Embed Size (px)
Citation preview
Social Enterprise Feasibility Study: Grocery Store in Carlisle’s Northside Neighborhood
Capstone Research Project
SINE 400: Senior Seminar in Social Innovation and Entrepreneurship
Maddy Braybrooke, Jessica Huang, Preeti Khanal, and Greg Oldsey
Professor Helen Takacs
Dickinson College, Fall 2018
1
Table of Contents
Executive Summary ................................................................................................... 2
Introduction ................................................................................................................ 4
Interview Data ............................................................................................................ 6
Selection of Social Enterprise Model
For-Profit Grocery Store Model Overview .................................................... 9
Bargain Grocery Store Model Overview ....................................................... 11
Non-Profit Grocery Store Model Overview .................................................. 15
Co-Op Grocery Store Model Overview ......................................................... 17
The Model We Recommend and Why ....................................................................... 20
Social Enterprise Feasibility Plan .............................................................................. 21
Bibliography .............................................................................................................. 29
Charts
Chart 1: For-Profit Grocery Store Model Pros and Cons .............................. 11
Chart 2: Grocery Outlet Bargain Market’s Pricing Model ............................ 12
Chart 3: Bargain Grocery Store Model Pros and Cons .................................. 14
Chart 4: Non-Profit Grocery Store Model Pros and Cons ............................. 16
Chart 5: For-Profit Grocery Store Model Pros and Cons .............................. 19
Appendices
Appendix 1: Interview Data ........................................................................... 31
Appendix 2: Complementary Student Research in SOCI 313: Building
Sustainable Communities............................................................................... 36
2
Executive Summary
The Problem:
The Northside Neighborhood in Carlisle is considered a food desert. Due to the vacancy of
affordable grocery stores in this location, there has been limited access to healthy food options
particular for low-income families. Corner stores and other grocery stores exist, but these current
options do not provide the proper variety, pricing and convenience needed to serve the
community’s needs. This need is a great opportunity for a social enterprise. Social enterprises
simultaneously address market and social needs.
Our Interview Research:
We conducted primary research to identify the needs and resources in this neighborhood and to
better understand the possibilities for a grocery store in Carlisle’s Northside. We interviewed
numerous people for this project that we categorized into three groups: community organizers
and planner, grocery store experts, and community residents.
Our Grocery Model Research:
We supplemented our primary research on grocery stores with secondary research on four
different grocery store models. The goal of this research was to assess the applicability of each
grocery store model to the needs and resources of the Northside neighborhood. These four
models (and the specific example we studied for each model) are: for-profit grocery stores
(PriceRite), bargain grocery stores (Grocery Outlet Bargain Market), nonprofit grocery stores
(Salvation Army’s DMG Foods), and co-op grocery stores (Mariposa Food Co-op).
Our Recommended Grocery Store Model:
We identified the bargain grocery store model as the most appropriate type of grocery store to fill
the grocery gap in Carlisle’s Northside neighborhood. Specifically, we recommend that a
Grocery Outlet Bargain Market be developed in the Northside. Our key reasons include that the
size of this store fits the available space, the philosophy and operations of this store are most
appropriate to the needs of this neighborhood, and this type of store would attract shoppers from
across Carlisle, which would help to boost its sales and long-term stability. The Grocery Outlet
Bargain Market model is an unique social enterprise opportunity for Carlisle’s Northside since it
addresses the food accessibility challenge and focuses on community involvement.
Feasibility Study:
Total startup costs to open a local Grocery Outlet Bargain Market in the Northside Neighborhood
are between $3.1 million to $4.7 million. Through its unique business model, Grocery Outlet
shares these startup costs with their independent operators of each store so as to minimize risk
for both parties. Independent operators typically make an investment of $205,000 on store
equipment and pre-opening programs. Grocery Outlet takes on a much larger share of the startup
3
cost by investing between $2.9 million and $4.5 million on real estate build out, lease liability,
and initial inventory.
The most competitive alternative is Walmart due to its ability to offer everyday low prices on a
broad assortment of products. The Grocery Outlet Bargain Market store we are suggesting would
be competing against the established routines and habits of the residents, the reputation Walmart
has in Carlisle, and Walmart’s affordable pricing. Grocery Outlet Bargain Market also provides
affordable prices, as well as a treasure hunt experience, strong ties to the community, price
comparisons, an easily accessible/walkable location and savings for people at all income levels,
therefore filling a need in the community that is not currently being met.
4
Introduction
The Carlisle community lost three major manufacturing employers in three years between
2008 and 2012. Faced with the reality of large job losses, a weakened tax base, and community
pride, it was clear that any plan focused on the redevelopment and revitalization of the northern
quadrant neighborhoods must be far-looking yet firmly based in the realities of today (Urban
Redevelopment Plan, i). With that being said, the new private sector owners of the Tire and
Wheel and IAC/Masland sites have indicated a willingness to consider the creation of a
walkable, mixed-use redevelopment concept that includes residential, commercial, and office
uses. The borough is taking a proactive role in working with the property owners to assure that
the redevelopment of the three former industrial sites maximizes their potential with regard to
job creation, tax revenue generation and community enhancement – all while complimenting the
existing downtown and meshing with the character of the surrounding neighborhoods and
community.
With regard to the magnitude of re-investment and transformation that could occur,
Carlisle officials have determined that the formation of a vision and goals for the project and
specific tangible outcomes must be based on broad community desires for the future of the
neighborhoods and the downtown. Therefore, public involvement at all levels should form the
basis of recommendations included in the Urban Redevelopment Plan (URP).
Ultimately, the planning process employed a strategy of inclusiveness, transparency,
education, careful design and commitment to identifying real and implementable actions.
Key themes were developed from the community vision process. These themes include:
1) Adding the success of any significant development intrinsically to the success and
“image” of Downtown Historic Carlisle
2) The new development must physically mesh with the established neighborhood and
community infrastructure (ex: extending the street grid, minimizing impact to
surrounding neighborhoods, relationship of buildings on the street, transportation
improvements cannot be auto-centric)
3) Determining the right mix of uses in order to form a high-quality public space (there is
an overwhelming desire for a grocery store as well as expanded food options such as
farmers markets, food co-ops, community gardens and greater dining options)
4) All activities should be as sustainable and fiscal as possible from an environmental and
fiscal perspective
5) Flooding and stormwater management are not only major community concerns but
encompass significant regulatory issues as well, therefore property owners want to be
sure that the new development improves existing problems through comprehensive
infrastructure upgrades rather than compounding the existing problems.
The Urban Redevelopment Plan provided a road map for how the community would
undertake a large-scale revisioning in the areas that were closed. The URP identified a grocery
store as desirable and allocated around 25,600 square feet for this potential addition. Despite
5
many developments and advances that have occurred in past years, Carlisle still has its
weaknesses.
Prior research by the community and by other Dickinson courses has identified the
Northside Neighborhood of Carlisle as a a food desert (Bedi, et al., 2018; Partnership for Better
Health, 2016; Project Share Hunger Stats). Due to the lack of access to affordable grocery stores,
there has been a scarcity of healthy food options for low-income families in this particular area.
Corner stores and other grocery stores exist, but these current options do not provide the proper
variety, pricing and convenience needed to serve the community’s needs. A characteristic pattern
for food deserts is to be surrounded by corner stores and fast food, which tend not to provide
fresh fruits and vegetables and tend to result in residents developing complex strategies to access
food outside their home neighborhoods. Student research from another course this semester also
supports the need for better access to fresh and healthy food in the community. Appendix 2
summarizes the findings from that other student research project that are relevant to our project.
Work done by the Partnership for Better Health’s Food System Roundtable1 identified
three populations that are most likely to experience food insecurity: single mothers, veterans and
farming community in poverty. The root causes include income insecurity, lack of family
financial skills, the generational cycle of poverty, unaffordability of food, food deserts, isolation
and lack of social networks, lack of transportation, mental health issues, lack of knowledge in
nutrition, and inadequate resources for food preparation and storage.
