Could City-Run Supermarkets Fix Urban Food Deserts?

What Are Urban Food Deserts?

Grocery prices in the U.S. have risen dramatically over the past years. Rising labor costs, food price inflation, and commodity prices all did their part to make that happen. But Americans living in some areas face an even bigger problem: There aren’t any grocery stores at all.

Supermarket chains like Walmart (WMT) and Whole Foods (AMZN) are increasingly shuttering stores in underperforming neighborhoods, creating so-called urban food deserts. This phenomenon can exacerbate poor nutrition, obesity, and other health issues among residents, particularly in inner-city and low-income areas.

The Chicago Solution

In Chicago, several supermarkets shuttered last year alone. Food insecurity has become particularly prevalent in the South and West Sides of the city, contributing to a growing gap in life expectancies between Black and White residents.

But Chicago Mayor Brandon Johnson proposed a surprising solution to address the issue: city-run grocery stores. Supermarkets typically operate on slim profit margins compared to other stores and have little incentive to continue running unprofitable stores. The city wouldn’t have that same restriction.

Creating three government-owned storefronts across the city would cost Chicago nearly $27 million upfront, according to a report by advisory firm HR&A cited in Chicago Sun-Times reporting. But the report also concluded that such a project was both “feasible” and “necessary”.

Redefining the Approach

While several small U.S. municipalities have instituted similar policies, Chicago would be the first major city in the nation to do so. Unlike private sector solutions, city-run supermarkets are able to focus on positively impacting the local community, rather than only focusing on their bottom line.

As of 2022, more than 44 million Americans lived with limited food access, per U.S. Department of Agriculture data. If Chicago moves ahead with the plan, it could provide a blueprint for other cities to address the issue.

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