism
or ignoring untapped markets, where it can be solved by regulation.

~~~
jlg23
> Trying to support a multitude of co-ops (and managing them to make sure they
> actually are sustainable and survivable businesses) would seem to be a
> nightmare.

On the contrary, the moment you create a big scheme like that all the large
supermarket chains will queue up. With all the mandatory paper trail we
already generate for every action involved, it boils down to.. exactly what
supermarket chains are doing:

* Central instance for management and purchases (the latter being optional for the "subsidized co-op"-model)

* resale to quasi-independent sub-entities ("supermarket" or "co-op").

* Individual stores of chains all use the same software already; for the co-cop scenario that could translate to a FOSS-offer (hard requirement being: however you do it, legal accounting principles apply).

I don't see a nightmare here, just a shift of terms and a slightly more
flexible ERP configuration.

~~~
tajen
I've already seen hipsters building a coop supermarket. The idea that
supermarkets jack up the prices, mistreat employees and blackmail providers is
widespread (whether true or not). Those friends want to do good to producers
and consumers alike and sidestep the "big evil companies".

So some attempts exist and it's a good idea if poor-neighborhood coops invent
better solutions than supermarkets concerning robbery and crime (only
registered customers? know-your-customer schemes? the-boss-is-my-uncle
effect?). However, I doubt they can have lower prices than supermarkets. Being
a coop doesn't absolve you from margins and risk management.

------
lr4444lr
My grandfather was in the grocery business. No mention of shoplifting rates,
vandalism, and the concomitant cost of insurance? We're not having an honest
conversation.

~~~
roymurdock
It's a good point but it's encapsulated in "profit per square foot" \- author
is talking about both revenue and the costs you mentioned.

------
OscarTheGrinch
Mingy little versions of supermarkets represent a contraction of consumer
choice.

The UK should just do away with silly no shopping on Sundays at large stores
because you really should be in church laws.

~~~
gsnedders
> The UK should just do away with silly no shopping on Sundays at large stores
> because you really should be in church laws.

*England (and Wales) and Northern Ireland

At least as far as English law goes, every time this comes up there's
typically enough opposition about people having time with family (and having a
day off coincide). I don't remember any discussion about church in decades. Of
course, the discourse in Northern Ireland may differ.

~~~
wil421
> people having time with family

In the US, this is code for day off for church. Chick-fail-a is a fast food
restaurant that uses this same reasoning for closing Sunday. The company is
widely known to have Christian values.

It was only a few years ago that my state, Georgia, allowed alcohol to be
bought in stores on Sunday. They still only allow it after 12:30, church gets
out at 12:15.

~~~
planteen
The general word for these laws are blue laws.

[https://en.wikipedia.org/wiki/Blue_law](https://en.wikipedia.org/wiki/Blue_law)

I live in Colorado and bizarrely buying cars on Sunday is prohibited. One
"nice" thing about this law is you can go walk a car lot on a Sunday without
getting bugged by sales people.

~~~
amyjess
> I live in Colorado and bizarrely buying cars on Sunday is prohibited.

IIRC, Texas has a weird law where car dealers can be open on either Saturday
or Sunday but not both.

~~~
ghaff
In addition to church, one of the drivers of regulations around weekend
closures is small businesses. The idea is that larger businesses can be open
whenever it's profitable to hire people to work. Whereas many small businesses
effectively require the owner to be present.

Not arguing for that position but I've heard the argument around opening on
Sunday. It's been a big shift in much of the US. In Massachusetts, almost
nothing was open when I was in school and Sunday retail alcohol sales are a
relatively recent thing. And there are still very weird alcohol-related laws
in some towns.

~~~
MrMorden
If a business doesn't have enough employees to open seven days a week, there's
nothing stopping them from picking the most profitable five or six. (Or, for
that matter, providing a product that's sufficiently better for your store to
do more business in six days than the competition does in seven.)

In the UK, small businesses (as implemented, by floor area) are exempted from
this particular blue law to give them an advantage. In practice, either they
don't take advantage of it to open for a reasonable duration on Sunday (or any
other day, for that matter) or they're too big and get screwed (as with the
independent grocery stores mentioned in this article).

------
tr352
I'm surprised that this article doesn't mention Hotelling's law
([https://en.wikipedia.org/wiki/Hotelling%27s_law](https://en.wikipedia.org/wiki/Hotelling%27s_law)),
which is a well known economic principle that explains exactly this
phenomenon.

