Posted by David Price January 29, 2018

Nuestra Comunidad recently hosted a community meeting in Roxbury to introduce the Good Food Markets supermarket to neighbors.  Based in Washington, D.C, Good Food Markets plans to open at Nuestra and Windale Developers’ Bartlett Station in Dudley Square.  Neighbors peppered the supermarket team with questions about food selection, quality, market research, pricing and jobs.  The lively and productive conversation revealed deep agreement among everyone in the room on the importance of three things:  community engagement; making healthy food purchasing affordable; and local hiring at good industry wages combined with career-building.  These three agreements happen to correspond to three economic development strategies that supermarkets like Good Food Markets can bring to neighborhoods like Roxbury, helping make them communities of opportunity and equity.  There are enough proven successes of supermarkets driving community development and health, such as Vicente’s in Brockton Massachusetts, to make these strategies of interest to communities across the U.S.

In this post I present the underlying health and market conditions creating a need and opportunity for supermarkets in our neighborhoods; the three strategies of engagement, affordability and local hiring as used by Good Food Markets; and the importance of good business planning for supermarkets’ long-term sustainability and community impact.

Food scarcity and supermarket scarcity.  Many low- and moderate-income communities like Roxbury lack of access to healthy, fresh and locally produced foods compared to other communities.  A key component of low access to affordable healthy food is the preponderance fast food and corner stores with a low number of supermarkets.  Together healthy food scarcity and supermarket scarcity are social determinants of health helping create poor health outcomes and racial health disparities in communities like Roxbury.  These include disproportionately high rates of diabetes, heart disease, obesity and high blood pressure.

Numerous studies document unequal access to supermarkets and identify that as a cause of low access to healthy food in Roxbury and resulting poor health outcomes.  In 2017 a Boston Globe article highlighted this problem, citing a Massachusetts Public Health Association report which identified Roxbury as a low grocery access neighborhood. A 2013 “health impact assessment” of the Dudley Square area determined that a grocery at Bartlett Station offering fresh, health and local foods will have a positive impact on the “Access to Healthy Affordable Food Pathway”.

Proven market opportunity.  The scarcity of supermarkets in neighborhoods like Roxbury is not caused by low spending power.  Big chain supermarkets could locate in Roxbury and make a profit, but they choose not to, believing they can make higher profits elsewhere.  Here’s a summary of the market research revealing an opportunity for new supermarkets in Roxbury.  Demographic data showing that each year residents spend $33 million at grocery stores outside the community (a phenomenon referred to as “leakage”).  In other words, Roxbury has a wealth of grocery spending power, but due to supermarket scarcity it is spent elsewhere.  In 2012 Boston’s planning agency commissioned a Roxbury consumer survey of 1,300 people, finding that residents most frequently shop at supermarkets outside of Roxbury.

Nuestra commissioned two market studies by an experienced national grocery consultant which concluded that a small-format supermarket like Good Food Markets focused on healthy foods is economically feasible in Roxbury.  The studies noted that in addition to opportunity represented by $33 million in annual leakage spending by residents, the store can draw workers in Dudley Square and commuters passing by the store on busy Washington Street (1,500 cars/hour during evening rush hour). The market studies concluded that existing supermarkets such as Tropical Foods can easily co-exist with one or more new stores and potentially together could make Dudley Square a food destination.  Offering shoppers multiple grocery choices aligns with how many people shop for food today, visiting a handful of stores each week to buy their favorite items from each.  So the market research shows there is plenty of opportunity in Roxbury for a small supermarket like Good Food Markets.

How can Good Food Markets effectively use this market opportunity and avoid the pitfalls facing businesses expanding to new locations?  This is where the three proven economic development strategies come into play.  Good Food Markets is strongly-positioned to successfully implement these strategies and achieve long-term sustainability.

Strategy 1: Engagement.  A locally-focused store must engage successfully with neighbors as part of its business model.  Good Food Markets exemplifies this approach.  The store has worked for over a year to build relationships with local food advocates, local farmers and local makers of manufactured foods.  Looking at the big picture, Good Foods Market hopes to be an engaged member of a vital healthy foods ecosystem across Roxbury with these stakeholders.  Long before opening, the store will hire from the neighborhood a community engagement manager charged with continuing these conversations and engaging many more stakeholders and residents around their desires for a new supermarket.  During operations, Good Food Markets focuses intently on customers, for example, offering immediate changes to store products based on customer’s verbal requests.  Convenient store hours, special events and street marketing are a staple of their approach. At a restaurant/café in the new Bartlett Station store, residents can bring their families for casual dining or just hanging out.

