Nonprofits Seek to Bring Grocery Stores to Low-Income Neighborhoods

Grocery is a tough business, even if you’re big. Nonprofit grocery stores serving low-income neighborhoods are even tougher to sustain, but that doesn’t stop passionate people in a variety of places from trying.

The latest effort, sponsored by a large Christian-anchored community development organization (City Square) and a small grassroots advocacy group (For Oak Cliff) is focused on a south Dallas food desert, a term defined by the US Department of Agriculture for low-income communities in which there is no grocery store within a mile (in urban areas) or 10 miles (in rural areas). In Oak Cliff, if you don’t have a car, a trip to buy groceries can take more than an hour. In 2016, the city offered at least $3 million to any grocery willing to sell fresh produce and healthy food in south Dallas, but found no takers. With plans to open in 2020, the Oak Cliff store organizers say they have been researching similar nonprofit grocery store concepts from Waco, Baltimore, and Washington, DC. They believe their model can be a game changer in Dallas.

But how do nonprofits succeed? The grocery business is low margin, highly competitive, cash and debt intensive, and fluid, with stores frequently opening, closing, moving, merging, and getting sold off. Supermarket stores average 43,000 square feet, enormous facilities that can bring in big revenue and serve lots of customers in higher density and higher income areas. The nonprofit groceries we know about are most often less than 7,000 square feet, seek to serve a low-income clientele, frequently lack sector-specific expertise, and certainly don’t have ready access to capital markets.

The paths are not easy, but some nonprofits have had at least relative success.