on food, according to Ken Smikle, president of Chicago-based Target Market News Inc. They also index higher in specific food categories. "Black households spend more money per capita than white households on virtually all food that requires preparation, as well as the seasonings, condiments and other items used with cooked foods. They spend as much as 200% more on these products than other ethnic groups," Smikle contends. Another study, No Place to Shop by Public Voice for Food & Health Policy, reported that urban African American consumers purchase a higher percentage of perishable items, including meat, than their suburban counterparts. The sales from perishable products represent nearly half of the total dollar amount of total supermarket sales. Clearly the data describing African American consumers indicates how significantly they impact the bottom line. But Johnson says even though the major chains claim to base their decisions on marketing data, they aren’t examining the data surveying minorities. "The assumption is that blacks purchase the same products that whites do," Johnson insists. "And that’s why the African American community remains untapped. What the major chains should do is take advantage of the experience of the black chains and work on joint ventures."
ARE NEIGHBORHOOD STORES IN THE FUTURE?
Even if the major chains don’t want to recognize the African American community as an area of opportunity, they may not have a choice. "The suburbs are flooded with grocery stores, so the urban communities are the only places the big guys can experience true growth," Johnson contends. "We’ve learned to work in the African American community and make money doing it. They [major chains] keep saying it’s too hard to do business in the inner city when they haven’t even tried."
Andy Erickson, researcher at Chain Store Guide in Tampa, Florida, also says there are other reasons the major chains are looking to inner cities, particularly African American communities, as a new frontier. "Although the movement is slow, the growing interest by minorities to purchase ethnic and regional foods has encouraged some of the major grocery chains to return to inner cities," he contends. He says supermarkets also want to reap the benefits from the success some cities have achieved in revitalizing their downtown areas. "Since most ethnic groups are in inner cities, supermarkets are moving into these areas to capture this market and capitalize on a new trend."
This "back home" effort is good news for consumers, but it could spell trouble for small, local merchants. "Many major chains are now going head to head with some of the African American grocers who profited when those supermarkets left black neighborhoods," comments Smikle. Baltimore-based Stop, Shop
and Save Food Markets (No. 36 on the be industrial/service 100 list) is one example (see "Dawn of the Black Millennium," June 1998). Last year, the chain was forced to consolidate its operations due to lost revenue. The Clinton Administration’s cuts in the food stamp program reduced sales for the grocer that primarily serves