Major barriers to addressing food insecurity include geography, limited transportation,
and a low return on investment for businesses in food deserts. Additionally, there is a lack of
effective services, awareness of services and financial resources and family-sustaining wages.
Other challenges include language barriers, risks to undocumented populations, lack of
enrollment in SNAP, stigmas about food-insecure populations, and perceptions of agencies and
programs as difficult to navigate.
With all of the above, the roundtable members determined that all people have the right
to food security. Therefore, they seek to address food insecurity in a manner that empowers
people, builds on assets within families and communities and increases their capacity to access
and to prepare healthy meals in a manner that can be sustained long term.
Creating a sustainable food system is no easy feat. Ensuring that all residents have access
to healthy, affordable food options, minimizing the environmental impact of food production and
transport, facilitating/encouraging local food production, creating local jobs that provide fair
working wages and a living wage, benefiting local economies, and maximizing resources is a fair
amount compiled into one entity. However, our group acknowledges the complexity of this
problem, and we have decided to apply systems thinking to deal with the messiness. Systems
thinking has armed us with the ability to uncover the root causes of chronic problems, to evaluate
impact over time, to reduce people’s addictions to quick fixes, to champion earlier successes that
1 Roundtable members include: Representatives of Capital City Red Cross, Cumberland County Planning Office,
Central PA Food Bank, Dickinson College, Family Health Council of Central PA, Leaf Project, New Hope
Ministries, Partnership for Better health, Penn State, Project SHARE, Shippensburg University, South Central PA
Harvest Hub, and Wellspan Health.
6
also support people’s higher and longer-term aspirations, and to prompt people to reflect on the
difference between what they say they want and what they are actually producing. We have
determined that in order to fix something, we are first obliged to understand the whole system.
Our recommendations for this particular food desert situation stem from a strong effort this
semester to do exactly that: understand the whole system.
Therefore, there is much to contemplate when combatting a food desert problem in
tandem with redeveloping a former industrial site. Much might be an understatement, but
fortunately we have compiled research on some of the most valuable aspects of this current
situation. We plan to utilize this research with the intent of helping the stakeholders frame a
realistic, effective, and valuable plan for moving forward. The summarizations and
recommendations provided in the sections below address the interview data we collected among
three categories of interviewees, breakdown four different models of grocery stores, provide pros
and cons of each model, identify our mission statement, explain our theory of change, provide a
detailed explanation of our proposed grocery model, unpack performance criteria, detail our
competitive analysis and flesh out the sociopolitics. These summaries serve to highlight key
factors, themes and contexts that must be considered if this problem is going to progress toward
a solution.
Interview Data
In order to better understand the grocery gap and opportunities for a grocery store in the
Northside Neighborhood, we conducted interviews with community organizers and with grocery
experts as well as focus groups with residents. Community organizers were asked about the
needs, resources, barriers, and opportunities that were in place regarding the establishment of a
community grocery store. Grocery experts were asked about the startup and operating process of
their respective store models. The local residents were asked about how their current shopping
experiences and why they were attracted to certain stores. Furthermore, they were asked about
how a local grocery store might function in the Northside, and what factors it would need to have
in order to incentivize them to shop there. The following information emphasizes the key themes
expressed by both by groups. A list of interviewees and response data can also be found in the
appendix.
Community Organizers and Planners:
When discussing the issue of food accessibility in the Northside Neighborhood, many
community organizers addressed the idea of how local residents use a multi-layered shopping
system. While the residents of the Northside Neighborhood do not have a grocery store in their
immediate vicinity, they are still able to meet their grocery needs. Since the Northside is largely
low income, many believe that these residents use a mix of grocery stores in order to get the
items they need at the best prices possible. While Walmart may play a large role in this system, it
7
is believed that residents also use places like Giant, Weis, and Aldi so long as products are
affordable.
Using a mixture of grocery stores might provide lower income individuals with the
ability to get their groceries at low prices, however it also requires a fair amount of
transportation. Since Northside residents are largely low-income, transportation can be
particularly costly. Despite these costs, many community organizers believe that residents of the
Northside still have enough mobility to get their groceries. The Carlisle Circulator Bus, which
only lasted about four years, was implemented in part to provide low-income individuals with
cheap transportation to grocery stores. Yet, since the transit system failed to get any significant
ridership, many community organizers assumed that many Northside residents have some sort of
access to an automobile.
One of the key themes addressed by community organizers was the relationship between
zoning and economic feasibility for a community grocery store. The Carlisle Urban
Redevelopment Plan highlighted the importance of having zoning ordinances that supported both
the development of mixed income housing and a mixed-use retail. Furthermore, these two factors
were considered to be codependent. In order to support the ideal mixture of retail, new
residential development would have to have a combination of people with low, middle, and high-
income levels. Similarly, to support this mixed income residential development there would need
to be a mixture of retail spaces including amenities like grocery stores, drug stores, wholesale,
and electronics & appliances.
Despite the goal of having a mixture of incomes and retail usages, community organizers
have expressed concerns, that neither of these factors will be met. Current residential
development on the Tire and Wheel site has been exclusively low income housing. Furthermore,
there are no current development plans for the retail parcel. While there has been a need for new
low-income housing, many community organizers believe that there may not be enough middle
and high-income housing stock to create a diverse consumer base needed to support any mixed
retail development. Therefore, many organizers have stated that any retail on the site will need to
pull middle and high-income residents from other Carlisle neighborhoods.
Since the Northside Neighborhood is comprised of predominantly low income families,
community organizers are trying to understand what type of grocery store would be
economically feasible for the redevelopment site (Hunger Stats). Due to the demographics of the
Northside, some people believe that the only type of store that could operate in this space would
be a dollar store like Dollar General. Unfortunately, these stores do not typically carry the
healthy food that is needed in the local community. Furthermore, it is unlikely that a dollar store
would be able to attract any middle and high-income customers.
Since the economic feasibility of a local grocery store is somewhat unclear, many
community organizers want to understand the factors that might actually pull people to a grocery
store in the Northside. This is a difficult process, because individuals may share ideas for a
grocery store, but might not actually shop there once the store is built. Community organizers
were also anticipating what they thought would be important for the success of a local grocery
8
store. Along with competitively low prices, it is anticipated that a community grocery store will
need to be planned in a way that creates accessibility and would be attractive for residents of all
income levels from both the Northside Neighborhood and the broader Carlisle community. This
might include things like walkable streets, bike infrastructure, connected thoroughfares, and
sufficient parking spaces.
Finally, many community organizers believe that a local grocery store should be active
with engaging and promoting the local community. This type of local investment could include
programing like health education, cooking classes, and community partnerships, all of which
provide extended social benefits to the local community. Organizers suggest that this type of
programming can be established through partnerships with other local organizations, who
already have a keen sense for the residents of the Northside Neighborhood. A local grocery store
should target their programming efforts towards stakeholders such as youth, ethnic groups, and
religious organizations who play a key role in the Northside.
Local Residents:
As anticipated by community organizers, many residents of the Northside stated that they
use a mixture of stores including Aldi’s, Giant, Karns, Walmart, and Weis. Some individuals
stated that they use this mixture in order to get their groceries at the lowest possible prices. While
Walmart typically offered the lowest price points, these residents stated that they would use the
other grocery stores to if there were better deals being offered. While low prices played a
significant role for some people, other residents stated that proximity and convenience were the
most important factors for where they did their grocery shopping. Rather than looking for the
lowest prices, these individuals were selecting grocery stores based on the convenience of their
daily commutes. Due to this preference, many residents use grocery stores that are close to the
place of employment or where their children attend school.
