9/27/2011
By Brian Sozzi, Research Analyst

A food desert is a spot located in an economically sensitive urban setting where access to fresh, affordable food is hard to find.  Wal-Mart (WMT) brought the term into popular use months ago in its ongoing attempt to finally enter the NYC retail market and in announcing countless fresh food initiatives.  Since then, food desert has receded into the background, which we find interesting given the apparent hiccup in the economic recovery that began during the summer and continued rise in food stamps usage/poverty levels in the country.  Today, Walgreen (WAG) reminded us that food deserts are alive like a forest filled with evergreen trees, and demand attention by those retail chains that dominate the urban landscape (think Duane Reade, Rite-Aid, CVS, Walgreen, dollar stores).  Not only does adding access to fresh food in stores address a growing social issue, but of course it could serve as a means to pad profits; selection is often limited to high frequency branded items that carry a fatter price-point than the same products offered at a supercenter.  The retailer is essentially charging for convenience and the desire of economically challenged households to adopt healthier eating standards where appropriate.

Walgreen comment today:
* "The company also announced plans to convert or open at least 1,000 "food oasis" stores over the next five years to address the need for greater access to healthy foods in underserved communities across the country, building on its successful 12-store pilot in Chicago. "

Stats to Chew On:
* The United States Department of Agriculture reports that about 23.5 million Americans currently live in food desserts, including 6.5 million children. 

* According to change.org, 60% of New Orleans residents say they have to choose between buying food and paying utility bills.

* In Chicago, it is estimated that some 600,000 people live in areas that are considered food desserts, according to a report by Mari Gallagher Research & Consulting Group.

* According to Gallup, 26% of people in the Memphis Metropolitan Statistical Area said they couldn't afford to buy food for their families in the last 12 months.

Nine Worst Food Deserts in the U.S. (helpful link; includes pictures)

http://newsone.com/newsone-original/jothomas/americas-worst-9-urban-food-deserts/

Brian Sozzi
Wall Street Strategies

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