White House facilitates Walmart’s urban expansion

Walmart is among a group of retailers who further aligned themselves with a key Obama administration initiative this week by committing to open more than 1,500 stores in urban and rural markets defined as food deserts. The initiative is part of the Obama administration’s Let’s Move! campaign designed to address the nation’s weight problem by improving access to fresh foods.

Here are the facts:

  • Walmart will open between 275 and 300 stores in food deserts by 2016.

  • Walgreens will transform 1,000 of its stores in food deserts by adding fresh foods.

  • Supervalu will build 250 Save-A-Lot stores in food deserts during the next five years.

So what’s a food desert? The answer is rather surprising because it turns out nation’s food deserts are quite expansive, according to the definition developed by the a working group of the Healthy Food Financing Initiative, which consists of representatives from the Treasury Department, Health and Human Services, the Agriculture Department and staff from the Economic Research Service. These folks determined that a food desert is anywhere there is a low income census tract where a substantial number or share of residents has low access to a supermarket or large grocery store.

Access is the key word because to qualify as a “low access” community at least 500 people and/or at least 33% of the census tract’s population must reside more than one mile from a supermarket or large grocery store. In rural areas the distances increases to 10 miles.

Income level is another key component of determining food desert status. To qualify as low-income community a census tract must have either a poverty rate of 20% or higher or a median family income at or below 80% of the area's median family income.

According to Walmart, since 2007 it has opened 218 stores in food deserts and the 275 to 300 new stores committed to this week were already in the company’s real estate pipeline and include new units as well as supercenter expansions.

“By opening stores where customers need them most, Walmart will help build healthier families and stronger communities. We believe every single person should have access to an abundant selection of fresh fruits and vegetables at an affordable price,” said Leslie Dach, Walmart’s EVP corporate affairs.

Joining forces with the First Lady to address the issue of food deserts is a brilliant move on Walmart’s part. The company gets to look like a hero for opening stores it had already planned and now as it looks to open additional units in urban areas, Walmart has the de facto blessing of a pro-union democratic administration because it is helping address an issue that is a top priority for the First Lady.

The alliance is somewhat ironic because Walmart was not treated that kindly during the election by the Obamas, both of whom had some harsh words for the company as they curried favor with the Democratic base. All is well now though, with the First Lady publicly supporting Walmart and vice versa.

“First Lady Michelle Obama is helping millions of Americans lead healthier lives, and Walmart is proud to partner with her in this work,” Dach said. “The First Lady's leadership on products, prices and access to healthier food has helped sharpen our focus on bringing affordable groceries to underserved urban and rural areas.”