Why supermarkets have abandoned some of America's poorest neighborhoods

Despite the recent news that Family Dollar would be closing nearly 1,000 of their 8,000 American locations, dollar stores are spreading across the country at a staggering rate. Since 2011, the number of dollar stores nationwide has climbed from 20,000 to over 30,000, meaning there are now more dollar stores than Walmart and McDonald’s combined, according to a report from the Institute for Local Self-Reliance. 

Though they rarely carry fresh fruit, vegetables and meat — and despite likely exacerbating American food deserts — dollar stores are actually the fastest-growing food retailers in the United States, according to a 2023 study from experts at Tufts University School of Medicine and the Friedman School of Nutrition Science and Policy, which was published in the American Journal of Public Health. 

There are a variety of reasons for that, but one of the most significant by far is the way in which big-name supermarkets have largely abandoned, or avoided, many low-income neighborhoods over the last half-century, leaving a gigantic vacuum for dollar stores to fill, specifically in urban communities of color. 

In "Attracting Supermarkets to Inner-City Neighborhoods: Economic Development Outside the Box,” a 2005 study, author Kameshwari Pothukuchi wrote that many supermarkets left mixed-income central city neighborhoods after civil disturbances in the late 1960s and 1970s, following customers who left those areas during “white flight” — and they never really returned. “Supermarkets have abandoned the inner city for suburban and exurban locations,” Pothukuchi wrote. “Which offered more land for parking, easier loading and unloading by trucks, convenient access to highways and arterials, and a development context for much larger stores.”

Then, in the 1980s, several top grocery chains merged, meaning that the few store locations that survived in cities further consolidated. As supermarkets left urban communities, the landscape they left behind changed, too. As Dave Olverson wrote in the Southern Urbanism Quarterly article “The Death of the Neighborhood Grocery Store,” most cities around the U.S. have made getting zoning approval for certain small commercial buildings nearly impossible in residential neighborhoods. 

“Today, academics and community advocates alike talk about ‘food deserts,’” Olverson wrote. “These conversations often revolve around why big supermarkets don’t choose to locate in a particular area. They rarely discuss the neighborhood grocery store that has been outlawed across the country.” 

He continued: “In essence, this means that in most residential neighborhoods, people don’t have a choice. They are forced to drive to get their groceries. What’s more, thanks to zoning codes, residents have been stripped of any avenue to come up with solutions to the problems facing their neighborhood. They have no agency over whether or not a large supermarket chooses to locate in their area.” 

Food retail experts say that there are a variety of factors that a supermarket’s leadership team takes into account when determining where to open a new store. In a statement to CNN in 2020, Heather Garlich, spokesperson for FMI, a trade group for the food retail industry, said: “Market, economic and demographic factors influence a company’s decision to establish a store. Grocery stores require an adequate customer base and economic support to remain viable; real estate costs and availability are significant factors to determine where and how a store is built.”

That said, studies have shown that some supermarket leaders may perceive low-income urban areas — particularly those inhabited by people of color— as higher-risk due to concerns about crime, vandalism or social instability, while questions of profitability, operating costs and consumer demand come into play, too. This impacts where they choose to put their locations, resulting in what some sociologists have termed "supermarket redlining." 

Former Philadelphia mayor Michael Nutter has spoken about trying to convince several national grocery chains to open a location in a predominantly Black area of the city by offering tax incentives, only to receive little interest. “We went to virtually every national grocery retailer in our region,” Nutter told CNN. “White people don’t think Black people spend money, and they weren’t willing to invest in predominantly Black neighborhoods.”

If the supermarkets do invest, they aren’t necessarily there for the long-haul. The story of a large grocery chain putting down roots in low-income communities of color only to leave within a few years unfortunately isn’t an unfamiliar narrative. 

In 2016, Whole Foods opened the doors to its first and only location in Englewood, one of Chicago’s poorest neighborhoods. The decision was reportedly regarded by the company’s co-CEO Walter Robb as “one of the most meaningful things we’ve done as a company,” while the city’s mayor at the time, Rahm Emmanuel, said that opening the store would result in “opening doors to a new future for the Englewood community.” 

The store generated a lot of buzz in the majority-Black neighborhood, where 72% of households are at risk for food insecurity, according to data from the University of Chicago — but just five years later, it closed. This decision received as much attention as the opening. Former mayor Lori Lightfood decried the move as “a great disappointment” and “gut blow” to the community, while some neighborhood leaders questioned whether the location, which received  $13.5 million in federal tax credits, should have even opened in the first place. 

In another really telling example, in 2023, Aldi closed a “key location for Black and impoverished Minneapolis neighborhoods” when they shuttered a location on the city’s Northside. 

“We are sad, frustrated, and angry that Aldi, one of the three main sources of fresh produce and basic necessities at an accessible price point in North Minneapolis, suddenly announced its permanent closure this week,” the North Minneapolis food security nonprofit Appetite for Change wrote in a statement at the time. “That said, we are not surprised.”

They continued: “The Northside has a history of businesses coming to our neighborhoods and then abruptly exiting, leaving our community shaken by the instability. Abrupt closures seen all too often in our community cause gaps in essentials goods or services that are not easily or swiftly replaced.” 

However, for Aldi, it was simply business as usual. Just two days after their North Minneapolis location shuttered, the corporate account tweeted: “If we were looking for new store locations, any suggestions on where we should go next?”