~~~
TheSpiceIsLife
I like to encourage people to provide more information about a link.

From the referred Wikipedia article:

 _Suppose that there are two competing shops located along the length of a
street running north and south, with customers spread equally along the
street. Each shop owner wants to locate his shop such that he maximises his
own market share by drawing the largest number of customers. In this example,
the shop itself is the 'product' considered and both products are equal in
quality and price. There is no difference in product to the customers.
Therefore, each customer will always choose the nearest shop because there is
no difference in product or price.

Another example of the law in action or practice is to think of two food
pushcarts at a beach. Assume one starts at the south end of the beach and one
starts at the north. Again assuming a rational consumer and equal distribution
along the beach, each cart will get 50% of the customers, divided along an
invisible line equidistant from the carts. But, each cart owner will be
tempted to push his cart slightly towards the other, in order to move the
invisible line so that it encompasses more than 50% of the beach. Eventually,
the pushcart operators end up next to each other in the center of the beach._

------
pkamb
Seattle has a number of large grocery stores built in, I believe, the mid-90s.
Single story, no attached retail storefronts, and a big parking lot. Suburban
"strip mall" buildings but in the middle of reasonably dense neighborhoods.
(15th/John Safeway, 15th QFC, 15th Walgreens, etc.)

Today they'd be built as 5+ story housing + grocery store + 10 retail spots +
underground parking.

I've always wondered about the math of a store like that. Why aren't they
being turned, like every other single-story building in Seattle, into modern
mixed-use development? I'd _like_ to see it happen to these stores. No
problems with historic listings or beloved architecture. Is bringing the store
down for a year or two the primary hurdle?

~~~
thinkythought
I know in some areas a large part of this has been neighborhood opposition to
development/NIMBY stuff. For example a bunch of projects in Roosevelt,
including i believe one to redo the old QFC just off 65th were held up in
asinine arguments for years about how this kind of smart development would
"ruin the character of the neighborhood" and such. I remember this being an
issue with the rebuild of the Wallingford store as well, and probably others.

The only developments like this really going through that aren't just brand
new builds where no store previously existed are for example, the 23rd ave
Safeway, and the old Red Apple(which are fraught with their own gentrification
issues). Basically, it only really happens in POC or lower income
neighborhoods where there isn't super dedicated opposition, or where it will
just be ignored.

I do know for a fact that some stores, like the brooklyn ave Safeway, and the
two broadway QFCs basically barely make enough money after theft to stay open,
which might contribute to this. At least the latter two have retail/other
businesses within the structure, and the thomas st store has some apartments
as well in the back section...

~~~
pkamb
I'm probably a bit of a "development opposition" guy myself, coming from the
side of historical and architectural preservation. But I'd much rather have an
ugly new mixed used development than those _block long blank walls_ facing
15th from both the Safeway and the QFC. It's a pity if NIMBYism is stopping
even car-centric strip mall buildings from turning into something better.

------
k__
We had a tiny Lidl store for years, but suddenly the Lidl corporation changed
their minimal size for stores and closed it. Took half a year till a non-
profit opened at the place. They give jobs to disabled people, but are quite
expensive compared to the Lidl.

Well, guess I got gentrified :D

But it's shocking to see that even in one of the biggest cities in Germany
there are places where big corps won't sell. A few kilometers away is a street
with 4 super markets in 1min walking distance from each other...

~~~
kogepathic
_> But it's shocking to see that even in one of the biggest cities in Germany
there are places where big corps won't sell. A few kilometers away is a street
with 4 super markets in 1min walking distance from each other..._

I recall in Frankfurt Ost there was a Nahkauf (Rewe Group) not 300m away from
an actual Rewe, which considering they're the same company I consider kind of
silly. After some time they decided to close the Nahkauf, and now the location
is empty.

Or in train stations where there are 2 or 3 different Starbucks selling
coffee. Maybe they do this so they can capture the rush hour traffic, and the
rest of the day they have reduced staff? Never made sense to me to have them
so close together.

