Kroger makes unusual donation to prevent a food desert
A single grocery store going out of business in an otherwise under-served area can cause big problems for a community. Recently in South Memphis, TN, Kroger made an untraditional move in a market to make sure a community it was leaving wasn’t stuck without a place to shop for food.
In the aftermath of a February store closure in Memphis’s Orange Mound neighborhood, Kroger began working with community groups to find a tenant to purchase the space, according to Newsweek. The chain reached out to 30 businesses, but could not find one that could afford the $500,000 building. In late September, Kroger donated the building to a competitor, eight-store regional chain Superlo Foods, so that the neighborhood would not be without a grocery store.
Lack of a willingness from other retailers to purchase the space was attributed to the location’s inability to produce the kind of margins a traditional grocery needs to survive. A 2015 study states that some of the zip codes in Memphis constitute the country’s poorest areas. Nearly 200,000 people in Shelby County —where the Orange Mound neighborhood resides — live in food insecurity.
This is not the first move Kroger has made to address the problem of food deserts. Earlier this year the chain announced the launch of Zero Hunger Mobile Mart in Louisville, KY. The Mobile Mart is a single-aisle grocery store on wheels that visits low-income neighborhoods, housing complexes, senior living centers, parks and community centers where groceries are not otherwise easily available. The 50-foot refrigerated trailer makes two stops daily.
Other retailers, startups and nonprofits have tried to address the issue of food deserts from various angles.
Kroger’s move in Memphis comes as customers nationwide have become more conscious of issues of corporate social responsibility and big businesses have begun to respond in some surprising ways.
The Business Roundtable, a lobbying group composed of CEOs of the country’s biggest companies, recently changed its corporate governance principles to reflect a responsibility on the part of corporations to “all stakeholders,” rather than just shareholders.
- Kroger Donates Empty Store to Competitor to Stave Off Food Desert – Newsweek
- Kroger’s trucks roll into food deserts – RetailWire
- Government incentives for food deserts – RetailWire
- Is Walmart’s CEO the right leader for Business Roundtable? – RetailWire
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8 Comments on "Kroger makes unusual donation to prevent a food desert"
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Director, Retail Market Insights, Aptos
This is an incredibly important and generous gesture by Kroger. Their awareness of and sensitivity to the needs of the community that supported them for many years is both admirable and inspiring. While they may never see monetary returns in the Orange Mound community from the goodwill engendered by this act, their national brand image is enhanced, colleague morale is enriched, and the company will prosper in many indirect ways.
Managing Director, GlobalData
This is very decent of Kroger and it says a lot about the moral fiber of the company. Sadly, some stores are simply uneconomical and it’s not wrong that retailers look to shutter them. Part of the solution lies in flexible formats: some areas can’t support a big box store, but may be able to accommodate a smaller format that still sells a comprehensive range of goods. Hopefully as more big grocers adapt their formats we will see more retail solutions for underserved areas.
Chief Executive Officer, The TSi Company
Urban Planner
Principal, KIZER & BENDER Speaking
Well, now I wish there was a Kroger near me so I could shop there.
I’m with Neil, some stores are simply not economical. Community well-being is top-of-mind for consumers today. Kroger’s care for the people of this Memphis community sets an important example for other businesses to follow.
Principal, KIZER & BENDER Speaking
Way to go, Kroger! When we last spoke, a month or so ago, about Kroger’s Mobile Mart, I said it shows their corporate heart, so this effort by Kroger should not surprise anyone. We should be thankful for their willing contribution to help. Sometimes, there is more to think about than just instant deliveries, robots and AI. Shout out to you, Kroger.
President, Graff Retail
How can anyone not be proud to be part of the retail world? Retailers of all sizes donate millions and millions of dollars each year back into their communities. They do it quietly, typically (Walmart alone donates over $1 billion annually). Retail gets a black eye (sometimes deserved) too often. This is just another example of the good work we do.
Vice President, Research at IDC
The business roundtable companies donate over $8B to charity last year. This move by Kroger is reflective of their values. While it won’t impact revenues dramatically, every company, especially larger ones or highly branded ones have PR firms on retainer. There is only upside to this for Kroger and the closer to believing this mantra of supporting their community at large they are, the more public support it will drive for them.