Chicago’s Risky Food Desert Solution

Forward Thinking or Future Flop?

Limited access to food either because a grocery store is too far away or the cost of nutritious food exceeds the average household income in an area is what we call a food desert. The west and south sides of Chicago have become food deserts in recent years with big names like Walmart and Whole Foods opting to shut down stores due to lack of profit while residents struggle to purchase groceries at inflated prices and find the extra money to get to a grocery store.

The city of Chicago has responded by proposing the development of city owned grocery stores with the primary goal of bringing reasonably priced nutritious food to its residents. The proposal is both applauded and discouraged as the need is real, but the proposed solution is complex. While the endeavor would seek to secure food supply rather than generate a profit, it would certainly cost a lot of money to construct and operate.?

Chicago is not the first city to consider this option as a viable solution to food insecurity; and it surely will not be the last. However, as a potential early adopter of a method that blends both government and private entities in the grocery sector, how Chicago proceeds could set a precedent for other major cities across the country and spell out the formula for how we measure success in a situation like this.

City Owned Does Not Mean City Operated

In Chicago the model is intended to provide a structure for the city to support privately operated stores. Support would include financial investment in the form of subsidies paid for by Chicago taxpayers, assisting private operators in securing capital, operational help in the form of training employees or supplying technology, and repurposing city owned buildings for use as grocery stores.??

Chicago’s mayor believes this collection of supportive endeavors could minimize initial startup costs for a single store by almost $2 million and require $130,000 in annual subsidies to remain operational assuming the store generates at least a 0.6% profit.? The city doesn’t plan to burden taxpayers with the finances if it can help it.? Instead it aims to help private operators secure financial investment. The solution is focused on solving the food desert issue by pooling resources rather than building a profitable empire.

The lingering question is, who will invest in the project when the profit margin is virtually non-existent and the true measure of success is vague???

If Walmart, who combined with Sam’s Club accounts for 50% of grocery sales throughout the Midwest and southern states, can’t survive in this area of Chicago can any grocery store stand a chance?? In the short term the plan is possible and even feasible if communities rally together to open stores by offering their time, knowledge and finances. Long term stability may need a plan that considers more than wealthy investors and government subsidies.??

Profitability vs Problem Solving

If profit is not a goal, then those opposed to the idea wonder how the city will ensure efficiency and sustainability. The proposed idea doesn’t necessarily lend itself to a simple balance sheet where examining income versus expenses?gives clear insight into what is working and what isn’t.?

A private owner/ operator would look at ways to reduce the cost of everything from labor force, to shopping carts, to inventory; while a city project tends to consider creating jobs, boosting the economy, and enhancing opportunities for its residents.? Through the lens of profit and loss businesses make decisions that ensure minimal waste in resources. Those who think the idea is risky say the absence of this lens means the project could be riddled with wasteful decisions that in the long run will undermine the goal of securing food supplies in desert areas.? The problem of proximity to healthy food options might be solved, but if the process drains existing resources and food costs remain high residents will still suffer food insecurities simply because they still can’t afford the options on the shelves.

The city’s solution comes in the form of assuming ownership of not one, but three stores. A larger operation would obviously require more upfront investment, but the hope is that in the long run it would reduce spending.? Inventory could be bought in bulk to reduce the per unit cost, employees could travel between stores depending on needs, and it would make use of a central warehouse where at least some goods could be provided for by the city and distributed on a larger scale.? The proposal offers three legs to sand on instead of one which could minimize risk. Or it overextends the city’s capacity by launching three risky humanitarian focused business plans.

Just one year ago, in southern Illinois, another city attempted a similar model. Residents of Cairo, Illinois?were overjoyed to have a store with fresh produce just minutes away, but today most have resumed shopping thirty minutes outside of town. The store began its downward spiral with a broken storage freezer. Like the Chicago proposal, the Cairo store did not have a clear profit goal and therefore had no money to replace the freezer right away. They could not order and store a large portion of inventory. Shoppers had to go elsewhere while they waited for inventory to build back up, but the store, now serving fewer customers and never able to bring in products at discounted prices or keep shelves abundantly stocked, couldn’t generate enough profit to rebuild the inventory necessary to be a truly valuable option. The situation quickly spiraled beyond the scope of a government subsidy.??

Revitalizing Communities Through Food

Food deserts are most commonly areas that are decreasing in population size. City-owned grocery stores have been an attempt to revive communities. The idea that a town can’t really exist without a grocery store has been the catalyst for projects of this nature with the hope that it will infuse an area with greater cash flow and create a domino effect that leads to better housing, hospitals, and more people moving into an area.?

The city of Chicago hopes to partner with operators who have a pulse on what the residents in these locales really want and need. If stores can meet these needs and play a part in facilitating collective goals then perhaps communities will experience an economic revival. Grocery stores? that are completely city owned have yet to produce a duplicatable model and privately owned stores are leery of food deserts. Perhaps this nuanced partnership in Chicago will provide new data to help confront a complex problem.

Originally Posted on Stratagerm's Blog on March 24, 2025.