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CONCLUSIONS & RECOMMENDATIONS

Continue to engage and learn from existing businesses and community-based organizations by conducting environmental scans to identify critical changes occurring in the food access and food security arena.  With many different organizations actively working in this space, there is a critical need to utilize best practices in community planning and development to monitor changes and create strategic actions that best serve our most vulnerable populations.  

Biannual Neighborhood Reports

looking at neighborhood demographics - capturing key data to inform business planning and social shifts that are occurring at the neighborhood level.

Monitor changes in grocery retail outlets

making this visible for community conversation - consider development of a biannual report on grocery retail.

Conduct retail business retention visits

with grocers, pantries, community gardens, summer food programs and others who each play a critical role in food security to identify areas opportunities for growth and collaboration and proactively identify challenges and potential closures.

Monitor job creation and workforce opportunities provided by grocery retail.

Retail jobs may be a primary income, an entry level job for high school students or supplemental income - all contribute greatly to the stability of neighborhoods.

Connect Retail Grocers with Resources & Collaborative Opportunities

Make market analyses such as this report more widely available.  Connect stores to opportunities that are developing around the aggregation and distribution of local-regional foods and developing relationships with farmer cooperatives.  Collaborating to develop local-regional supply chains could strengthen independent stores models, offer chains an opportunity to offer locally sourced products, increase the amount of fresh local foods available, and support the region’s farmers.

Focus on Alternative Models for Low-Income Communities

The City of Peoria has been exploring in earnest mixed-use developments in 61603 and 61605 that will include components that address healthy food access.  The Invest Health initiative….and Connect Capital…..these teams merged in 2018 to form the Building Healthy Communities team…..visit to New Orleans ReFresh.

The challenge of providing adequate affordable healthy food options still remains one of our greatest challenges in these limited resource neighborhoods. Negative health outcomes and associations of access to energy dense, nutrient-poor (EDNP) foods have been well documented among urban areas (Kirkup et al., 2004, Lake and Townshend, 2006, Laska et al., 2010). Environmental and policy interventions that promote access to healthful choices may achieve the greatest benefits and broadest reach (Brennan et al., 2011, Frieden et al., 2010). Low access to healthful foods promotes reliance on pre-packaged foods (commonly nonperishable and energy-dense, nutrient-poor (EDNP) foods and beverages) (Moore et al., 2012).   A creative, collaborative, and community-driven approach is necessary and should leverage and network existing projects and programs to pilot alternative models in these neighborhoods.

  • Perform scan of RFFC and other organizations working on food security issues to obtain a clear picture of existing and planned food access programs and projects.

  • In the near term, strengthening access to healthy foods within food pantries as a strategic action that can help to improve individual and family health and wellbeing.

  • The growth and development of community gardens also hold great potential as strategic action to provide more fresh foods either through existing distribution channels such as local food banks and through implementation of Gardening and Family Health programming with the added benefits for families of engaging in the outdoors.

  • Given the large number of families with youth under the age of 18, careful attention should be given to ensuring adequate food for children.  Programs such as summer breakfast programs, weekend backpack programs, and others are critical for limited resource homes with children.

  • Each of these strategies needs to be explored and developed in partnership with residents of Peoria’s low-income neighborhoods, through careful coordination both in planning and execution of projects to ensure full utilization of programming benefits.   

  • Leverage and learn from emerging programming efforts to implement “food as medicine” projects throughout the region, as this practice has great promise in meeting the needs of families. culinary medicine is a new evidence-based field in medicine that blends the art of food and cooking with the science of medicine. Culinary medicine is aimed at helping people reach good personal medical decisions about accessing and eating high-quality meals that help prevent and treat disease and restore well-being.

  • Other cities such as Memphis and Indianapolis,have adopted a “live, buy, hire” approach which requires that decisions are informed by the needs and values brought to the table by the anchor institutions and residents alike.

Over the years, leading grocers have shown how to take the initiative required to gain an edge over rivals.  Retail grocery is an extremely challenging and competitive industry, with slim margins that depend on economies of scale to succeed. The Greater Peoria Region illustrates this principle very well.  We are quite fortunate to have a rich landscape of both large and small retail grocers who really understand what their customers love about them.

Given the purchasing power of the Peoria neighborhoods impacted by the closures, and the rapidly shifting strategies of global retail grocery companies positioning themselves to capture more middle and upper-class consumer, we are unlikely to see reinvestment by the major retail chains. Our focus should perhaps shift to alternative small scale development and the potential for them to fill the grocery gap.  Small scale alternative models have been a part of the Peoria retail landscape for generations, new stores are emerging utilizing similar principals. In considering alternative approaches - McKinsey & Company - Reviving grocery retail: Six imperatives is a great reference providing key areas of focus for grocery retail today and may be our best alternative for meeting local needs.  Our recommendations going forward include -

  • Develop an ongoing engagement strategy with existing retail grocers who have an expressed interest in enhancing community development and food access.