~~~
vertex-four
> Never made sense to me to have them so close together.

If there's multiple entrances/exits to the station, you want a Starbucks to be
every direction a person might choose to go, so they don't have to go out of
their way to go to a Starbucks - the whole point of Starbucks is that it's
more convenient to hop into one than to find a better coffee place.

~~~
k__
But what about 2 super markets from the same chain 100m apart?

I mean, I can understand that the city wants a few competitors in the street,
but the same store?

~~~
vertex-four
Usually that one's to do with supermarkets merging or buying out other shops,
IME. Or brand loyalty where the shops have different brands.

------
gxs
Interesting.

A quick search in the bay area seems to confirm, at least to some extent, the
article's findings.

[https://imgur.com/a/PwABV](https://imgur.com/a/PwABV)

I searched the east bay for Safeways. Rockridge, Piedmont, Montclair, Alameda
(all better off areas): check, check, and check.

If you see the area south of downtown Oakland all the way down to almost San
Leandro is completely devoid of all Safeways.

In my experience of driving through those areas, they are mostly served by
discount stores like FoodMax, Food4less, or other ethnic stores.

No real point here other than I checked what the article said and it seems to
jive with reality.

~~~
Macsenour
As I'm local to you, I'll add that a Nob Hill Foods is in Alameda, a higher
rent location, with a Foodmax on the Oakland side.

------
wink
> Brutal competition from discounters Aldi and Lidl is making life very
> uncomfortable for the big British grocers

I don't really get this paragraph. On a recent vacation in Scotland I found
Tesco to not be very top-end (that's also how I remember it from the 90s) - so
unlike Sainsbury it feels like a pretty low-end supermarket (or maybe mixed?
full-spectrum) and we have some of these "nearly discounter" chains in Germany
as well. FTR, I only visited Lidl once in Scotland, so can't comment. And I
also didn't really buy typical groceries, not cooking,e tc. Just random stuff.

TLDR: I'm very confused about which chain is supposed to be upscale or close
to being labelled a discounter.

Also, in Munich I tend to see a lot more normal supermarkets anywhere near the
city center than exactly Aldi and Lidl, because they tend to have bigger
stores, which are not so easy to come by.

------
Chiba-City
Cities are neighborhood places where people walk to work and carry groceries
home 4 nights a week. It works great for retirees who ditch their cars
entirely.

I live near the National Zoo in DC. We have a local Iranian grocer right off
Metro with a local organic chain right next door. There is no parking there.
Segregate any "venue" with parking vs. the alternatives. I also hit a nearby
Whole Foods for some items but they need giant underground parking lots for
their business models.

The notion that "everyone" is living on Taco Bell and delivery pizza is pure
nonsense. Our DC ethiopian and hispanic communities blossoming a short walk
away eat really well. They have nice markets where I sometimes buy jicama to
pickle. Some C++ template fu nerds also cook up a healthy storm. Recipes and
idioms apply everywhere.

------
ggm
Most peoples experiential sense of shopping is now informed by postwar
expectations. If more people alive today had experienced price controls and
rationing, I suspect their feelings about food would be different. I did not
experience rationing, I have only a sense of "food" as a product of
supermarkets existing, and their effect on the food supply chain. I was at the
tail-end of -grocer as a term of art for people who intermediated food.
Watching green- grocers go out of business in parallel with active choices to
eat seasonal food it is easy to make a syllogism "supermarkets destroy choice"
or "supermarkets make people eat worse" but its nothing like that simple. Its
cause/effect/correlation against a number of other things like the role of
sugar in diet, carbohydrates, prices of agricultural inputs, mega farming,
industrialization..

Yes, we see shops close everywhere. Yes, we see supermarkets concentrate in
high income areas. Yes, regulation is a nightmare but deregulation is also a
nightmare.

I don't know the answer either. Locavore is expensive.

