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Chester’s non-profit food market tries to square mission with bottom line

News Source: NewsWorks

By: Laura Benshoff

For 12 years, the City of Chester had no supermarket. In an effort to end this so-called “food desert,” a local food bank plunked down a nonprofit grocery store in the impoverished Delaware County city in October 2013.

Area food bank Philabundance opened the new store, called Fare & Square, in the same footprint as a former supermarket at the corner of Trainer and 9th Streets.

When it opened the store was touted as a philanthropic venture and a boon to Chester, a city of about 34,000.  A third of the population lives below the poverty level.

After raising $7 million start up funds through grants, donations and loans, Fare and Square launched with a two pronged mission: become a sustainable business and make people in Chester healthier.

Stocking what sells

When Fare & Square first opened it’s doors, a lot of the stock wasn’t winning over customers.

“Watercress lettuce, that didn’t sell too well, leeks, that didn’t go to well, rutabagas, parsnips, that didn’t go over well,” said produce manager and self-proclaimed carnivore, Nate Sumpter.

On first glance, Fare and Square is intentionally laid out like an upscale grocery store, with produce front and center.

“Our model is, we want to have all kinds of healthy stuff, so when people walk in they’re like wow, what’s all this? Plus what they’re used to seeing,” said operations manager Mike Basher.

What people are used to seeing is processed and junk food. TastyKake displays line the checkout aisles. Cases of soda lurk below eye level, behind displays of fruits and veggies.

The supermarket business is notoriously tough – razor thin margins on a product that can quite literally rot on the shelves if it doesn’t sell. Big chains rely in on high volume to get the lowest prices on what they sell, and the returns from a successful store to prop up new or under-performing locations. A one-off grocery store has neither advantage.

Those chains also average profit margins of only a percent or two, and generally take three to five years to get back into the black.

To get and keep customers, Basher and his crew started tinkering with what they carried. They cleared products that weren’t selling from the shelves and replaced them with goods customers asked for, like Caribbean and Latin American food.

On a recent visit, a lot people in Fare and Square’s checkout line were buying packaged foods and fresh foods together. Sales have grown year over year but Fare & Square needs to take in 20 percent more to break even. For now, it’s subsidized by its parent company, the food bank Philabundance.

“If you’re on a budget, you’re not purchasing food with the intent of improving your health. You’re purchasing food to satisfy hunger.”

Making money presents one challenge. Changing people’s eating habits, that’s another tall order.

Fare and Square has been experimenting with incentives to get customers spending more of their food dollars on healthy and fresh food – by lowering the cost of things like produce.

Customers who self-declare as living on less than 200 percent of the poverty level receive 7 percent back on all of their all purchases, through a program called Carrot Cash — but they get back more for each dollar they spend on fruits and vegetables.

Anne Palmer, a food researcher at Johns Hopkins University, said research into food deserts shows just because healthier food is on shelves doesn’t guarantee customers will buy it.”

“If you’re on a budget, you’re not purchasing food with the intent of improving your health. You’re purchasing food to satisfy hunger,” she said. “You make choices you can afford on things you know your family will eat.”

Food that is unfamiliar or difficult to make therefore constitutes a risk: if you’re family doesn’t eat it, that’s money down the drain. At the same time, restricting what people can buy to only healthy food is unrealistic, according to Palmer.

“We have to recognize everybody wants a wide range of foods…[packaged goods] might be what it takes to bring people in, recognizing that if you don’t do that, they’re going to go somewhere for that food,” she said.

The relationship between incentives by non-profit grocery stores, like Carrot Cash, and healthier eating haven’t been studied long enough to determine if there is a link, according to Palmer. Researchers at Swarthmore University did conduct a field study at Fare & Square, pending publication, that showed giving customers a coupon for produce led them to spend more total food dollars on fresh food, whereas receiving a coupon for any food in the store did not.

Employees at Fare & Square said one of the company’s goals for the next year is to use more of its customer level data to learn more about how promotions and incentives effect healthy eating habits.

No matter what they’re buying, people shopping in the store say they are grateful to have an affordable option in Chester.

When asked how often they shop, Chris and Kyisha Smith, a young married couple perusing the meat case, answer in unison: “Every week.”

“They got everything, chicken, steak…They the best though, I ain’t even gonna lie to you,” said Chris Smith.

Nearby, Brenda Rice scoots her walker up and down the dry goods aisles, searching for Sunday dinner’s canned yams. She said she does most of her shopping at Fare & Square because it’s close by and because “certain things I can get with my [Carrot Cash] card, knowing I can use that if I don’t have enough [money].”

As for what she buys, she knows she should avoid certain foods, like red meat, for her health.

“I can’t eat a lot of beef, a lot of things I can’t eat,” she said, dropping her voice to a whisper. “But, I sneak.”

After all, she’s only human.

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