  • Work with Small Business Development Center and Black Business Alliance to support research and planning with entrepreneurs interested in food retail developments that serve limited resource neighborhoods.

  • Utilize demographic information provided in this report to support business development consideration, the ERSI market analysis and Tapestry Segmentations in particular provide great insight into neighborhood business development opportunities.

Place matters  - neighborhoods can contribute or deter business development, current City of Peoria corridor planning efforts are important to creating a environment that supports and facilitates business development. The challenge is to create inspiration and opportunities within neighborhoods, with the intention of creating public spaces that promote people's health, happiness, and well being. The food environment influences consumer food selection and health outcomes (Beaulac et al., 2009, Gustafson et al., 2013)  Careful consideration to location can begin to respond to concerns for access by families with young children and seniors alike.  Additional planning considerations that address the barriers created through lack of transportation and limited bus routes.  

  • Disparate efforts have come together to develop solutions to some of the most entrenched challenges facing our community. From poverty to blight,those living in the core of Peoria are faced with disinvestment and unequal access to opportunity. The Building Health Communities partnership is working to drive reinvestment back into the heart of the Peoria region.

  • Transit should be made more efficient and straight-forward for food pantry/meal provider clients.

  • Community stakeholders should explore multiple low-cost, transportation-improvement strategies to bridge food access gaps.

  • Foster livable communities in the following ways:  Identify gaps in the transportation system for vulnerable communities; Lead to focused solutions to improve access to healthy food; • Lead to added sustainable transportation options; and Access to food is an essential precursor to livability.

Challenges identified by Market Analysis:

  • Concentrated poverty in the closure neighborhoods

  • Disproportionate impact on Black/African Americans, women, youth, living below the poverty line, reduced access to transportation.

  • Loss in population

  • SNAP recipients

  • Tapestry Segmentation for EB/SS

Nationally, top consideration for where consumers shop, according to the Harris Poll, include price, convenience, quality meats and produce, and quick problem resolutions.  Secondary drivers include friendly staff, easy-to-navigate layout, community support, cleanliness, and customization.  Throughout the region we have both large and small stores who are working hard to meet these customer expectations.

Noted profit leaders for grocery retailers are the same items identified by survey respondents as most important in selecting a retail outlet - the greatest sales contributions are coming from fresh departments, including produce, meat and deli.

Playing to customer satisfaction is a key element, as once a customer is satisfied with a local independent market their probability of switching is small at only 0%  - The residential survey demonstrated that high level of customer loyalty to Kroger and shows they have found high levels of satisfaction at the new grocery stores where they now shop following the closures. (visualization of Harris Poll v. relevant resident survey questions?)

However, dollar sales declines combined with flat margins and higher expenses led to a decrease in net profit before taxes from 0.98% in 2016 to 0.09% in 2017 according to the 2018 Independent Grocers Financial Survey.  Peoria market would not be immune to these market trends, the issues for our region are compounded by declining demographics and limited purchasing power for our neighborhoods most in need.

Online shopping, nationally is reported as a growing trend all of the managers interviewed made note of current online shopping patterns and plans for changes that would allow for increased online sales.  Today, it is reported that 1 in 7 will increase their online shopping habits but in the future almost 3 in 10 plan to do more online shopping.

Key to retail success for our region remains the broad reach - 10 counties coming into a common retail landscape. The daytime population for the Greater Peoria Region rises by more than 20,000 (pg.23 Grocery Store Access Study)

The greatest challenge for the retail landscape is median household income for the region and affected households.  Figure 20 Further examination of the market profile for the region illustrates how the lower median incomes for the region translate into lower household spending.  Within the food category spending in the Ten County Intra-Region is near the national average, with 76 percent of the national average which is a strong showing considering the median household income for the region lags by … percentage. East Bluff and South Side are estimated in this category at 66 and 47 percent, respectively.  These numbers are further confirmed when we look at households receiving SNAP, by percentage Figure 17.

While the residential survey illustrates most have successfully found alternative shopping sites nearby, overwhelmingly respondents 75% (Q7) indicated the need for a nearby store that offers fresh meats, dairy 89% and fresh produce 88% (Q20).  Being able to afford fresh foods remains a critical concern for families. Approximately 49% of respondents indicated that they were either likely or very likely to get their groceries from a food pantry. (Q19)

Environmental and policy interventions that promote access to healthful choices may achieve the greatest benefits and broadest reach (Brennan et al., 2011, Frieden et al., 2010). Low access to healthful foods promotes reliance on pre-packaged foods (commonly nonperishable and energy-dense, nutrient-poor (EDNP) foods and beverages) (Moore et al., 2012).

