Walmart wants to open four stores in Washington, DC. All four stores will be located in relatively poor areas; two of those four stores will be located in government-defined “food deserts.” The stores could bring up to 1,600 jobs to the District, and the announcement comes on the heels of Walmart’s decision to cut prices on fruits and vegetables – produce arguably comparable to that available at more expensive outlets - as part of an effort led by prominent DC resident Michelle Obama. The proposal has drawn support from actual community residents, desperate for jobs and cheaper groceries. Walmart is not asking for any tax incentives or public subsidies.
The result has been rage. Mayor Vincent Grey told Walmart that it could either open a fifth store (in his home ward), or it could GTFO. Ward 4 ANC commissioner Brenda Speaks opposes the new stores because she thinks her constituents will steal too much stuff from them. Councilman Phil Mendelson introduced a list of demands for Walmart, ranging from comical to absurd (my favorites: “do not ask job applicants about previous criminal convictions” and “employ at least two off-duty DC police officers at all times”). “Community members” protested outside the home of an executive involved in the potential development of one of the sites (although I’m not sure if that pic is from the “community” protest or an Abercombie & Fitch catalog). The DC Socialists demanded that Walmart “not undercut nearby businesses that sell similar goods.” A labor organization hired homeless people to protest. And so on. You get the picture.
Meanwhile: Detroit. Whole Foods is opening a store in Detroit. Despite the (incorrect) assumption that Detroit is one giant food desert, this store is not opening anywhere near a residential desert. In fact, Whole Foods – known to target more wealthy and educated customers with above-average incomes – is opening in the most affluent part of Detroit: Midtown, which sports the highest rate of income per acre and highest average household income of new Detroit homebuyers in the city. To serve expensive produce to a comparatively wealthy customer base in an overwhelmingly depressed city (and hire 60 to 75 people), Whole Foods – which posted a gross profit of $3.1 billion in 2009 – is receiving $4.2 in incentives: $1.5 million in local and community foundation funds, $1.2 million in federal tax credits under the New Market program and $1.5 million in state incentives.
The result has been praise. Mayor Dave Bing called announcement day a “wonderful day” for the city. Jeff Wattrick says the store will make Midtown "more attractive to young professionals." Free Press columnist Stephen Henderson says the move is “about bringing high-end commercial activity back to the city's core, and watching as it spreads.” George Jackson, president of the Detroit Economic Growth Corporation, said Whole Foods could be a “transformational tenant” for Midtown and declared a “right to shop in a national grocer.”
Amidst the lovefest, there’s really only one group of people upset about this new store. Owners of the other 84 grocery stores in the city. You know…the independent shop owners and minorities that we’re ostensibly trying to protect in DC:
"I don't mind the competition, but why should my tax dollars be used to subsidize a competitor?" asks Norman Yaldoo, who owns the store with his father, Edward.
Good question. Whole Foods would bring some trendy cachet to Midtown. But there are three other full-service supermarkets, including the Yaldoos' store, that risk losing customers to the subsidized store.
And even though Whole Foods is a multibillion corporation, attracting its store to Detroit will require roughly $5 million in government sweeteners, according to state documents FOIA'd by the Chaldean News.
The subsidies and tax breaks would allow Whole Foods to lease its Detroit store for $6 a square foot — half to two-thirds less than other supermarket owners typically pay in the city.
And there are other supermarkets in the city. Martin Manna of the Chaldean American Chamber of Commerce says there are 84 supermarkets in Detroit, mostly Chaldean-owned, and like the Yaldoos' store, most offer a full range of groceries, including fresh fruit and vegetables.
If Detroit truly were a food desert, there might be a public health rationale for subsidizing Whole Foods and Meijer. But with local competitors already in place, the special treatment for the national chains raises a fairness issue.
It also ignores history. Detroit has a poor record of using national grocery chains as a redevelopment tool.
In the 1990s, the city spent a great deal of money to attract a Super Kmart and a Kroger. Both failed, and both buildings are now occupied by Mike's Fresh Food stores, which survive without any taxpayer help.
I’m sure there’s a lesson in there somewhere.