Some residents also attributed their grocery store preferences, to the perceived quality
and the variety of products offered. For example, some stated that they used Walmart for basic
necessities like toiletries, cleaning products, and non-perishable foods, however they used Weis
in order to get higher quality meat and produce. Similarly, people would use Weis and Giant in
order to get more reputable brands. Based on their needs, a majority of residents stated that a
local grocery store would need to have competitively low prices, in order to incentivize people to
shop there instead of places like Walmart. Along with fair prices, residents want to see a grocery
store that offers a basic product mix . Rather than offering various products that are not in
demand, people want a basic mix of both food and nonfood items that they most often purchase.
This might include items like canned goods, produce, meats, toiletries, and cleaning supplies.
Since the Northside Neighborhood is comprised of various ethnicities, some residents would like
to see the products reflect this. The product mix should include brands that are fairly reputable
and of decent quality.
A local grocery store that promotes and supports the unique aspects of the Northside
Neighborhood is desired. Residents hoped that the grocery store would engage in partnerships
9
with other community organizations like Project SHARE, Hope Station, and the YWCA to
strengthen the local community. Furthermore, residents wanted to see a store that would host
education programing on topics like nutrition and cooking. An accessible and convenient grocery
store should have programming that is inclusive to all demographics of Carlisle’s residents. This
might be done through having adequate transportation routes, as well as convenient hours of
operation.
Many local residents also identified the need for a grocery store to create community
capital and social representation for the Northside Neighborhood. Since there is large black
population in the Northside Neighborhood, some individuals want the grocery store to reflect the
community through having black owners and operators. The presents of community
representation in positions of leadership is important in the Northside Neighborhood. Due to the
large diversity of the neighborhood, representation of individuals from all different ethnicities,
races, and religions is a need. Including key stakesholders of the Northside Neighborhood and all
potential customers, these diverse groups of people want a grocery store that the provide
equitable representation.
Selection of Social Enterprise Model
We studied four different grocery store models to assess their applicability to the needs
and the resources of the Northside Neighborhood. The four models are for-profit grocery store,
bargain grocery store, nonprofit grocery store, and co-op grocery store. Below are the
summaries of each model along with their pros and cons for why each model was considered as
an option and which one best fits the needs and resources of this particular community.
A. For-Profit Grocery Store Model Overview
The for-profit traditional grocery store model was studied due to the feasibility of a
company such as PriceRite to develop in the area. PriceRite served as our example for this
model. Different factors were considered in developing a feasibility assessment for PriceRite’s
potential expansion into the Carlisle Northside. The information provided below on the for-profit
grocery model is based on an interview with a real estate developer named Tim Harrison.
The potential grocery store starts with analyzing if the parcel of land is appropriate for
their prototypical model or not. The next step would be determining the consumers. A grocery
store such as PriceRite would analyze the socioeconomic (education level, income level,
ethnicity, population density) breakdown of the surrounding neighborhood and gather
information from the census that provides an overview every 10 years. Once the dynamics of the
surrounding neighborhood are understood, the economic volume a grocery store can generate
from this neighborhood is considered. According to Harrison, if an average person buys around
$40 a week of merchandise, not just food products, and 10,000 people live within a
neighborhood about one mile from the grocery store, it’s safe to assume that people who live
10
within one mile of the grocery store will shop at the grocery store due to convenience. So if there
are 10,000 people spending around $40 a week, that comes out to a baseline of $400,000. Over
the course of 50 weeks, that’s about $20,000,000 a year in sales volume for PriceRite. It’s a
promising start if the $400,000 baseline is present. The next step would be to look at the next
mile. Therefore, the more dense the population, the better. PriceRite’s margins are lower, the
prices are lower, and it requires less labor to function. PriceRite’s typical model is 40,000 square
feet but they happen to have a smaller model that could function in around 25,000 square feet
(about 3 or 4 acres).
PriceRite does have to worry about shrink and competitive food volume. Shrink accounts
for the merchandise that disappears from the store and has not yet been purchased. This may
include food that has expired and therefore leaves the store through another pathway for example
thrown out or donated to a food bank. It could also include food that has been stolen. Ultimately,
shrink affects profitability. Grocery stores account for lowering their prices and assume that their
shrink will be higher than the reality. Grocery stores aren’t going to be overly optimistic about
their shrink. They are going to take a very conservative path and attempt to plan for the worst-
case scenario. Just because you place a grocery store in an area doesn’t mean that the food
volume stays the same. A new grocery store results in a potential redistribution of food volume.
It is this expansion of volume that causes the grocery store to determine what percentage of sales
volume the new grocery store could take away from the existing stores. The new grocery store
would determine the competitiveness of each surrounding store and decide if it could hold its
own against the existing stores. This comes down to the qualitative strength of the stores in the
area.
Grocery stores are very low margin businesses. They need high sales in order to achieve
their 3% profit margin. For example: PriceRite would have to sell $100 worth of food in order to
get $3 back. This brings us to the cost of operation. Most food stores don’t own their locations.
They lease them. They pay rent to a landlord, and they do this because if they pay rent then they
don’t have to invest money in building the building. Instead, the landlord earns a return on
investment through the rent paid by the store. When the grocery store evaluates rent, there are
benchmarks that they use to evaluate rent in correlation to prospective sales. If the grocery store
fills out all the benchmarks and determines that the business would not make the 3% profit
margin, then it would not start a new store there. Ultimately, PriceRite has a better chance of
reaching its profit margin if the rent is decreased. The end goal is to offer a lower rent that allows
the grocery store to feel confident that it will reach its 3% and that offsets all of the constraints.
The below chart summarizes the various reasons PriceRite would and would not suit the
Northside Neighborhood.
11
Chart 1: For-profit Grocery Store Model Pros and Cons
B. Bargain Grocery Store Model Overview
The bargain grocery store is the second model of focus for our research. We have used
the Grocery Outlet Bargain Market, the nation’s largest extreme value grocery retailer, as our
example for this model. Grocery Outlet Bargain Market will be referred to as just Grocery Outlet
for this report. The bargain grocery store model uses ‘opportunistic buying’ which finds top
quality products at extremely low prices. This is the key difference between the standard grocery
store and the bargain grocery store. The bargain grocery stores are able to buy lower cost
products from suppliers and sell to customers at low prices while maintaining strong economic
margins for the grocery store. Grocery Outlet claims “you’ll find brand-name groceries and farm
fresh produce at up to 40-70% off conventional retail prices” at their stores ("Our Company").
12
Chart 2: Grocery Outlet’s Pricing Model
Source: https://groceryoutlet.com/our-company/how-we-do-it
The ideal consumer for this model is the thrifty shopper. This is including both the shopper on a
budget and the shopper who just like discounts. This bargain grocery store gives people an
affordable way to feed their families and it provides access to food for low income people. The
goal is to draw and meet the needs of a range of consumers. Focusing on providing low prices is
how they accomplish this. The typical supermarket is about 47,000 square feet while the average
Grocery Outlet is approximately 15,000 square feet (Grocery Outlet Bargain Market, 5). The
square footage of Grocery Outlet varies between 9,000-27,000 square feet. Location is dependent
on size, regional demographic, household income, family size and trade area population. New
operators should expect to invest approximately $205,000 before assuming control of store
operations. The remaining initial investment costs is taken by Grocery Outlet, which includes
location renovation, the building lease, the inventory and the access to bargain products (22).
For the grocery store expert interview, a group organized by Professor Helen Takacs
went to speak with Justin and Ellie Maenner, the operators of the Grocery Outlet Bargain Market
in Chambersburg, PA. This group included Bob Weed, Gail Witwer, Professor Takacs and a
member of the SINE 400 seminar. Because this model is not as familiar to people, seeing the
store and the items in each aisle helped everyone get a better sense of the space and its potential
in the Northside Neighborhood. Currently, the closest Grocery Outlet locations to Carlisle are in
Chambersburg, Hanover, and Mechanicsburg. After researching the model using the “Grocery
Outlet Independent Operator Information Report”, Justin and Ellie Maenner helped fill in some
gaps and answer questions, for example how, as operators, they focus on being a community
grocery store. Since everyone saw the grocery store not only as a way to address food access but
also as an opportunity for creating an inclusive community space, we wanted to ask about how
the grocery store operators bring the community aspect into the store. Not only is community
engagement a large focus for them in their personal lives but also in the events in the store. They
13
try to have the store be involved in fundraising for local non-profits and have their staff reflect
the diversity of the community.