Conclusion for East Bluff:

There is an overpopulation/abundance of grocery stores in the East Bluff neighborhood.  There is little opportunity, especially for national/global grocery chains, to capture a meaningful customer base that meets profit expectations.

The declining population of the East Bluff may also contribute to the abundance of available retail groceries and a decline in the overall purchasing power of the neighborhood.

Conclusion for South Side:

Based on this data, there is a retail grocery gap in the South Side.  This was true previous to the closure of the Madison Park Kroger. So given the closure, this gap has increased, and there is an opportunity to fill that gap.

But given the low purchasing power/concentration of poverty in the South Side neighborhood, filling that gap does not fit the business strategies for national/global grocery retailers.

Business/ Retail Recommendations:

Creative, Local, Independent Models May Prove Most Sustainable in Areas of Need

Given the trajectory of national/global grocery corporations, meeting the fresh, healthy grocery needs of the neighborhoods impacted by the closings, relocations, and consolidation of stores to areas of population and purchase-power density, community-driven or locally owned grocery stores have the potential to offer small-scale but sustainable options.

Today’s data-driven global grocery market—comprised of multinational corporations with headquarters in distant locations from the majority of their customers—relies on the analytics of aggregate numbers to make broad decisions for their stores that cater to the profits of their investors.  

Given this reality of the modern global business environment, low-income and underserved communities should pool, focus, and mobilize collective time, energy, assets, and resources to develop creative business models that meet the unique needs of their particular community’s residents.

With personal connections in the impacted communities, the small business owners and food entrepreneurs that call the community home are better positioned to understand and meet the nuanced needs of local consumers—especially in historically underserved and disinvested neighborhoods and rural towns.


What Does it Take To Run a Successful Independent?

Patrons of Independent grocery stores are loyal if factors met; convenience/location and price are most important, quality meat and produce, friendly staff, quick problem solving, cleanliness, and customization. (Nielsen 19).  To remain competitive, focus on quality, staff, and layout. Overall, customize your approach to your local independent shoppers. Know your shoppers.

8 out of 10 prefer their local store to online alternatives.  3 in 10 predict an increase in their online purchasing in the next 5 years, but in general see it as a supplement to their brick and mortar shopping.

Produce is the most important fresh food and prepared foods must be made fresh daily and have a good appearance.  Freshness and appearance are key to retaining customers.

Consumers expect their local independents to support them in making healthy eating choices.  This means doing a great job of labeling, offering healthy alternatives such as organic and for special dietary restrictions.  Most prefer alternatives alongside regular items, not in special sections of the store. Prefer guidance on cooking and label reading.

Managing price increases is key to retaining customers.  Increases of 5% or more to weekly spending will cause many customers to begin looking elsewhere.

Factors related to experience topped the list of priorities for shoppers of independent stores.  You must create a great experience above all with fresh produce and meats, affordable brands, and prepared foods as product priorities.  It is notable that over half prefer a store that supports and is involved in the community (this makes me think of Haddad's and how often they are involved with the Fire Dept, Girl Scouts, and supporting other neighborhood efforts).

Nationally, top consideration for where consumers according to the Harris Poll include price, convenience, quality meats and produce, quick problem resolutions.  Secondary drivers include friendly staff, easy-to-navigate layout, community support, cleanliness, and customization.  Throughout the region we have both large and small stores who are working hard to meet these customer expectations.

Noted profit leaders for grocery retailers are the same items identified by respondents as most important in selecting a retail outlet - the greatest sales contributions are coming from fresh departments, including produce, meat and deli.

Playing to customer satisfaction is a key element, as once a customer is satisfied with local market their probability of switching is small only 10%  - Residential survey demonstrated that high level of customer loyalty to Krogers and have found high levels of satisfaction at the new grocer.

However, dollar sales declines combined with flat margins and higher expenses led to a decrease in net profit before taxes from 0.98% in 2016 to 0.09% in 2017 according to the 2018 Independent Grocers Financial Survey.  Peoria market would not be immune to these market trends, the issues for our region are compounded by declining demographics and limited purchasing power for our neighborhoods most in need.

Online shopping, nationally is reported as a growing trend all of the managers interviewed made note of current online shopping patterns and plans for changes that would allow for increased online sales.  Today, it is reported that 1 in 7 will increase their online shopping habits but in the future almost 3 in 10 plan to do more online shopping.

Personalization: https://www.businessinsider.com/the-in-store-personalization-report-a-2018-10

 

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