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Shrinking Groceries?

If grocery stores and fresh food are disappearing nationally, what does that mean for Hawai‘i?

Quoted

Will obesity rates continue to rise because our kids can find a bag of Doritos three times faster than a bag of apples? Consumers want fresh food options that are accessible and affordable, and if that’s too much to ask, we’re in real trouble.

Community / Customers these days are paying more for groceries. We all know that. But there’s a lot of truth to the notion that groceries are, well, shrinking. Companies are hoping that it’s simply going unnoticed, but it’s not. They shave a little bit off here, a little there, and then, eventually, the neighborhood grocery store we count on for fresh food turns into another drugstore selling smaller bottles of Excedrin for the exact same price as the old ones. Take for example Scott toilet paper. The old roll had 115 square feet, now it’s 104 square feet. Add laundry detergent and ice cream to that scenario, both of which are also shrinking considerably.

In his article, “Honey, They Shrunk My Food!” Sylvain Charlebois reports that margarine, yogurt, orange juice and granola bars have seen significant drops in quantity per unit, but prices have remained the same. The simplest explanation, Charlebois says, is that input price hikes are forcing food processors and distributors to revisit their packaging strategies. “Legally, nothing prevents food processors from charging the same for less.”

Deceitful? Yes.

Does the food industry have a moral contract with the public? Are they obligated to be strategic enough to set price points consumers can bear? Let’s take it one step further and ask whether or not the food industry has an obligation to offer fresh food instead of foods that simply impact the bottom line.

People seek a variety of grocery stores selling fresh food choices. They want Costco for obvious reasons, stores like Kale’s Natural Foods and Kokua Market for healthier options. And many people prefer to buy from a local family market rather than from a supermarket like Safeway, but in some areas of the country, including parts of Hawaii, these options aren’t available at all.

The recent closing of Hawaii Kai’s Foodland is old news, but let’s go there for a minute. Instead of choosing from a variety of greens and veggies, folks will soon be restricted to canned soups and pop-tarts. That’s a real loss, and for Hawaii Kai resident Jaimie Gusman it’s as much about having healthier options as it is about convenience.

“Foodland closing is a huge loss to this community,” she says. “Having a variety of grocery stores is much more important to me than having a variety of places to buy shampoo or Advil. Safeway is the only other grocery store in the area with a similar amount of space and selection as Foodland, but now…it’s going to be even more overwhelming with longer lines and crowded aisles. I’d rather give my money to a private store like Kale’s, but that’s difficult too because they don’t have everything you need.”

To Trend, or Not to Trend?

As one of the poorest communities in the US, South Los Angeles’s access to fresh food is limited. Grocery stores and non-fast-food restaurants are nearly impossible to locate, and on most corners you’ll find small stores packed with beer, cigarettes and candy bars. According to a 2009 report by MSNBC, there are only six supermarkets in South Los Angeles, which carry the burden of serving a population of 688,000.

So what about other parts of the country? Seven years ago, the state of Pennsylvania invested $30 million and opened 61 supermarkets in rural and urban areas. Chicago and New Orleans considered similar programs, but just like California, legislation came to a halt due to budget constraints. Fast food remains king in South Los Angeles, and one can only imagine what would happen if this trend finds its way to Oahu and the rest of the state. More fast food means more drugstores, which means a food catastrophe for Hawaii communities.

In 2008, Wal-Mart Stores Inc. opened four pilot marketplace stores in Arizona, which are half the size of a traditional grocery store. What was once known as the “supermarket” in Midwestern cities like Chicago, has now transformed into a small-format store. Safeway experimented with its small-format version in Southern California, and now, even Whole Foods is scaling back the size of its stores.

This idea is spreading across the country. Grocers are coping with higher costs, limited capital and constant competition with businesses with higher profit margins. TheNew York Times reported in 2008, that “this small-format experimentation was triggered by UK competitor Tesco, which launched 70 small-format supermarkets that year in Nevada, Arizona and Southern California.”

Small Towns Suffer

In rural counties across the nation, small towns face a threat even worse than the downsizing of their grocery stores. A casualty of the economic crisis, these rural areas are witnessing the disappearance of their community grocery stores altogether.

“Rural grocery stores are disappearing across the nation,” according to “Rural Grocery Stores: Importance and Challenges,” a report by the Center for Rural Affairs in Lyons, Nebraska. “While urban population are increasing, most rural communities and counties are decreasing in population. Rural grocery stores, therefore, are fighting larger rural demographic trends,” the report said.

From 1995 to 2005, the number of grocery stores dropped by almost half in Iowa, and in rural parts of that state, 43 percent of grocery stores in towns with populations less than 1,000 closed. Since 2007, 82 grocery stores in Kansas closed (including the one in my hometown), leaving communities throughout the state with nothing but a single gas station convenience store.

So What About Hawaii?

Data from the US Department of Agriculture shows that 803 counties in the US are classified as “low access” areas with regards to full-service grocery stores; 418 counties are considered “food deserts.” This report failed to include Alaska and Hawaii, but according to a 2010 investigation of food issues in Honolulu, conducted by the College of Tropical Agriculture and Human Resources, residents in Moiliili were negatively affected due to transportation, affordability, and quality of food.

Sheryl Toda, director of corporate communications for Foodland doesn’t believe all the hype about shrinking groceries or the trend that suggests we’ll be losing our supermarkets any time soon.

“We’re opening a Foodland in Kapolei in mid-2012,” she says. “It’s a 4-acre shopping center and community village–a 36,320 square-foot store, it’s huge. And Safeway is getting ready for their expansion soon too, so I don’t really agree that this [national trend] applies to us here in Hawaii.”

This past June, Safeway announced its plans to develop a 60,000 square-foot supermarket on 13 acres in Wailuku, Maui, with The Harry and Jeanette Weinberg Trust serving as its anchor tenant. (Which is another story altogether…who are these guys, and what are they really doing in the front of my building?)

Sean Newcamp, the field representative for the Hawaii Carpenters Union (whose organization stood outside Hawaii Kai’s Foodland in support during its final days) says he’s not worried about the national trend either.

“What’s happening in Hawaii Kai is truly an unfortunate situation,” he says. “[But] several grocery stores are under construction or will be constructed in the near future. Unlimited Construction is working on the new Safeway on Beretania Street. Ralph Inouye is working on the Foodland in Kapolei. Swinerton Builders recently built a Safeway in Hilo, and Pankow has the contract for the new Safeway in ‘Ewa.

“The problem in Hawaii Kai is that the community has lost a grocery store and another grocery store has not been built in its place. I don’t foresee a trend of grocery stores being transformed into drug stores.”

Maybe Toda and Newcamp are right. Maybe we have nothing to worry about here on Oahu or in Hawaii. But according to other national trends (such as foreclosures, unemployment and the overall state of the economy) it seems that three years from now, we might have something to worry about.

Will there be accessible, fresh food available in parts of the island like Waianae or Waiahole or Kahuku? Will obesity rates continue to rise because our kids can find a bag of Doritos three times faster than a bag of apples?

As grocers move away from 100,000 square-foot monster stores, urban and rural shoppers continue to ask for more than just cheap detergent at a fair price. Consumers want fresh food options that are accessible and affordable, and if that’s too much to ask, we’re in real trouble.