To give some background information, the Grocery Outlet business model started in 1982
and has continued to expand since then. Their current locations include California, Idaho,
Nevada, Oregon, Washington and Pennsylvania. Grocery Outlet is the management team who
partners with independent operators. Each store is a local, independently run family business
with the support of Grocery Outlet. Like the Grocery Outlet in Chambersburg, most Grocery
Outlets are operated by husband-and-wife or partner teams. They ideally employ multiple
generations of family members. Grocery Outlet and the operators split the profits 50/50.
Candidates for Grocery Outlet operators must have a responsible financial track record, a passion
for retail, an entrepreneurial motivation for business ownership and a willingness to involve
themselves in the community (17). There is a high degree of vetting before becoming operators.
Operators receive inventory on consignment from Grocery Outlet. The operators typically order
about 70% of the products on the shelves so they have a lot of control within the store. For the
Mechanicsburg Grocery Outlet, produce is 80% normal store prices and 20% hot deals on
weekends. They try to stock the staple just to be able to have it for the community. It is important
for them to be able to fill that need for customers. Also keeping up with brand standards and
having high quality products is key for the operators.
There are many advantages that were found while researching this model that helped
advance consideration for this model as a potential fit in the Northside Neighborhood. One
advantage to this model is how it addresses a need of efficiency for suppliers. Systems thinking
can be used to examine the supply chain, and the system is not as linear as it may seem. Due to
inconsistencies or errors, a portion of product may not be able to be sold through traditional
pathways like traditional grocery stores. The loss of time and efficiency impact the revenue of
these big company suppliers. For the grocery store operators, their responsiveness to this system
issue helps create a niche in the market for them. They take supplier surplus and turn it around to
create profit and great deals for consumers. Grocery Outlet is a solution for this market problem
which is mutually beneficial for the suppliers, Grocery Outlet and consumers. “It’s always been
built on trust, integrity and respect” according to Co-CEO MacGregor Read (5). These are key to
building this bargain grocery business model. It is important to note that BB’s Grocery Outlet is
a discount grocery chain utilized by Carlisle residents. BB’s Grocery Outlet specializes in quality
salvage and surplus merchandise for the community. There are four store locations present in
south central Pennsylvania; however the closes store location is about 30 minutes away from
Carlisle. This is a grocery store that was mentioned in a positive manner by our interviewees.
Nonetheless, as every model has its pros and cons, so does this model. Below is the summary of
all pros and cons for this model to fit the needs, wants, and resources of the neighborhood.
14
Chart 3: Bargain Grocery Store Model Pros and Cons
15
C. Non-Profit Grocery Store Model Overview
The third model that was researched was a non-profit grocery store model such as DMG
Foods in Baltimore opened by the Salvation Army. This model is focused on serving the
community by providing healthy and affordable food in the form of a grocery store along with
cooking classes and workforce development (Browne). DMG foods stands for ‘doing the most
good’ and is known to be the first grocery store in the nation to combine social service to a
traditional grocery shopping experience (“Who we are"). The store opened on March 7th, 2018,
very recently, and has been highlighted in different business arenas even since its grand opening
(Browne). During the multiple protests in Baltimore in the year of 2015 as a result of Freddie
Gray’s death, Major Hogg, the current CEO, was involved in providing food and other essential
resources when everything else shut down for the residents (Helmstadter). During this time
period, many stores were destroyed and people lost access to proper food resources. Due to this
reason, Major Hogg decided to investigate on building a non-profit grocery store which we now
see as the DMG foods (Helmstadter). The uprising of scarcity for food led Major Hogg into
planning this pathway for people to still have access to healthy food at an affordable price
(Browne). Even though the store just opened up, this store has become talk of the town and many
people are positively reviewing the store. Therefore, considering the success and its unique
model for serving the community, the following research is being done to assess its fit into an
area known to be a food desert, the Northside Neighborhood.
As mentioned above, DMG foods is a non-profit model grocery store developed by the
Salvation Army to provide healthy and affordable food for everyone in the community. This
store provides social services such as nutritional guidance, shopping education, workforce
development and meal planning (“Who we are”). Due to the fact that this store is built on
funding and grants, many equipment and store essentials have been provided by other
community resources around the city. The stock that gets distributed every day comes from C&S
Wholesale Grocers, the nation’s largest independent grocery distributor, which gives a discount
to Mr. Hogg, the CEO of the grocery store (Block). Community resources such as partnering
with the local farms, meal solutions, supplemental benefits, and workforce development
opportunities were found to be tremendously helpful for the store (Browne). Developmental
corporations, food banks around the area, foundations, employment development are other
community resources (Bonessi) that have been helping the store function steadily and contribute
to healthier eating habits. Due to the constant input of shareholders so far, the store has been
running smoothly. However, how long the store will be able to sustain is a question no one can
answer just yet. Consumers need to use the store on a regular basis. If not the revenue decrease,
and it won’t take long for the store to close down.
Creating a non-profit grocery store comes with many challenges. As a model that has not
been used or studied extensively before, this can add few constraints into using a new model to
16
resolve food desert issue in this neighborhood. Lack of funding and the financial inadequacy are
the biggest concern for such stores to sustain for a longer period of time. According to the New
York Times, the store not only needs funding, but also workers that work full time (Severson).
Fortunately, the DMG foods are able to provide employment opportunities as well as training for
these employees (Severson).
Chart 4: Non-Profit Grocery Store Model Pros and Cons
In order to start this non-profit grocery store model, a $2.2 million investment was made,
and it is new being operated in partnership with the Maryland Food Bank (Severson). DMG
17
foods bought a warehouse in 2015 for $428,100 when the idea was first being established. Their
operating costs are low because the Salvation Army handles human resources and some other
business operations and the power company takes a quarter off the energy bill (Severson).
Donations and grants pay for education and training. Some of the pros and cons are listed above
in the chart for this grocery store model.
D. Co-op Grocery Store Model Overview
For our last model, we looked into the co-op grocery store model as a possibility.
Mariposa Food Co-Op in Philadelphia served as our example for this model. A co-operative, or
co-op, is an organization that is voluntarily controlled and owned by multiple individuals,
otherwise known as members, who directly use and contribute to the organization (NFCA).
These members are responsible for making both equitable and democratic contributions to the
organization. The underlying purpose of the co-op is to meet the collective economic, social, and
cultural goals of its members. The model for food co-op was strongly considered because it acts
as a resource and a way to build community. A food co-op is a grocery store that utilizes the
same key structures and principles outlined by the ICA, in order to provide food to its members
(FCI). While food co-ops can be owned by employees and producers, most are consumer-based
stores that are owned by the members who shop there. These members make equity payments
that are pooled together and used as part of operating budget of the grocery store (FCI). The rest
of the capital, comes from the purchases made by customers. While not every customer is a
member, those who are members have access to certain price benefits such as discounts on
certain products. Members also benefit from a having a level of democratic control in the store’s
decision making process. This benefit allows members to identify the specific foods and products
that they will be able to purchase within the store (FCI). Starting a food co-op is a fairly difficult
and time-intensive process. Co-ops must specifically focus on building membership, raising
capital, locating the right site, and hiring effective managers (FCI). According to research done
by Stuart Reid of the Cooperative Grocer Network, most startups fail because of they are unable
to accomplish these four tasks (Reid). Since the goal of food co-ops is to cater to the specific
needs of their members, product decisions will usually be based on the what members have
decided they want to buy which would be good for the Northside Neighborhood as they have
specific demands they would like to see at a grocery store.
