The economic impact of new grocery store development
This report measures and explains the way that new grocery store development in underserved neighborhoods impact economic development. This study evaluates a new grocery storeÕs economic impact in six critical areas: 1) Job Creation 2) Income Creation 3) Tax Revenue Creation 4) Impact on Surrounding Residential Real Estate ) Impact on Surrounding Commercial Real Estate 6) Lower Food Costs The research shows that when these six effects areas are considered together, the potential economic impact of a new grocery store in a food desert is immense. The most important of these topics is the new stores ability to create jobs, local income, and it effect upon the surrounding real estate. National data shows that a new grocery store can have an employment multiplier of nearly 20, meaning that for every directly created job, 20 more are either created or supported elsewhere in the economy. Furthermore, between 50 and 75 percent of directly created jobs are filled locally, helping to pump income into the local communi . Thirdly, the opening of a new grocery store has an immediate and significant effect upon commercial and residential real estate. Data from the Pennsylvania Fresh Food Financing Initiative indicates that the opening of a new store instantly boosts home values by between four and seven percent and reverses negatively trending home values. While the effect on commercial real estate is less measurable, it is no less significant. The new store acts as an anchor retailer, attracting smaller retailers to the area and helping to reduce community vacancy rates and spur economic development. Lastly, the new store will reduce the cost of food to the local community by providing food at cheaper prices than local convenience stores and by removing many of the unnecessary transportation costs that food desert residents frequently encounter. Illustrating these potential impacts, the proposed development of a new Jack and Jakes Grocery Store on O.C. Ha y Boulevard in the Central City neighborhood of New Orleans is a perfect case study. As defined by the USDA, Central City is a low-income food desert. For years it has suffered serious economic decay that has seen its main commercial corridor, O.C. Haley Boulevard, become completely defunct. However, in applying national data and several widely accepted economic theories, this report concludes that the development of a new grocery store in this area is ideal. The new store will help to make community attractive to economic investment and redevelopment once again. By providing jobs and income to the surrounding community, retail demand in the area will be increased. This in turn will make the commercial corridor more attractive to businesses. Furthermore, as an anchor retailer, the new grocery store will further promote economic development by helping to apply downward pressure on community vacancy rates, both residential and commercial.