Urban markets and fresh food departments are shaping up to be the retail battleground of 2011. First, Target expanded its fresh offerings to roughly 340 stores in 2010 with plans to add 400 more this year, and now Walgreens is gearing up to move beyond a test of expanded grocery items to approximately 400 additional locations.
It's an attempt to capture market share from supermarkets and a bigger share of the wallet from consumers who may not have many other places to shop for grocery items. Those who live and work in our nation's "food deserts."Food deserts are areas that lack access to affordable, healthy foods including fruits, vegatables and whole grains. According to the USDA, a small percentage of Americans live in food deserts. Many are located in large cities, and for those living in the rest of the country, it can be difficult to imagine large swaths of land where the only sources of food are convience stores, gas stations, and fast food restaurants.
But exist they do. Many are in poor communities unnattractive to large national grocery and discount chains. The few retailers that do operate there, can charge a premium and don't typically offer fresh, healthy foods. Hence Walgreens' new program.
The retailer is looking to expand a pilot program from 10 stores in Chicago -- mainly on the city's South and West sides -- and has indentified up to 400 locations with existing stores located inside food deserts. The initial program launched in fall 2010 in those 10 stores with the addition of 750 food items, including fresh fruits and vegetables, meats, and whole grain pastas. Walgreen's will devote roughly 40% of its store to food items, with expanded refrigerated sections.
"Pricing is very competitive and affordable," Walgreens' spokeswoman Vivika Vergara told WalletPop. "We know that food deserts are not just a problem in Chicago and have identified about 400 locations where there is limited access to healthy food."
Vergara couldn't give a timeline to the rollout, saying the company is still collecting data from the pilot program and tweaking the merchandise mix. And to be sure, this isn't an altruistic move, it's good business. Retailers like Walgreens are expanding food offerings to get shoppers to visit more often and buy more when they do.
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