Kroger Donates Empty Store to Competitor to Stave Off Food Desert

Grocery chain Kroger is donating an empty store in South Memphis to one of its competitors to ensure that residents have groceries in their neighborhood.

The chain closed their supermarket on Lamar Avenue in the Orange Mound neighborhood in February, causing an uproar among locals who feared that they would not have any food options in their neighborhood, according to WREG.

Kroger met with numerous community groups as they struggled to find a new tenant to occupy the space. They reached out to 30 retailers and wholesalers to purchase the $500,000 building, but none took them up on the offer.

Shopping cart in supermarket
Shopping cart in supermarket Kwangmoozaa / Getty Images

After the closing, the Memphis City Council was approached by local resident Rhonnie Brewer asking them to fund a feasibility study examining the impact that the loss of the store would have on the community. The study found that the Orange Mound location would deliver profit margins that were lower than a traditional grocery could survive on, leading companies to choose not to invest in the space.

On Monday, Kroger announced that they would be donating the building at no cost to local competitor Superlo Foods, who will be using it to open a new grocery store.

Victor Smith, president of Kroger's Delta division, told the station "Since becoming the president of Kroger Delta in February, it has been a priority for us to keep our promise to the City of Memphis and the Orange Mound community."

The Commercial-Appeal reported that the Orange Mound Kroger had lost $2,677,665 since 2014. After it was closed, Kroger offered job placement to former employees at their 16 other Memphis locations.

Superlo has eight stores in the Memphis area, although none in Orange Mound. The Stepherson brothers founded their grocery business in 1944 and underwent significant growth in the early 2000s.

Randy Stepherson, president of Superlo's operating company, told the Commercial-Appeal that they had been interested in the space for some time.

"We would have been happy to do this a year and a half ago when Kroger announced they were closing two of their stores, but we're a small company — and we had just opened another store in Parkway Village."

Memphis mayor Jim Strickland credited several people and groups for the success of the project, saying "This was a true team effort between our administration, Councilwoman Jamita Swearengen, Kroger, SuperLo, and most importantly, members of the Orange Mound Community."

The company hopes to have the new Superlo opened by December 1.

A "food desert" is defined as a geographical region where access to fresh and healthy items, including fruits and vegetables, is limited or nonexistent.

According to the Department of Agriculture, 23.5 million Americans live in food deserts. Limited options for healthy food can contribute to obesity and other health conditions.

According to the USDA's map of food deserts, large areas of Memphis currently qualify, including all of the city's poorest ZIP codes. In 2015, a study by Feeding America reported that 198,610 residents of Shelby County were food insecure.

Kroger Donates Empty Store to Competitor to Stave Off Food Desert | News