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Why is Michelle Obama’s food initiative promoting Walmart?

| Written by Stacy Mitchell | 6 Comments | Updated on Jul 22, 2011 The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/why-michelle-obama-s-food-initiative-promoting-walmart/
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This article originally appeared in Grist

I winced yesterday when James Gavin, chair of the Partnership for a Healthier America, said he’d like to see Walmart double its U.S. store count. He was speaking at Michelle Obama’s event announcing that several retailers will open stores in “food deserts.” It was a sort of half-jokey remark, but, still, in a conversation about food in America, the suggestion that Walmart should have an even bigger role in our food system is pretty disturbing. This is a company that already captures 25 percent of grocery sales nationally and more than 50 percent in some metro areas.

It’s remarkable the way Walmart has managed to maneuver itself on this issue. If you were to rank the factors that have contributed to the disappearance of neighborhood grocery stores over the last two decades, Walmart would be a pretty formidable contender for the top spot. Today it is garnering heroic headlines for saying it will bring fresh food to places that lack it.

Those headlines could not be more valuable to Walmart right now. The chain has staked its U.S. growth strategy on expanding into big cities, like New York and Washington, where many people believe in ideas contrary to the company’s vision, like a middle class and living wages. Walmart sees underserved neighborhoods as potential points of entry, a way to edge around the opposition and get its camel’s nose under the tent.

Michelle Obama’s event did make some mention of independent grocers, but as an afterthought that had little impact on the Walmart-centric news stories that followed. After Gavin touted the promises of three big chains — Walmart, Walgreens, and Supervalu’s Save-A-Lot (how is it that no unionized supermarket chains were included?) — to open or remodel stores “in or near” underserved communities, he went on to mention commitments by three independent retailers.

Independent grocers should have been at the center of this announcement. After all, independent food retailers, including co-ops and farmers markets, have been instrumental in the success of the only program so far to make a real dent in the problem, the Pennsylvania Fresh Food Financing initiative. Of the 93 stores created or expanded by the initiative to date, almost all are independently or cooperatively owned.

Nevertheless, when the USDA published the government’s official map of food deserts earlier this year, it defined a food desert as a place that doesn’t have a major supermarket chain or a large grocery store(i.e., more than 50 employees and $2 million in sales). I guess that means my neighborhood greengrocer, which sells everything you need for a real meal and isn’t inflated by aisles of potato chips and soda, doesn’t count. It’s one of more than 1,400 small, independent food stores that have opened in the U.S. since 2002, one of the real bright spots on both the local food and Great Places fronts. Too bad Michelle Obama decided to pump up Walmart instead.

This is about more than food access, of course. It’s also about economics. These neighborhoods need more than poverty-wage jobs. They need ownership and the economic benefits that come with it. Studies estimate that only about 15 cents of every dollar spent at a Walmart store stays in the local community. That’s a big outflow of wealth for a poor neighborhood. Locally owned grocery stores return about three times as much on average to the neighborhood. That’s because they employ more local people (no corporate headquarters staff somewhere else) and they buy more services, like accounting and printing, from other neighborhood businesses.

Put another way, local businesses help to build a local economic ecosystem, where resources circulate and multiply. Walmart is a more of a colonizer, extracting wealth for its own benefit.

The farm economics are critical too. My neighborhood grocer has the flexibility to source from lots of local producers — not just farmers, but also a plethora of cheese-makers, hot-sauce producers, yogurt makers, and so on. Walmart’s centralized distribution system, run from Bentonville, Ark., is pretty easily gummed up if one of its stores carries any more than a couple of token local products.

Walmart’s dominance on the retail end of the supply chain has in fact led to more concentration, rather than diversification, of food production. Research has found that it’s spurred even more consolidation among processors, prompted bigger and more industrialized farming, and kept more of our food dollar for itself, reducing the share going to farmers.

Not allowing Walmart to expand any further would be one of the best things we could do for the future of food. Heaven help us if, riding in the White House limelight, it manages to double its store count and its market power.
 

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About Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance, and directs its Community-Scaled Economy Initiative, which produces research and analysis, and partners with a range of allies to design and implement policies that curb economic consolidation and strengthen community-rooted enterprise.  She is the author of Big-Box Swindle and also produces a popular monthly newsletter, the Hometown Advantage Bulletin.  Connect with her on twitter and catch her TEDx Talk: Why We Can’t Shop Our Way to a Better Economy. More

Contact Stacy   |   View all articles by Stacy Mitchell

  • Goetz Wolff

    Should we be surprised? Only if we don’t realize that corporate America is the "real owner" of our society.

    I value the New Rules Project as one of the few organizations that unveils the nature of Wal-Mart.