Strategy 2: Making healthy buying affordable.  Pricing is often an obstacle to buying health foods for low- and moderate-income families.  Stores like Whole Foods offers lots of organic products but at very high prices.  Locally-focused small stores like Good Food Markets have devised strategies to make healthy foods affordable, offering a range of discounts to customers with specialized discounts for seniors and SNAP recipients.  (SNAP is Massachusetts’ food stamp program, the Supplemental Nutrition Assistance Program.)  Affordability has to combine with education to make healthy foods more accessible.  Partnerships with local schools can draw in students to learn about the food system and how to buy healthy foods.  Young children informed by these visits often recruit their families to buy and cook healthier foods.  Cooking classes in the store’s teaching kitchen can help folks build their healthy food culinary skills and confidence.

Strategy 3: Jobs and careers.  Good Food Markets is committed to filling at least 80% of its jobs from the local community, starting with the community engagement manager.  As with its other locations, the store will begin wages above minimum wage.  In Washington, D.C., Mayor Muriel Bowser announced the District’s plan to step up the minimum wage to $15/hour in front of Good Food Markets, a leader in this effort.  Good Food Markets is a “don’t check the box” employer, hiring without asking about prior involvement in the criminal justice system.  The store is committed to developing careers, not just providing a job.  Employees have access to trainings and certifications that allow for raises and promotions internally and jobs elsewhere in the food industry.

Sustainability.   Using the strategies of engagement, affordability and local hiring, stores like Good food Markets can launch successful small supermarkets where big chains won’t.  But sustaining these sores over the long-term requires another component, good business planning.  Fortunately, Good Food Markets has done its homework.  The store has produced a strong business plan including market analysis, multi-year projections and financing strategy, incorporating the market studies and demographic research cited above.

The role of Nuestra in evaluating commercial sustainability is essential in judging the long-term prospects of Good Food Markets and any other business opening in our properties.  We care deeply about successful business outcomes for Roxbury.  Nuestra owns 80,000 SF of commercial space and for decades has evaluated and underwritten businesses seeking to operate in our space.  We closely monitor local retail market conditions and have studied recent retail leasing successes and failures in Dudley Square.  Our conclusion is that Good Food Market has a strong business plan and can succeed at Bartlett Station.

Thanks to this thorough business planning, lenders and investors have committed to financing the new location at Bartlett Station.  These include Boston Medical Center, who is investing $1.4 million in no-interest debt and grants into the store, and the Massachusetts Housing Investment Corporation, who will invest New Markets Tax Credits equity.  The Massachusetts Healthy Neighborhoods Equity Fund, a joint venture of MHIC and the Conservation Law Foundation, has already invested $2.9 million in the Bartlett Station building housing the Good Food Markets store.  Bank of America and the Local Initiatives Support Corporation have funded substantial commercial reserves to ensure long-term sustainability.  The Massachusetts Department of Agriculture Resources is funding equipment for Good Food Markets, and a U.S. Department of Health & Human Services’ Office of Community services grant also supports the store’s buildout.

Good Food Markets will use engagement, affordability and local hiring to achieve a store opening at Bartlett Station by early 2019.  To stay up to date on the progress of the Bartlett Station Good Food Markets, please email the store at: info@goodfoodmarkets.com.   I’ll be updating progress on the store and Bartlett Station on Twitter; follow me @nuestradavid.

Sources

Good Food Markets: Presentation to the Dudley Square Community, January 23, 2018, available here.

Felice J. Freyer, “Want healthy food? In much of Mass., it’s hard to get”, Boston Globe 5/3/17 at https://goo.gl/fBKgwP citing Mass Public Health Association Study (cited and defined below)

“Massachusetts Food Trust Program: Lack of Grocery Store Access in Massachusetts,” Massachusetts Public Health Association 2017 (“MPHA Study”) at https://goo.gl/jXtfJT

“Lack of Grocery Store Access in Suffolk County, MA” map showing low access in Roxbury, included in MPHA Study at https://goo.gl/pDtizP

“Transit-Oriented Development and Health,” study issued by Massachusetts Department of Public Health, Metro Area Planning Association and Conservation Foundation examining health impacts of Bartlett Station and two other Roxbury TOD projects, September 27, 2013, at https://goo.gl/qwregZ

Demographic report with gap demographics identifying leakage spending, CBRE/Grossman Associates 2013 commissioned for Bartlett Station

Mari Gallagher Associates, Grocery Market Analysis: Bartlett Place June 4, 2013 and Summary Update published March 2016, available here.

Dudley Square Retail Survey: Dudley Vison Project, sponsored by Boston Redevelopment Authority, conducted by Fine Point Associates LLC, Peg Barringer, Project Director (2012)

Howard Stein Hudson, “Bartlett Place Preliminary Transportation Assessment” (2013)

Karen Morales, “Dudley Planning Focuses on Jobs: Residents question developers on businesses slated to move in”, Bay State Banner 1/10/18 at goo.gl/5ZeyfB (David Price quoted on jobs commitments by Good Food Markets)