Zohran Mamdani, the new mayor of New York City, soared to victory last year on a handful of ambitious promises. Among them was a pledge to open a city-owned grocery store in every borough to address the twin problems of food deserts and rising grocery prices.<\/p>\n
His idea hasn\u2019t yet evolved into an actual plan. Atlanta beat him: last summer, the city opened Azalea Fresh Market in the city\u2019s downtown neighborhood, a municipal grocery store backed by city funding.<\/p>\n
\u201cPeople need access to fresh food,\u201d Atlanta Mayor Andre Dickens said. \u201cFood is a critical part of a healthy community.\u201d Backing a grocery store is personal: As a high school student employed by Kroger, he had to take the bus or drive from his low-income neighborhood to get to work.<\/p>\n
The store is operated by Savi Provisions, a private company, and stocks the full range of products found in other grocery stores.<\/p>\n
Azalea Fresh Market has implemented what it calls \u201cPaul\u2019s Promise,\u201d 50 to 60 essential items like eggs and bread offered at \u201cthe lowest price possible,\u201d Nair said. Through supplier deals with the help of the Independent Grocers Alliance and higher profits from things like prepared food, the store prices items closer to cost. The store also accepts SNAP and WIC benefits.<\/p>\n
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<\/picture><\/span><\/div>\nAs the Trump administration cuts food programs, community-driven organizations keep people fed and cared for.<\/p>\n<\/div>\n<\/div>\n
So far the store is going well, according to Dickens and Paul Nair, CEO of Savi Provisions. Between 600 and 700 customers shop daily, with an average basket costing $13, demonstrating that people aren\u2019t coming for big monthly trips, but shopping frequently. While Nair aims to be doing \u201cmuch better,\u201d he said it\u2019s \u201con target.\u201d Savi has a second location in the Campbelltown Road neighborhood in the works, which is currently being constructed with the city\u2019s financial help.<\/p>\n
In Fulton County, where Atlanta is located, nearly 14 percent of residents are food insecure. The area where Azalea Fresh Market is located is \u201cdisadvantaged, disinvested,\u201d Dickens said. There hadn\u2019t been a supermarket in the downtown neighborhood in two decades. \u201cGrocers have historically avoided these neighborhoods due to low profit margins and perceived risks,\u201d he said.<\/p>\n
At first, Dickens tried to use the traditional approach of luring an established grocery chain to open up a location in both neighborhoods. He went to major brands and offered a potpourri of incentives: tax breaks, free land, help constructing the building. \u201cThey still didn\u2019t want to take it,\u201d he said. \u201cI got frustrated and was like, \u2018We\u2019re going to do it ourselves.\u2019\u201d<\/p>\n
Savi Provisions answered the city\u2019s request for proposal. The city kicked in $8 million in tax credits, grants, and loans, buying the land and demolishing the building that had stood on it. Savi put in $1 million of its own equity, and the two partnered with the Independent Grocers Alliance to tap into its purchasing power and technical assistance.<\/p>\n
The partnership with the IGA is meant to get around what has become a huge hurdle for small grocery stores: the power large retailers like Walmart and Kroger exert to extract pricing deals from suppliers. Through its larger footprint, the IGA can ink deals with distributors and suppliers to secure some of those lower prices for Azalea Fresh Market.<\/p>\n
The grocery business is challenging. Fresh food spoils quickly. Stores deal with things like theft and goods that arrive damaged. The margins come out quite thin\u2014between 1 to 3 percent for big box stores, and as much as 5 percent for smaller ones. It typically takes a new store three to four years to reach profitability.<\/p>\n
The idea behind Atlanta\u2019s investment is that it will support Savi in those early years so it can reach a point of self-sustainability. Dickens said the city is willing to back the store for three to five years; Nair wants to be sustainable within one or two.<\/p>\n<\/div>\n