However, it has been shown that higher income individuals often have more time and
utility to participate in the democratic responsibilities of co-op membership. Since the co-op
model places emphasis on community engagement, members can connect the grocery store to
other community organizations that they are involved with. Like any retail store, food co-ops
look to select a location that is visible, accessible, and sufficiently sized (Suassuna). Sites that are
highly visible are in locations that draw in customers who are both walking and driving. These
locations are mostly identified during the feasibility study, when research is focused on
pedestrian and automobile traffic patterns. These sites must also be of a sufficient size. The
18
estimated minimum square footage of food co-op is around 3000 square feet (FCI). Food co-ops
must be located in a site that is accessible to a large customer base. For sites located in dense
urban areas, good locations are often located near public transportations stops and walkable
streets. For food co-ops that need to be accessed via car, sites are often located off of roads that
move towards dense residential areas.
In order to open a food co-op, organizations will need to have a sufficient amount of
startup capital. It is estimated that the minimum amount of startup capital needed is between
$350 and $375 per square foot of leased retail space (FCI). In order to raise this capital, co-ops
need to be very proactive in obtaining grants, loans, and donations. However, it is estimated that
between 50%-60% of startup capital is from owner equity. Furthermore, once the co-op has
started, each store will need to hit a certain level of weekly sales in order for continued operation
to be financially feasible (FCI). This level of sales is unique to the economic factors of each
respective store. In order to operate successfully, food co-ops also need talented individuals
running the organization (FCI). These highly talented individuals are board members, paid staff,
project managers and general managers. They are also supported by highly competent
individuals, that are external to the organization, such as lawyers, consultants, and architects.
What makes all of these individuals so talented is their experience (FCI). Since the business
model is so unique, it is important have individuals within the organization who have significant
experience in handling the intricacies of co-op. A great example of this model is the Mariposa
Food Co-op.
Founded in 1971, The Mariposa Food Co-op is one of Philadelphia’s oldest and most
successful co-op grocery stores. AJ Hess, Mariposa’s general manager, was able to provide key
insight about the grocery co-op model. When discussing the start-up process, Hess explained that
any co-op begins with identifying a community need. The goal of the co-op founders is to try
find a way to meet this need. Hess stated that from these initial steps, the development process
will take nearly 10 years until production of a co-op begins. Hess made it clear that this is a fairly
long-time table that takes lots of collective management and dedication. In defining the
consumer base, Mariposa has draws a diverse group of individuals. The community surrounding
the store is predominantly composed of different people of color. However, some of their price
points can make the customer base less socioeconomically diverse. Essentially, they are able to
pull in middle to high income individuals from many different backgrounds, however they
struggle to get lower income individuals. Based on the interview and research, a list of pros and
cons are summarized below.
19
Chart 5: Co-op Grocery Store Model Pros and Cons
20
The Model We Recommend and Why
We are recommending the bargain grocery store model. When comparing the research on
each grocery model and the expressed needs of the community from interviews, we found that
this model would best suit the Carlisle’s Northside Neighborhood. Generally, the characteristics
of a bargain grocery store match the location’s needs. This model does not require a large parcel
of land and is typically smaller than a standard grocery store.
Bringing a Grocery Outlet into the space would mean that it would be an independent
local store, but have the support of the Grocery Outlet management team to help with initial
barriers and ensuring continued success. The risks of starting a new store is shared by
independent operators and Grocery Outlet. That includes shared initial investment costs. Grocery
Outlet would help build needed renovation, take on the lease, provide access to bargain products,
and provide inventory on consignment for the operators (Grocery Outlet Bargain Market, 22). By
having this additional economic capital and support for implementation of a grocery store,
Grocery Outlet can be an advantageous choice.
When thinking about how the grocery store will act as a community space, the Grocery
Outlet model makes it a priority to have well-vetted grocery store operators who are invested in
the community engagement. We can guarantee the grocery store would become better integrated
in the community. This is important since there will be a high number of residential housing in
close proximity to the location. Not only do store operators incorporate community events like
fundraisers into their store, but, in their personal lives, they are also highly involved members of
the community.
Most importantly, this model has competitive low prices which is a major concern for the
community. Groceries and farm fresh produce are up to 40-70% off conventional retail prices
(“Our Company”). As an independent store, this bargain grocery store would be a local
investment and more money would stay within the community.
One great benefit of the bargain grocery store is that it provides solutions for people at
both ends of the supply chain. The bargain grocery store solves the issue regarding inefficiency
for suppliers. When suppliers encounter challenges with inefficiencies such as overruns, surplus
inventories, repackaged products and perishable foods, Grocery Outlet can buy the products, and
using flexibility, speed and responsiveness, they can provide great deals for customers (Grocery
Outlet Bargain Market, 14). On the customer end, the bargain grocery store can provide a
solution for people of low income. One of the biggest challenges is referred to as the “cliff
effect”. This describes the situation where the purchasing power of individuals decreases as they
earn a larger income, since the the eligibility for support programs are income based. Eligibility
for these programs is below 200% of the FPG according to the Indiana Institute for Working
Families (“The Cliff”). After gaining employment and an income, they lose the benefits of these
21
supportive programs. Without the support, their low wages are not adequate to meet their basic
needs. A bargain grocery store could act as a stepping stone for people to gain self-sufficiency.
The great deals are ideal for people on a budget.
The exciting aspect though is that this model is not only for low income customers. This
is a high draw factor for all people because of the low prices. A concern of the community was
that they needed to establish a grocery that would bring people from outside the Northside
Neighborhood in order to be economically sustaining. The bargain grocery store would fill a
niche market that is not yet present in Carlisle. There are other standard for-profit grocery stores,
but a bargain grocery store has the potential to bring in additional customers that may not have
the location on their typical route. Depending on the amenities provided, the bargain grocery
store can provide a different experience for customers. The community is excited about the
potential to walk to the location. Without compromising the staple items, Grocery Outlet is able
to use the opportunistic buying approach to provide an exciting variable selection at a bargain.
This could be a welcome change from the standard grocery store experience. Judging by the
success of the BB’s Grocery Outlet in Newburg, this type of model has an excellent reputation
and would be well received in Carlisle. Some residents of the Northside Neighborhood already
make approximately a 30 minute drive to take advantage of the bargain discounts. A bargain
grocery store in the Northside Neighborhood would increase access and convenience to this
demand. Presumably, this niche market could also draw customers from outside the Northside
residents similarly to BB’s.
Key Reasons for the Bargain Grocery Store Model:
● Site’s location and size match model’s characteristics
● Support of the Grocery Outlet company decreases operators risk
● It would be a independent local store
● Model emphasizes community engagement
● Competitive low prices
● Solution to supply chain problem
● Solution for the “cliff effect” problem
● Niche market with a high draw factor
● Provision of staple items and various selection
● BB’s Grocery Outlet is an example of this model’s success in the community
Social Enterprise Feasibility Plan
Mission Statement: Address the grocery gap in the Northside Neighborhood of Carlisle, PA.
22
We believe all members of the Northside Neighborhood are entitled to access to fresh and
healthy food. We also believe that residents deserve affordable groceries that cover their basic
wants and needs at a location that is accessible and fosters a sense of community.
Based on these beliefs, our theory of change is that if a bargain grocery store is established in
the Northside Neighborhood, then:
a.) the residents would gain convenient access to groceries at an affordable price
b.) the community would benefit socially and economically
Solution
Size in square footage:
In this feasibility plan, our social enterprise will be based on the Grocery Outlet as the
bargain grocery store model. We believe this model would service the needs of the community
the best. The space set aside for a potential grocery in Carlisle is 25,600 square feet. For the
Grocery Outlet model, the size usually falls between 9,000-27,000 square feet. As we found in
one of our Grocery Outlet expert interviews, the ideal grocery store would be 17,000 total square
feet. This would mean approximately 14,000 square feet of floor space. The Grocery Outlet
parameters align with the parcel’s location. Accomplishing the goal of creating better food
access does not require a gigantic store and the size of the bargain grocery store model would be
well suited for the Northside Neighborhood.
