Retailers leaving the neighborhood

In April, Whole Foods announced that it was shutting — temporarily for now — a brand new and quite expensive flagship store in downtown San Francisco just a year after it opened the unit to much fanfare.

At about the same time, Walmart announced that it was closing four stores in Chicago, all of them in working- and lower-class neighborhoods of the Windy City. Target got onboard earlier, announcing it was closing units in the Minneapolis and Philadelphia as well as the Washington DC, suburbs.

Other retailers, like Whole Foods, Walmart and Target, that successfully handled the COVID-19 pandemic are doing the same thing. Most say the politically correct thing that lower foot-traffic, particularly in major cities and with more people working from home, is the reason for these closures. Some, like officials at Whole Foods, are bold enough to add that rising pilferage rates, and the inability to stop theft without putting their employees at risk and increased drug use in the surrounding neighborhoods are also major factors in the decision to close these stores.

The bottom line is that these are sound business decisions by retailers looking to profitably operate their stores and overall businesses.

The result, though, will end up hurting the communities where these stores are located. The simple fact is that many of the consumers living in these areas will no longer have easy access to a full variety of products they need and want to feed themselves and their families.

At the top of the list is produce. Not only a broad variety of produce, but the freshness and quality they deserve at a fair price.

Food deserts are a very real thing in rural areas and the inner cities, but over the last 10 to 20 years many retailers, big and small, have addressed this issue in major cities from coast to coast. Sensing a change in shopper behavior, as well as a desire by local governments to accommodate these retailers, many operators decided they would give urban retailing a shot. It worked for a while. Consumers were eager to have a greater assortment of product, better quality, fresher item and, yes, lower prices.

The retailers loved the numbers. First, the number of people who were walking through the door and, second, the numbers of dollars that accumulated in their cash registers.

That has changed now. With foot traffic down, retailers began to hesitate with the concept of doing business in urban settings. With pilferage up — and no end in sight to ending this new pandemic — they are drawing the line. To be clear, these stores will not be the last ones closed by retailers if state and local governments do not take steps to improve the safety of the neighborhoods they operate.

Consumers will get angry at the retailers for their decisions, but they should really start to put pressure on their own communities and governments for change. They are the only ones that can create the change needed to keep both retailers and the community happy.

Photo courtesy of Ivan Radic