Walmart and the Good Food Movement
Walmart recently created a firestorm of controversy within the 'Good Food Movement' when it donated $1.2 million to Milwaukee-based Growing Power, a national leader in the struggle to get good healthy food to low-income communities. Some food activists have criticized Growing Power for taking the money, saying the donation is a thinly veiled attempt to buy goodwill. Others assert Growing Power deserves the money -- and indeed should have received even more from Walmart.
Food polemics aside, a look at the numbers reveals an important motivational scenario for the planet's largest food retailer:
Walmart is under pressure to expand after eight quarters in a row of falling sales. By last December, the company was sitting on $10 billion in cash, cash the company needs to put to work or risk the confidence of investors. Having saturated rural and suburban markets, the company plans to open hundreds of small-format stores in urban areas, (including 15 new stores in Southern Wisconsin). With post-recession real estate prices low, Walmart and other retail chains are swiftly moving in to capture the urban market. Success would mean an extra $80 billion dollars a year for Walmart's bottom line.
And it could mean even more.
American cities are gentrifying. Many major urban cores are becoming whiter and more affluent. The percentage of white residents in the urban cores of Washington DC, Atlanta, Oakland, New York and Chicago is growing. Between 1999 and 2008 the income gap between suburbs and urban cores shrank. Over the same period suburban poverty grew by 25 times.
Despite the hype, Walmart does not make its big money from low income consumers. Over half of all sales are to households with incomes above the national median. Just over a quarter of sales are to households with incomes below twice the federal poverty line. Strategic placement of stores for Walmart could, if current trends continue, mean the company will be set up to serve the white and middle income communities moving back into America's urban spaces.
For Walmart, urban expansion is not about ending food deserts -- it's about getting in on the ground floor of the future -- affluent -- retail market in America's cities.
Community groups and labor unions have long opposed Walmart's urban ambitions. With growing strength on the national scene, the community food movement is poised to become a player by expanding new local stores. If Walmart can sail through local city council votes for the conditional use permits and zoning adjustments they often need, the company may be able to avoid the infamous site fights that have accompanied new stores nationwide -- and it will undoubtedly crowd out any and all local retail alternatives. Rather than having their food dollar spirited off to the retail monopoly's corporate coffers, these alternatives could potential keep in the community where it can recirculate as much as five times.
What does the urbanization of Walmart mean for the health of America's underserved communities? The answer may be 'not much.' Access is only one piece of the puzzle. A recently published study in a top medical journal found that greater access to healthy food is "generally unrelated to diet quality." Income level, however, is highly predictive of health outcomes. And while Walmart's new stores will bring jobs, they are not living-wage jobs and are unlikely to bring prosperity. The company's labor practices are notorious: wage theft, poverty line jobs, and aggressive anti-union behavior. A study of an urban Walmart that opened on Chicago's South Side in 2006 also indicated that the new store cost the local economy as many jobs as it created, without increasing local sales tax revenue. in other words, Walmart drives local food retail alternatives out of the market.
What is the lesson for the food movement? If creating diverse access to healthy food and healthy local economies is the goal, Walmart is unlikely to help us reach it, given their current business model. Their donation to Growing Power is .00001% of what they stand to make if their urban expansion plans succeed.
The Good Food Movement should welcome the expansion of Growing Power's much-needed projects. However, if good jobs and a diversified food system are key to food security, we cannot afford to be fooled into thinking that Walmart is working for the Good Food movement.
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