Hours of operation:
The hours of operation for Grocery Outlet are from 8AM to 9PM Monday through
Sunday. This would respond to the residents’ concerns for accommodating hours, for instance
later hours and weekend hours. A reliable community grocery store must cooperate with
community needs, and the bargain grocery store would address this concern with their hours of
operation.
Probable number of managers and employees needed to staff the store:
Rather than franchising, Grocery Outlet has a licensing model. This means that the
Grocery Outlet opens stores in new markets and that most owner/operators are licensees. The
independent operators in the Grocery Outlet model act as owners and managers of the grocery
store. Part of the Grocery Outlet model is centered around highly motivated operators. They
value creating community and see how a family grocery store may bring the community aspect
into a retail space. This is why Grocery Outlet operators tend to be husband and wife or partner
teams who have a stake in and are invested in the community. The hiring and training of
employees is the responsibility of the operators. Due to the small scale of the grocery store,
typically a staff of about 30 people is required. The members of the staff should represent the
community surrounding the store, so this means more employment opportunities to this
23
neighborhood. Staff training is typically 30 days long. To strengthen the food accessibility
system, operators and staff should be building partnership and programing to strength the
grocery store’s capability to provide resources to the community.
Rough estimate of start-up costs:
Due to their unique business model, Grocery Outlet shares the startup costs with their
independent operators, in order to minimize overall risk for both parties. Grocery Outlet takes on
the three most expensive risks, which are real estate build out, lease liability, and the initial
inventory. The typical build out costs for either a leased or purchased space is between $1.5
million to $2 million. Over nearly a ten-year period, the corporation will also pay between $1
million to $2 million in lease liability. Finally, grocery outlet will invest $400,000 to $500,000 in
the initial inventory needed to stock the store. In total, the corporation invests between $2.9
million and $4.5 million in startup costs. Independent operators take on much less risk, as they
are only investing about $205,000 dollars in total startup costs. The majority of this investment is
spent on basic store equipment like forklifts, balers, POS systems, grocery carts, store fixtures,
and other miscellaneous items. This typical equipment package will cost the about $135,000. The
rest of the operator’s investment will go to pre-opening items, such as employee training and
business licenses. This investment is typically around $70,000.
Possible sources of start-up funding:
Due to Grocery Outlet’s large economic growth and ability to scale up, the corporation
has become largely self-sufficient in acquiring funding for new stores. Therefore, they are able to
use their revenue from other operations as a means of financing their part of the startup costs.
The independent operators can acquire their portion of the startup investment, through many
different channels, such as personal equity, loans, or grants. In some cases, Grocery Outlet will
even provide additional financing for operators that might not be able to collect the needed
amount.
Potential programs, partnerships, or collaborations with community organizations:
In addition to providing healthy food and groceries at convenience, the grocery outlet can
also implement programs that can attract consumers and encourage a healthy community.
Throughout our research on different grocery store models, education has been noted as an
important factor that needs to be addressed in order to promote shopping for nutritious items.
In order to promote healthy lifestyles in the Northside Neighborhood, education programs should
focus on how to identify and cook healthy foods.
The grocery store would also be accessible for people that lack transportation or even for
people that would be going out of convenience. Being able to walk to the store without the issue
of needing a car to bring back groceries can also be solved due to the location of store. A
program that could create a park near the store for different purposes such as exercise, and
playgrounds for kids when parents come to buy groceries can also attract many consumers.
24
Having students from Dickinson College volunteer into even building the park to stationing them
during common hours to look after the kids while parents go in to get groceries can have an
impact of building a connection with the store for consumers.
In order to have the grocery store become a part of the community, people need to
perceive and make use of the store as a community space. Being personally involved with the
store in terms of making suggestions of how the owners of the store can sustain is another
potential program that can be initiated. For example, creating a suggestion box for community
members with addition of what they would like to see in the store and partnering with other
organizations in town to make this happen can also help the store to be a community store. The
owners itself are always said to be involved in the community and foster relationships that build
upon the values of the store being a part of the community. Therefore, having consumers also
invest their time and effort into helping owners to foster such relationships can be promoted
through this program and partnerships. There are many different partnerships and collaborations
that can be done with organizations around town to create a community environment for the
people living in Northside Neighborhood with the inclusion of new grocery store.
Different partnerships such as Project SHARE, and Farmstand can help the grocery store
with providing local foods if needed and even market the store for a better purpose of making the
store become a part of the community. Project SHARE and the Farmstand food pantry are local
community resources that provide healthy and essential groceries for people who qualify for
food stamps or just are in need for fresh food in general from framstand. Even though, you need
a certain income qualification to have access to Project SHARE, farmstand does not require one
which has been a great resources for people in the community. Therefore, they have a great
amount of influence on where and what people shop for groceries. In addition to them, churches
around town such as New Life Church can also be collaborated as partners to serve different
purposes in making the grocery store a community store rather than just a new corner store in
town. More organizations such as the Hope Station, Project LEAF, Partnership for Better Health,
Chamber of Commerce, Dickinson College and other school districts, local government, and
even Cumberland County Housing and Redevelopment Authority have an impact and are a big
part of the community in the Northside Neighborhood. Therefore, using these influential
resources to help grocery outlet fit into the community can advance for the higher use of
sustaining the store.
Grocery Outlet is known to base their operating methods on the population they serve
through things like product selection or pricing. Through partnering with other local
organizations that understand the neighborhood, Grocery Outlet might be able to gain a better
understanding of how to focus their strategies on the Northside Neighborhood. This will create
duel benefits for both residents and the Grocery Outlet operators. Residents can have their
unique preferences met, while Grocery Outlet will be able to better understand the products that
might sell best.
Performance Criteria
25
In order to measure the performance of the Grocery Outlet as both a for-profit store and a
social enterprise, two key units of impact will need to be analyzed (MacMillan and Thompson).
There will need to be a unit of revenue that can be used to measure the financial performance of
the grocery store. There will also need to be a unit of social impact in order to measure the
benefits that are being provided to the residents of the Northside Neighborhood. In order to gain
community trust, it may be valuable for Grocery Outlet and their operators to specify the value
that is being placed on social impact and financial impact.
It is important for Grocery Outlet to measure their financial performance in order to
understand if they are meeting the level of revenue needed to operate. Retail stores typical use a
mixture of performance metrics and units of revenue. Grocery stores typically focus on sales per
square foot as it is good indicator of the efficiency of sales based on the floor space and layout
(Vend, 5). Furthermore, this metric helps determine how effective managers are at generating
revenues in their space. Based on their unique business management model, Grocery Outlet
might be able to use this metric to better evaluate and assist their independent operators.
Measuring the social impact of a Grocery Outlet is equally as important as understanding
its financial performance. From the information provided by stakeholders of the Northside
Neighborhood, a grocery store should create accessibility, education, and collaboration. Since
the Northside Neighborhood has a large low income population, Grocery Outlet might want to
measure accessibility in terms of the affordability of their products for low income customers. In
order to measure education, the store might want to monitor how many community programs
they have created and the amount of attendance in these programs. Finally, Grocery Outlet might
want to measure collaboration by how many partnerships they have formed with other
community organizations that serve the Northside Neighborhood. These metrics can be adjusted
over time, so long as they continue to measure the social impacts on the community.
