It comes down to money

Jeffrey Brown, president of a company that operates 11 urban grocery stores, and chairman of nonprofit Uplift Solutions, told North Charleston community leaders that subsidies are needed to bring grocery stores into “food desert” areas.

Stores in low-income communities have higher costs, and customers who typically make smaller purchases and buy items with smaller profit margins. But they can be successful with the right approach, and a full-service store can improve the health of residents and also provide access to some health care and banking services, he said.

From the long-parched “food desert” in North Charleston to the West Ashley neighborhoods where a Food Lion will soon close, the simple act of buying groceries is a big hurdle for local residents without cars.

“What people do is run back and forth to the corner store, and they eat junk,” said Yvette R. Murray, who was shopping at the Food Lion on St. Andrews Boulevard. “They end up eating gas-station hot dogs.”

Murray has a vehicle, but worries about residents who do not.

As West Ashley residents were taking advantage of the Food Lion’s going-out-of-business sale Tuesday, community leaders in North Charleston were meeting with a grocery industry consultant about how to attract and sustain a full-service store to that city’s southern end.

That section of North Charleston has been a food desert since a Winn-Dixie at the Pinehaven/Shipwatch shopping center closed in 2005.

“When they closed down the Winn-Dixie, people had to go pretty far,” said Michael Green, who lives within walking distance of the now-vacant shopping center. “We really need a grocery store.”

Meanwhile, those without vehicles rely on buses, cabs, or friends for grocery shopping.

“I can’t get on the bus with a lot of groceries,” said Veter Price, who like Green was waiting Tuesday afternoon for a bus on Dorchester Road.

Grocery chain operator and consultant Jeffrey Brown said that with careful planning and appropriate subsidies, stores can thrive in struggling urban areas. Brown operates 11 ShopRite stores in Philadelphia and southern New Jersey, mostly in poor neighborhoods.

He said the challenge in food-desert areas, which lack grocery stores and typically have socioeconomic problems, is that store costs are higher but customers tend to make smaller purchases and buy fewer high-margin items.

The result, Brown said, is a financial gap that can swing a store from making a small profit to taking a loss, and that’s why subsidies are needed. He said tax breaks, credits and financing deals together need to reduce a store’s effective rent to about half the market rate.

“I’ve found that worker-training costs can be four times higher in a lower income areas,” Brown said.

But he’s been able to make the numbers work in Philadelphia, where real estate costs are high and most grocery store employees belong to unions, he said.

North Charleston is working to finalize a deal with a developer aimed at bringing a grocery store to the former Shipwatch/Pinehaven site, which the city bought and cleared for development. The deal calls for the developer to provide $1 million to subsidize a grocery store’s potential losses in the first three years, but Brown isn’t sure that’s the best approach.

The nonprofit Lowcountry Housing Trust is looking for ways to help, possibly with loan funds and help in securing federal tax credits. Access to reasonably priced, fresh food is a key to improving struggling communities, Brown and Lowcountry Housing Trust Director Michelle Mapp said.

The city’s $9.2 million deal to sell the shopping center land, plus the former Naval Hospital property across the street, is awaiting a final “due diligence” review by developer Chicora Gardens LLC.

“We honestly feel a grocery store can be sustainable there,” Mayor Keith Summey said.

The Rev. Bill Stanfield of the community group Metanoia said having Brown on board, consulting with Lowcountry Housing Trust, will help bridge the gap between what grocery store companies need to see financially, and what the city and community groups want.

In the meantime, North Charleston residents without vehicles will keep making do, and some in West Ashley are going to have to find a new way to get their groceries.

“Now I’m going to have to get the neighbors to take me to Piggly Wiggly or Doscher’s,” said Louis Brown Sr., who at 71 no longer drives, and is used to walking daily to the Food Lion from his Ashleyville home.

“We’re up the creek,” said Gloria Major, 65, of Maryville, who was walking home from the Food Lion on Tuesday.

“I can walk here, though I prefer to ride my bike,” she said. “Now, I’ll have to ask my brother for a ride.”

Reach David Slade at 937-5552 or Twitter @DSladeNews.