Merchant Innovation

Retail Grocers Struggle To Crack Food Deserts

Though there’s been a significant push toward healthy foods and lifestyles in recent years, the fact remains that a large portion of the U.S. still lives without easy access to fresh fruits and produce. According to data from DoSomething.org, close to 24 million Americans currently live in communities without neighborhood grocers, regular farmers’ markets or even supermarket chains with produce sections.

This vacuum hasn’t gone unnoticed by retailer grocers. In fact, Walmart began targeting food deserts as potential targets for expansion, and in early October, the company announced that it had hit a previously set goal of opening at least 275 more stores in food deserts by 2016. Michelle Gloeckler, executive vice president of Consumables and Health & Wellness at Walmart, expressed the retailer’s commitment to providing higher quality food in critical areas.

“There is one thing we can’t put a price on and that’s the health of our customers,” Gloeckler said. “We realize we play an important role in making health care available to millions and helping millions put healthy meals on the table. This is a responsibility we take seriously. From managing diabetes to running your first 5K and simply putting a healthy dinner on the table, we’re equipping our customers with solutions for total health management which spans from nutrition, fitness, preventative care and treatment.”

However, opening new stores that happen to stock fresh fruits and vegetables does not necessarily guarantee that consumers in food deserts are going to change their long-held dieting habits overnight. Moreover, a recent study conducted by researchers at the University of North Carolina at Chapel Hill and published in the American Journal of Preventative Medicine, claimed that the ratio of calories from processed and pre-packaged food products purchased from warehouse stores, mass merchandisers and convenience stores increased 17 percent from 2000 to 2012 to climb to 40 percent overall. Moreover, the products offered at the larger retailers were contained on average more sugar, sodium and saturated fats than those offered by smaller grocers.

“We can’t assume that because a store is bigger and stocks healthy and unhealthy products, that [people] are going to choose the healthy products,” Dalia Stern, lead author of the study, told NPR.

That’s a problem for retailers. The fresh produce market is still a potentially lucrative sector, and a 2014 report from Leatherhead Food Research pinned the global market value for food products with functional health benefits at $43.27 billion. Organic foods alone generated $42 billion in sales in the U.S. in 2014, according to Statista. Market values should be the only attractive elements about fresh produce for retailers, though – Nielsen’s 2015 Global Health & Wellness Survey found that 88 percent of the more than 30,000 consumers who participated online said they are willing to pay more for foods that are made with healthier ingredients and better for them.

So what can account for this perceived desire for widespread access to fresh foods, yet the lack of consumer action when large retailers like Walmart move into food deserts? James Russo, senior vice president of Global Consumer Insights at Nielsen, told Forbes that sometimes, consumers don’t quite know what they want from their diets.

“There’s always a bit of a disconnect with consumers,” Russo said. “As it relates to diet, however, there is an aspirational component, and that’s consistent. But there’s a balance, too.”

Could drawing on this aspirational aspect of eating healthier help retail grocers perform better with produce products in low-performing areas? It has certainly been tried before, but with so much revenue and so many public health benefits on the table, it would be a waste not to try.

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