Making Low-income Communities Visible

by Brahm Amadi

 

Low-income communities are often ignored or overlooked by politicians, developers and corporations as attractive opportunities for business and the development of markets. One reason for this is that there is a lack of information and data about these communities that can show just how much economic or market opportunity exists within them. The research and data gathering just hasn’t been done, largely because no one has wanted to invest the time, energy and money to do the research.

This disinterest comes from historical periods in which these communities were redlined and seen as “no go zones” for banks and other businesses. This was partly due to policies that were rooted in racism and discrimination against poor people. But there was also a reality that little economic opportunity did exist, for companies as well as for the local residents themselves.

But the tide is changing for low-income communities. The purchasing interests of low-income consumers are shifting in ways that can open new market opportunities. These communities are a real economic force and represent substantial collective spending power. Yet, the lack of market data continues to cause these communities to be overlooked.

For example, few companies know what the real market opportunity is for grocery stores in low-income areas. While misinformed assumptions and stigmas exist that these communities don’t have enough buying power or that there’s not enough demand for quality foods, low-income consumers represent 45% of food retail expenditures for at-home consumption in the US and spend approximately $85 Billion annually on groceries. That’s a very significant national market.

And assertions that low-income consumer’s won’t spend more for better quality food is also a fallacy. In a recent survey of low-income residents conducted by Community Health Councils in Los Angeles, CA, 65% of respondents said that price was never or rarely a factor in purchasing healthier foods.

And as for the notion that low-income people would rather purchase their food at fast food restaurants or convenience stores- the Community Health Councils survey found that 57% of respondents prefer to buy their food at a grocery store or supermarket, even when there isn’t a grocery store in their area. But ironically, despite the demand for grocery stores, only 5% of the food sources found by Community Health Councils in the survey target area were supermarkets. So much demand and so little means to fulfill it.

The result is that the majority of food expenditures take place at fast food restaurants or convenience stores, often against the desires or ideals of the shoppers themselves. This exacerbates the crisis of chronic disease as few low-income people can find healthier food options, especially fruits and vegetables.

Much of these food expenditures also take place at locations outside of the community. This results in substantial economic losses for the community as the food dollars that are not spent locally do not contribute to a local economic multiplier, do not enhance the local tax base and do not enable residents to get the jobs that such expenditures create.

We need to put low-income communities back on the map and make the business case that they are emerging markets. Market studies need to be done that demonstrate that low-income areas have enough resources and enough capital to support a more robust local economy. By gathering this data we can assert our dignity and attract businesses to our neighborhoods to provide us with the goods and services we want and demand. But more importantly, we can use this data to mobilize our communities, train residents to become entrepreneurs, engage public officials, and establish local, home-grown businesses that can meet the needs and benefit economically from doing so.

As for politicians, developers and corporations who know and care little about the abundance in our communities? Oh well, it’s their loss. Let’s keep it a secret until our own communities can mobilize and seize the opportunities for themselves.

Brahm Amadi is the director of Peoples Grocery, a community food and urban agriculture project in West Oakland.