Competitive Analysis
Walmart currently offers the best alternative approach to the problem at hand due to its
ability to offer everyday low prices on a broad assortment - anytime, anywhere. The everyday
low price is the cornerstone of Walmart’s strategy, and Walmart’s price focus has never been
stronger. In a research study conducted by Consumer’s Checkbook, both Walmart and Grocery
Outlet were found to have prices that were 17% lower than the average of all the stores surveyed
(Consumer’s Checkbook). Today’s customer seeks the convenience of one-stop shopping, and
Walmart offers this. From grocery and entertainment to sporting goods and crafts, Walmart
provides a deep assortment that customers appreciate.
Northside Neighborhood residents currently cope in the absence of a Northside
Neighborhood grocery store by strategically going to Walmart, ALDI, Giant and Project
SHARE. Walmart plays a major role due to the convenience of its location. The Walmart
supercenter is somewhat accessible and already a part of many residents’ weekly routines. The
26
Grocery Outlet store would be competing against the established routines and habits of the
residents, the reputation Walmart has in Carlisle, and Walmart’s affordable pricing.
However, the Grocery Outlet store offers an approach that has the potential to outperform
the most competitive alternative. The Grocery Outlet store buys products that are outside the
traditional retail channel because of packaging changes, product overruns and surplus
inventories. Opportunistic buying is the core of this business model and Grocery Outlet buyers
find top-quality, name-brand products they can sell at pennies on the dollar. Grocery Outlet is
one of the largest retail remarketers of excess inventory, including categories from grocery to
wine to beauty products. Grocery Outlet is also one of the largest retail marketers of excess
brand name and perishable products. Grocery Outlet specializes in turning inventory challenges
into outstanding values for millions of customers.
America is deep in the age of thrift. Bargain-hunting has become much more common,
and discount retailing has become a valuable option for customers - no matter what their income.
Twenty years ago, the typical bargain shopper was trying to stretch a small income and find an
affordable way to feed a family. This gave rise to Walmart, ALDI, Save-A-Lot, etc. Today,
Grocery Outlet serves the traditional cost-conscious customer and the shopper making well into
six figures who stops in Grocery Outlet on their way to Whole Foods. In this way, Grocery
Outlet serves as an equalizer where people of all incomes can come to shop. Opportunistic
buying is common today, and there is a demand for it in every market, especially in Carlisle.
It can be assumed that some customers will seek the Grocery Outlet’s bargains to stretch
their budgets and others will go to Grocery Outlet because they enjoy chasing great deals. The
appeal that Grocery Outlet has over Walmart is the experience of a treasure hunt. Many of the
products on the shelves can be found at conventional grocery stores, but the Grocery Outlet is
able to sell at a much lower price. This allows customers to save money on familiar brand names
as well as new items. This is paired with the fact that Grocery Outlet offers a 100% guarantee on
all of its products.
A differentiator between Grocery Outlet and Walmart lies in the presence of independent
operators. Independent operators at Grocery Outlet have a say in what’s in stock. They choose
items that coincide with their local community’s preferences and demands. Independent
operators interact with their customers and are active in their local communities. Additionally,
they might mark down prices if the product isn’t moving fast enough. They put their biggest
bargain items along the “Power Wall” for customers to see first and elsewhere prices are listed
on big yellow shelf signs to show customers what they’d pay for those items at a convenience
store.
Ultimately, we suggest Grocery Outlet is a plausible and attractive option for the situation
at hand. It provides affordable prices, a treasure hunt experience, strong ties to the community,
price comparisons, an easily accessible/walkable location and savings for people at all income
levels. We have a strong belief that a Grocery Outlet will fill a niche in the community that isn’t
currently present.
27
Sociopolitics
As with any project, the sociopolitics are unique. According to the Social Entrepreneur’s
Playbook, identifying the sociopolitics is a crucial step, since it assists in the challenging
endeavor of avoiding fruitlessly wasting resources and time (MacMillan and Thompson, 60).
Therefore we have determined that we wanted to think through all of the people and
organizations that will be impacted by the success of this Grocery Outlet venture. We wanted to
think about parties that will benefit, parties that will experience negative impacts or be
inconvenienced, and parties whose support will be needed. We’ve separated them into allies,
opponents and “needed indifferents” for whoever decides to take on this venture.
Chart 6: Identifying the Sociopolitics
We feel that the odds seem are in favor of developing a new grocery store in Carlisle’s
Northside neighborhood as the number of allies outweighs the potential opponents. However,
28
since we have not carried through with this project and we can only try to predict each party’s
reaction based on the information we have now. The scope of our research did not include a deep
analysis of the sociopolitics for this grocery store project, but we do think that the anticipated
impacts look reasonable and we are optimistic about the allies’ openness to mobilization and
their willingness to help cope with the opposition. We hope that the number of potential
opponents remains low and that whoever takes on this task will try to limit the number of entities
adversely affected and the extent to which they are affected as much as possible. Finally, we also
hope that the needed indifferents will be able to provide resources and support that is conducive
to the goals and success of the venture.
29
Bibliography
"BB's Grocery Outlet: Bents, Bumps and Bunches of Bargains." BB.s Grocery,
www.bbsgrocery.com/.
Bedi, Heather, et al. (2018). Cumberland County Food Assessment. Student Capstone Project for
ENST 311: Food, Poverty, and Place; Spring 2018, Dickinson College, Carlisle, PA.
Block, Deborah. (2018). "Salvation Army's First Grocery Store Helps Baltimore's
Disadvantaged." VOA, 19 June 2018, voanews.com/a/salvation-army-s-first-grocery-store-
helps-baltimore-disadvantaged/4444117.html.
Bonessi, Dominique Maria. (2018). "Salvation Army Opens Its First-Ever Supermarket, in
Baltimore." NPR, 27 Mar. 2018,
www.npr.org/sections/thesalt/2018/03/27/597304848/salvation-army-opens-first-grocery-
store-ever-in-baltimore.
Browne, Michael. (2018). "The Salvation Army Opens First Grocery in Baltimore." Supermarket
News, 8 Mar. 2018, www.supermarketnews.com/news/salvation-army-opens-first-grocery-
baltimore.
"The Carlisle Urban Redevelopment Plan." Carlisle Pennsylvania, September 2013,
www.carlislepa.org/wp-content/uploads/2015/04/Carlisle-URP-Executive-Summary.pdf.
"The Cliff Effect: One Step Forward, Two Steps Back." Indiana Institute for Working Families,
www.incap.org/cliffeffect.html#.XAjFFpNKiqC.
FCI. The FCI Guide to Starting a Food Co-Op . Food Co-Op Initiative, 19 Jan. 2017.
"Grocery Outlet Home." Grocery Outlet, 2018, groceryoutlet.com/.
Grocery Outlet Bargain Market. Independent Operator Information Report.
30
Helmstadter, Roberta. (2018). "An Insider View of DMG Foods." TrueSense Marketing,
www.truesense.com/ringer/an-insider-view-of-dmg-foods.
MacMillan, Ian C., and James D. Thompson.(2013). The Social Entrepreneur's Playbook.
Expanded ed. Philadelphia: Wharton Press.
Newmarket, Gregory, et al. (Undated). "Key Performance Indicators: 10 Metrics for Guiding and
Measuring Store Success." https://www.vendhq.com/images/university/retail-kpi-
guide/Key_Performance_Indicators.pdf.
NFCA. “What Is a Co-Op?” Neighboring Food Co-Op Association, nfca.coop/definition/.
"Our Company." Grocery Outlet Inc., groceryoutlet.com/our-company.
Partnership for Better Health. (2016). “Meeting Minutes: June 21, 2016.”
"Project Share Hunger Stats." Project SHARE, 2017, projectsharepa.org/hunger-stats/.
Reid, Stuart. “Why Some Co-Ops Fail.” Principles of Domestic Fair Trade | Co-Op Grocer
Network, 2016, www.grocer.coop/articles/why-some-co-ops-fail.
