Last year at least one analysis found Indianapolis to be the US metro area with the most population living in a "food desert".Last week the Indy empty zone got a bit bigger when four long-time grocery stores serving low-income areas suddenly closed.
According to Walk Score seventy-two percent of New Yorkers live within a five minute walk of a grocery outlet with healthy options. Only five percent of Indianapolis residents live within a five minute walk.
Four Double 8 stores had served northern Indianapolis for over a half-century. They closed -- seemingly collapsed -- without much warning. I'm guessing (and that's all it is) that they lost a line-of-credit either with their bank for payroll or with their supplier for products. They had been trying to sell the stores -- without success -- for a time.
The owner/operator of Double 8 pointed to new competitors within a quick drive. The competitors are banners of much bigger chains. While once-upon Double 8 customers told reports that the small chain offered quality products and low prices, the bigger chains can meet the price-points and offer a more diverse range of products, including pharmacy, gasoline, ready-to-eat and more. In most American cities -- unlike New York -- the hassle associated with driving several more blocks is not sufficient to discourage direct competition across almost any 25-to-30 square mile quadrangle. If you have a working vehicle.
Grocery is a very price-sensitive, low margin business. It is therefore typically a high-volume business. In one-way or another grocery -- and other suppliers -- play different kinds of concentration strategies in order to compete. Any sustained loss of volume endangers the enterprise. Double 8 told reporters sales had decline by "double-digits" over the last year.
Next time: More on concentration strategies.
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