Wednesday, July 11, 2007

Detroit: The Supermarket Desert

Detroit -- The lack of major grocery stores has long been a quality-of-life problem in Detroit and one reason some families don't want to live in the city. Now, however, the situation is getting worse as the last two Farmer Jack stores in the city prepare to close by Saturday.

If no grocery stores buy the Farmer Jack locations from the Great Atlantic & Pacific Tea Co., Detroit will be left without a single national chain supermarket, much less a Wal-Mart or Meijer superstore or a Costco-style warehouse store.

Analysts say no other major city in America is such a supermarket desert. And it's not likely to change anytime soon.

Top 10 Reasons Retail Chains Stay Away from Detroit:

1. Profit margins at supermarkets are 1-5%. If shoplifting by customers and employees runs 7-8%, the store is doomed to lose money.

2. High cost of maintaining security for the stores, something most suburban locations don't need.

3. Shopping carts often disappear, at a cost of $300 per cart.

4. Personal safety for employees, with robberies, thefts and assaults both inside and outside the stores.

5. Difficulty finding qualified managers willing to run Detroit stores. Most prefer the suburban locations.

6. Problems seeking qualified workers for the stores. It can be a major undertaking to find employees who can pass reading, writing and math tests along with credit, criminal background and drug tests.

7. And there is a constant turnover of employees at stores in the city. "Its a human resource nightmare," said David J. Livingston, a supermarket expert from Wisconsin.

8. Declining population. No national chain wants to move into an area that is losing population.

9. Lower per-capita income. That means less expenditure on food.

10. Racism and discrimination accusations. If the store raises its prices because of higher costs of doing business, it is often charged with gouging minorities and the poor.

Update: As
Peter Klein points out, shouldn't anti-Wal-Mart groups like Wal-Mart Watch and Wakeup Wal-Mart now be celebrating, and claiming that Detroit residents are much better off without "greedy, community-destroying" Big Box retailers like Wal-Mart?

11 Comments:

At 7/12/2007 6:46 AM, Blogger juandos said...

How soon will Jesse Jackson and Al Sharpton be calling the media for a presser to decry the racism of A&P?

 
At 7/12/2007 10:09 AM, Blogger happyjuggler0 said...

Wait a minute. WalMart won't open up in Detroit? How dare they! We should boycott WalMart for not serving poor urban neighborhoods. These neighborhoods need low priced goods and services, how dare they deny the people their stores!

Oh wait. We're supposed to try to prevent WalMart from opening up in poor urban neighborhoods. I'm so confused....

Cough.

The problem as I see it is a lousy attitude on the part of Detroit as a whole, and Michigan in general as well. Instead of saying your gain is my loss, therefore I'm going to try to take all your profits, which is what unions and government are trying and succeeding at, a much more sensible attitude is win-win.

No profits equals no jobs, and no goods and services. Low wages means there is a lack of job supply relative to demand, and thus anyone who hires low wage employees should be treated as a saviour to be encouraged, not a villain to be discouraged.

"But what if all employers took that attitude, wages would be bid down in a race to the bottom right?" Not. If "everyone" had the idea that low wage employees were a good and profitable thing to find and organize their business around, then the demand for them would be so huge that unemployment would shrivel to nothing. At that point the only way to hire someone is to hire them away from somone else. Thus bidding up wages, not "bidding them down", as if such a thing were possible.

More demand for employees equals higher prices for labor (i.e. wages) than otherwise. Or in the case of a locality where the government is screwing things up badly and therefore there is high unemployment, then more demand for employees equals a lower unemployment rate than otherwise.

WalMart and its ilk are therefore the good guys, and people that oppose them are the bad guys, regardless of intent on either party's behalf.

 
At 7/12/2007 4:27 PM, Anonymous Anonymous said...

I don't buy most of the arguments for why there are no grocery stores in Detroit.

If profit margin is a problem, then just increase prices. A similar solution can solve the labor shortage as well.

The answer must be that shoppers would prefer to shop in the suburbs, or there is some alternative shop (such as 7-11) that outcompetes the potential grocery stores.

I suspect that Detroit has anti-WalMart "poison pills" like parking spaces per square footage or other issues keeping WalMart out of Detroit.

WalMart is pretty hardcore, they can compete pretty much anywhere that government doesn't stack the deck against them.

 
At 7/17/2007 7:52 PM, Anonymous Anonymous said...

Harper's Magazine for July said that many people in Detroit are now growing their own food, in areas that have been pretty much abandoned by whites quite awhile ago.

They've even started thinking of selling nice, fresh produce to the suburbs.

That would really irritate the righties who want to push deadly food, toys and toothpaste from China through Walmart on those who still live there, so the Walton family can make more billions.

 
At 7/17/2007 7:56 PM, Anonymous Anonymous said...

juandos said...
"How soon will Jesse Jackson and Al Sharpton be calling the media for a presser to decry the racism of A&P? "

Well we do know that the whitie righties are already caterwauling about how mean people are to the multibillionaire Walton family!

And telling us that deadly food from Walmart's Chinese imports for Detroiters is just the thing they need!

 
At 7/17/2007 7:58 PM, Anonymous Anonymous said...

happy?juggler:

" I'm going to try to take all your profits, which is what unions and government are trying and succeeding at"

Are there any more far right catapulted propaganda gems you want to spew while you are at it?

 
At 7/21/2007 11:53 AM, Anonymous Anonymous said...

__Harper's Magazine for July said that many people in Detroit are now growing their own food, in areas that have been pretty much abandoned by whites quite awhile ago.___

Now that is interesting. I can just see acres of abandoned intercity property planted in corn and yams by the residents. Now to solve the housing shortage in Detroit with mud huts with thatched straw roofs.

 
At 7/21/2007 3:52 PM, Anonymous Anonymous said...

The supermarket problem in Detroit is simple to understand but many are afraid to say. It is the people whom live there that are the problem and the overwhelming majority are black. Call me racist if you want but I'm just stating the obvious.

 
At 7/23/2007 8:06 PM, Anonymous Anonymous said...

Face it, a sub race like the Negro simply can't maintain an economy - their natural tendency for violence, low intelligence and steal everything attitude dooms anything like a supermarket. Stupid early Americans should have made Swedes slaves and imported them instead.

 
At 7/29/2007 9:07 PM, Anonymous Anonymous said...

I guess where Africans go, Africa follows?

 
At 10/15/2007 6:24 AM, Anonymous Anonymous said...

Perhaps a government food co-op might work---with the city providing needed security. If the market is unable or un-willing to act---in a situation providing life essentials to such a large group of people----the government should.

 

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