MEMPHIS, Tenn. — A consultant hired by the city to lure a full-service grocer to two low-income Memphis neighborhoods says profitability would be a challenge, but she hopes to develop a “superstore” model that can be replicated across the city.
Rhonnie Brewer presented research to City Council on Tuesday for the areas around Third Street and Orange Mound where two Kroger stores closed this year. Residents say the closures have created food deserts, though both areas have Save-A-Lot groceries nearby.
But enticing new groceries into the neighborhoods will require creative solutions.
Fifty percent of residents around the Third Street location, and 40 percent around Lamar, qualify for government nutrition benefits. Memphis’ low population density also makes profitability difficult.
A grocery on Third would likely lose more than $300,000 in its first year, while the Lamar location would make about $39,000 a year, Brewer said.
That’s not the amount of profit a grocer would look for, Brewer said, but the difference could be made up by leasing space to banks, post offices or other retail.
“We can’t make someone do business in an area where they feel like they have a better opportunity someplace else, but that does not negate the need for food to be in those neighborhoods,” Brewer said.
Brewer is working with a company called Uplift Solutions, which has connections with several grocery chains, she said.