Silent stimulus

I think most people around New Orleans have at least heard that the new Whole Foods Market currently going up on Broad Street has benefited from the "Fresh Food Retailer Initiative" program which funnels federal recovery grant money toward grocers in under-served neighborhoods or "food deserts" as the current term of art labels them.

The Fresh Food Retailer Initiative launched in March 2011 with the goal of expanding access to healthy food and revitalizing neighborhoods. The city and its partner Hope Enterprise Corporation provided $14 million in Disaster Community Development Block Grant funds to the program.

Here's an article in AdWeek about Whole Foods' new strategy for expanding into "food deserts" in a few select cities including the new store in New Orleans.

The chain will launch pilot stores in Detroit, New Orleans and on Chicago's South Side in 2013 and 2014 that feature fewer staffers, lower prices, and more frozen and prewrapped food, said Whole Foods co-CEO John Mackey. "For every penny we cut off the price, we reach more people who can afford to shop with us," he said.

In anticipation of the Detroit store opening, the company has been offering classes in community centers about how to shop frugally at its store, focusing, naturally, on Whole Foods' own 365 private label line. Anne Howe of Anne Howe Associates, a shopper marketing consulting firm, commended the chain for going into so-called food deserts like parts of Detroit and New Orleans. "They are trying to serve the needs of communities that others ignore completely," she said.

Nothing in the AdWeek article mentions the federal stimulus funds spurring the development of the Broad Street store. I wondered if Whole Foods is taking advantage of similar programs in Detroit and Chicago too.

And guess what.

Detroit, MI -- Detroit Mayor Dave Bing joined Whole Foods Market executives, Detroit Economic Growth Corporation president and CEO George W. Jackson, Jr., and others to announce that Whole Foods Market has signed a lease to open one of its nationally renowned stores in the heart of Midtown Detroit. The 20,000 sq. ft. store will be located at the northwest corner of Mack Avenue and John R Road.

"I want to thank Whole Foods for recognizing that Detroit is a great investment," said Mayor Dave Bing. "The demand is here, because Detroiters are spending $200 million outside the city for groceries. Whole Foods Market and DEGC's Green Grocer Project are sure to bring those dollars back to Detroit."

And also

Now even Whole Foods Market Inc.—purveyor of $10 tubs of freshly ground almond butter and $6.99 individual crab cakes—wants to serve the hungry poor. Co-CEO John Mackey, speaking recently at the Economic Club of Chicago, says Whole Foods is creating a foundation, Whole Cities, to open subsidized stores in Chicago neighborhoods that lack access to fresh food as soon as this year. Other cities in Whole Foods' pilot tests are New Orleans and Newark, N.J.

It's nice that Whole Foods is exploring "pilot program" stores to bring fresh food to these neighborhoods. But it isn't the invisible hand of enlightened entrepreneurism that's guiding them to do that. They're responding to incentives created by deliberate policy decisions backed with grant funds.  I wonder why AdWeek doesn't write it that way.