    But we need to act upon these revelations, analyses. Only if we have a concerted movement, a social movement, can we PUSH leaders in new directions.

    Stacy’s point about the absence of union stores in the list of "partners" is indicative of both the exclusion of unions, and perhaps, the failure of unions to force themselves into this initiative.

    There’s no magic bullet. this is a struggle in which we can be outspent…but, if we organize PEOPLE we may be able to redirect such programs.

  • Colorado

    Stacy is so correct in her article. Farmer’s Markets are making a huge return in some areas of the country, mostly in cities.
    Mrs Obama herself spent a fortune in security people going to a farmer’s market — why isn’t she promoting these? This
    is a direct farm to consumer fresh produce avenue – it’s excellent for farmers’ profits and for consumers without as the previous
    commentator said having isles of potato chips, soda. The fresh produce, cheeses, whole grain bread look so beautiful and
    appetizing at farmers markets. This current administration is doing an about face in his promised policies for which we voted him in.

  • Anonymous

    I agree with Stacy’s comments “It’s remarkable the way Walmart has managed to maneuver itself on this issue. If you were to rank the factors that have contributed to the disappearance of neighborhood grocery stores over the last two decades, Walmart would be a pretty formidable contender for the top spot. Today it is garnering heroic headlines for saying it will bring fresh food to places that lack it”.

    We are over-stored with an explosion of products displayed in an ever-increasing amount of retail square feet per capita in the U.S. Increased size leads to increased efficiencies that in turn fuel additional growth. Small retailers are left to scramble for the remaining market share. Further, the market has become global with the Internet blurring the lines of traditional market areas.

    The evolution of alternate formats such a Walmart* and BJ’s forced suppliers to develop “different go to market strategies” such as “more affordable products” different price list (lower) and I am sure this will now include wellness products at a better cost of goods too… Bottom-line Independent Retailers are not able to optimize their competitiveness.

    This too is unfortunate as Independent Retailers and local co- ops already have the critical mass in place (more stores today) to drive “Michelle Obama’s food initiative”. They too need tiff or stimulus funding to make it happen. Perhaps Washington should incent manufacturers’ to create a different go to market strategy for the Independent Retail class of trade so they can compete on a more level playing field too….

    I feel strongly that small business PEOPLE need to be united in way for which they are not today…They need to connect to industry professionals and work to help each other deliver sustained business solutions on improving mutual businesses.

    They need to collaborate and analyze the existing retail competitors and new potential store threats, evaluate how the current competing businesses react to change in the industry leverage data along with our extensive insight on consumer trends. From here develop precise business strategies by anticipating consumer responses before big box stores open, not react after they open… Optimize marketing and promotional strategies that continually generate profitable sales growth that will improve bottom line equity for all vested parties (Retailers and Suppliers).

    The inherent problem we have as country is everyone is talking or reporting on what is wrong but not offering sustainable solutions (excluding your association from this statement). Real change is needed otherwise we will continue to see Independent Retailers and Co- op go contune to out of business…

  • Anonymous

    UGH. Why can’t those of us who care about things like living wages and environmental responsibility form a movement to rival the Tea Party?? Why is it so difficult to get people riled up over something that would actually work in their own favor, rather than lining the pockets of millionaires? Maybe we’re being too logical and using too many facts and figures? I look at left-leaning political ads, and it’s like we’re too afraid to actually say what we mean. It’s like they’re weak and ineffectual on purpose. I think we’re at the point where Populist sentiment is WAY overdue!

  • http://www.lefthippub.wordpress.com Allan Shore

    Love this piece and your uncovering the truth. I have been working on a project idea for some time trying to fundamentally change the nature of the food industry, literally working the voice of consumers into the menu of opportunities for healthy change. So far, of course, no one is biting. But here’s what I think: money is the unhealthy food issue. Thus we go after the small, fast money, not the small, Slow Money of the industry to bring about change. In Burgers Against Obesity, we develop a collaborative of people and groups to make the fast food businesses want to tag on to each purchase an extra nickel. Logos and fancy commercials tell customers who is participating. That extra nickel is then automatically and electronically transferred to a community nonprofit food empowerment organization, who then uses the money to empower discussions, negotiations, new models of fast food between the merchants and the families who are now getting fat and unhealthy. As a result, for each purchase, more money for change is generated. And smart business owners would figure out how to promote their civic commitment, yet they could not control the nickels. Now the reason we go this anti-nickel and dime approach is because it generates enough money to counter corporate influences. If a large sector of the fast food and other food industry participated, we would generate an estimated 200,000,000 nickels for progressive change – oh, that’s 200 million nickels EACH AND EVERY DAY OF THE YEAR! I call my project http://www.NickelaMeal.wordpress.com. What think?