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Supermarket Characteristics And Operating Costs In Low-Income Areas

Author

Listed:
  • King, Robert P.
  • Leibtag, Ephraim S.
  • Behl, Ajay S.

Abstract

Whether the poor pay more for food than other income groups is an important question in food price policy research. Stores serving low-income shoppers differ in important ways from stores that receive less of their revenues from Food Stamp redemptions. Stores with more revenues from Food Stamps are generally smaller and older, and offer relatively fewer convenience services for shoppers. They also offer a different mix of products, with a relatively high portion of sales coming from meat and private-label products. Metro stores with high Food Stamp redemption rates lag behind other stores in the adoption of progressive supply chain and human resource practices. Finally, stores with the highest Food Stamp redemption rates have lower sales margins relative to other stores, but have significantly lower payroll costs as a percentage of sales. Overall, operating costs for stores with high Food Stamp redemption rates are not significantly different from those for stores with moderate Food Stamp redemption rates. If the poor do pay more, factors other than operating costs are likely to be the reason.

Suggested Citation

  • King, Robert P. & Leibtag, Ephraim S. & Behl, Ajay S., 2004. "Supermarket Characteristics And Operating Costs In Low-Income Areas," Agricultural Economics Reports 34003, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uerser:34003
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    File URL: http://purl.umn.edu/34003
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    References listed on IDEAS

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    1. Fournier, Gary M & Mitchell, Jean M, 1992. "Hospital Costs and Competition for Services: A Multiproduct Analysis," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 627-634, November.
    2. Kaufman, Phillip R. & MacDonald, James M. & Lutz, Steve M. & Smallwood, David M., 1997. "Do the Poor Pay More for Food? Item Selection and Price Differences Affect Low-Income Household Food Costs," Agricultural Economics Reports 34065, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Leibtag, Ephraim S. & Barker, Catherine & Dutko, Paula, 2010. "How Much Lower Are Prices at Discount Stores? An Examination of Retail Food Prices," Economic Research Report 96767, United States Department of Agriculture, Economic Research Service.
    2. Bonanno, Alessandro & Ghosh, Gaurav S., 2010. "SNAP Efficacy and Food Access – A Nationwide Spatial Analysis," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116437, European Association of Agricultural Economists;Agricultural and Applied Economics Association.
    3. Heather Klemick & Elizabeth Kopits & Ann Wolverton, 2015. "The Energy Efficiency Paradox: A Case Study of Supermarket Refrigeration System Investment Decisions," NCEE Working Paper Series 201503, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jun 2015.
    4. Gillespie, Jeffrey & Hatzenbuehler, Patrick & O'Neil, Carol & Lin, Bo & Niu, Huizhen, 2015. "The Impact of Neighborhood Income on the Cost of Energy-Dense and Nutrient-Dense Foods in Supermarkets," Journal of Food Distribution Research, Food Distribution Research Society, vol. 46(3), November.
    5. repec:oup:apecpp:v:39:y:2017:i:4:p:682-709. is not listed on IDEAS
    6. Wendt, Minh & Kinsey, Jean D. & Kaufman, Phillip R., 2008. "Food Accessibility in the Inner City: What Have We Learned, A Literature Review 1963-2006," Working Papers 37625, University of Minnesota, The Food Industry Center.
    7. Bonanno, Alessandro & Chenarides, Lauren & Goetz, Stephan J., 2012. "Limited Food Access as an Equilibrium Outcome: An Empirical Analysis," 2012 AAEA/EAAE Food Environment Symposium, May 30-31, Boston, MA 123196, Agricultural and Applied Economics Association.
    8. Jaenicke, Edward C. & Chikasada, Mitsuko, 2006. "Separate Decision-Making for Supermarket Leaders and Followers: The Case of Whether or Not to Offer Irradiated Ground Beef," Journal of Food Distribution Research, Food Distribution Research Society, vol. 37(03), November.

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