Severson, Kim. (2018). "The Freshest Ideas Are in Small Grocery Stores." The New York Times,
31 July 2018. The New York Times, New York Times,
www.nytimes.com/2018/07/31/dining/grocery-store.html.
Suassuna, Debbie. “Finding the Right Site for Your Co-Op.” Principles of Domestic Fair Trade |
Co-Op Grocer Network, Aug. 2011, www.grocer.coop/articles/finding-right-site-your-co-op.
"These Are the Cheapest, Most Expensive Supermarkets in Pennsylvania." CBS Philly, CBS
Broadcasting, 5 Dec. 2018, philadelphia.cbslocal.com/2018/12/05/these-are-the-cheapest-
most-expensive-supermarkets-in-pennsylvania/#.XAkS9xT63Qw.gmail.
"Who We Are." DMG Foods, www.dmgfoods.org/who-we-are/.
31
Appendix 1: Interview Data
Community Organizers and Planners
Bob Weed, CEO of Project SHARE
- Targeting audience outside of the neighborhood would be helpful as he has seen people drive 20 minutes to get to a
discounted store even though they do not live in the area and want to save couple dollars.
- Being able to hire trustworthy employees is going to be difficult.
Brenda Landis, Carlisle Borough Council member
- Majority of the residents are in support of having a grocery store, so the possibility of having consumers participate may
not be a problem as long as we add an incentive for residents to utilize the store.
- Having a council or a board that solely focuses on this project is very important as there has been lack of motivation and
prioritization among community members regarding different projects in the past as well.
Stephanie Williams, Greenway & Open Space Coordinator /Agriculture Preservation Administrator for Cumberland County
Pennsylvania Planning Department
- zoning to accommodate this type of development could be a potential logistical constraint
- the area would not be suitable for high end retail market. A grocery store like Pricerite would be better at servicing the
needs of the community than a Whole Foods for example.
- market feasibility is a concern because there must be enough buying power to support another store
- in general there is a growing demand of local produce which can be a challenge for grocery store to manage. Consumer
demand is driving this change
- there is the opportunity for walkability, better health, more opportunities and options
- invited PriceRite as a good potential option and had heard of their interest in the location
Tim Scott, Mayor of the Carlisle Borough Council
- it has been a long time coming and there is great excitement over the prospects of establishing a grocery store in this area
- public and private partnership to bring in federal and state dollars for this project can make this parcel an attractive package
- invited PriceRite as a good potential option and had heard of their interest in the location
- potential concern is the limitation of a small footprint which could inhibit expansion and cause challenges in parking
Rebecca Yearick, Downtown Program Services Manager with Cumberland County
- Hears different things from different ppl: some want locally grown, organic food but that’s expensive, other people want
low-cost produce and these things don’t jive
- When she asks what would you like to see downtown the answers are always the same: coffeeshop, theatre, fine dining
32
- Ppl want to come down and they want an experience
- Ppl say they want something but then they don’t support it
Gail Witwer, Director of Health Promotion at the Partnership for Better Health
- Leaders and organizers emphasized the segmentation present in Carlisle. The community is somewhat sectioned into
quadrants and there is little crossover between these quadrants.
- It is in this sense that whatever grocery store fills the space needs to be able to attract shoppers at all income levels. The
community leaders and organizers agreed that the grocery store should act as an equalizer in the sense that it should be
palpable to all economic levels.
- They expressed the need for a grocery store that is willing to help integrate the community.
- explained that a new approach to education might be necessary. They viewed price comparison as a valuable way to
convince
Ryan Brown, Senior Pastor for New Life Community Church
- It is believed that many people are walking to Walmart, due to all carts found in parking lots. However, it seems that most
people either drive or able to get a ride to the store.
- While Walmart is likely the most used store, it is believed that residents of the Northside use a mixture of grocery stores to
do their shopping, including Giant, Weis, and Aldi.
- There are many individuals in the Northside that are in need of a grocery store that is affordable and easy to maneuver
(mental health, impoverished, single parent families).
- In order to have a successful local grocery store, there would need to be competitive prices, and focus on the local
residents. This focus could include partnering with local organizations such as Project SHARE, Hope Station, New Life,
etc.
Matt Candland, Borough Council Manager for Carlisle Borough
- It is important to understand where residents of the Northside do their grocery shopping. It is assumed that most resident
do their shopping at the same places that other Carlisle residents use: Aldi, Giant, Weis, Walmart. It is also important to
know if these residents would use a local grocery store, and why or why not.
- Walmart has been the most successful store because of its low prices and wide variety. Despite selling at low prices,
Walmart makes profit by selling high volumes of product.
- It is believed that low income individuals are mobile enough, to get their groceries. Essentially these individuals either have
cars, have rides, or walk to get the groceries.
- It is important to understand how the Carlisle Redevelopment Plan has changed, and how that will affect a local grocery
store. When the plan was first drafted, it was decided that the redevelopment sites would need to have both a mixture of
usage and incomes, in order to support the retail called for. However, the Tire and Wheel site, where the community
grocery store would go, has now become mostly low-income housing. It is now a debate if the Northside would be able to
support a local grocery store, considering it no longer has a mix of incomes. A higher end grocery store that does not have
33
competitive prices would either not locate in this area or would not be economically accessible to most of the residents of
the Northside. However, a grocery store solely geared to low income individuals, might not provide the healthy products
that are needed in the Northside.
Focus Groups
Hope Station Focus Group, Local Resident of the Northside Neighborhood
- Ethnic food
- Closer in distance, would be willing to even pay few cents extra to save gas
- “Black-owned”
- First choice will always be walmart because it’s the cheapest.
Project SHARE Farmstand, Customers of the Project SHARE Farmstand
- Groceries need to be cheap and affordable
- Walkable distance
- Variety and some things like meat need to be of good quality
- First choice would be Farmstand itself because it’s FREE!
- Individuals using the Farmstand are diverse in ethnicity, race, and age.
- People often use Walmart for the low prices and large variety. However, they are using a mixture of stores in order to get
the best prices possible (Including Giant, Weis, Aldi, Karns).
- Since some of the people using the Farmstand are not from the Northside Neighborhood, there was a lot of indifference
about the idea of having a local community grocery store.
- Individuals who were from the Northside liked the idea of having a local grocery store, as long as the price points were
competitive with the lowest market prices. A local store would also need to have enough variety to allow people to get a
majority of their shopping completed (cut down the number of trips). Some individuals identified a need for ethnically
diverse foods and hoped that a local grocery store would be able to provide those items as well.
- Some individuals do have to make long walks to get their food, while others are able to drive
Carlisle West Side Neighbors, Local Resident Group
- None of the residents expect the grocery store to be a Wegmans or a Trader Joes. Instead, they envision a grocery store that
provides affordable essentials.
- They voiced that a small-scale, walkable store that provides the basics would be perfect. Therefore, a grocery store that
provides a vast variety isn’t needed.
- Most of the residents explained that they shop where they currently shop out of convenience. The stores they frequent tend
to be on their way home or near their kids’ schools.
34
- They stressed that time, convenience and proximity to the people are of utmost importance and that they don’t leave
Carlisle for much.
- Carlisle as a whole draws people because of the churches, parks, the military base, and friendly characterization of the
neighborhood and the residents.
- They agreed that the grocery store must draw everyone to be successful.
- To create a better community space, residents suggested a variety of international foods, free samples, free coffee, café
with free wi-fi, playground for kids, well-tended grounds, and well-designed parking lot.
- Good cross section location to other spaces
- They also suggested that whatever store comes in be a reputable store.
- Some people were skeptical of the quality at bargain grocery stores. They agree that quality cannot be sacrificed for low
prices.
- The nonprofit grocery store and the co-op grocery store models did not gain much traction and received neutral to negative
feedback.
Dickinson Community Residents, Faculty and Staff Members of the College living in the Northside Neighborhood
- Staple items and fresh produce are important for a grocery store
- Corner stores like quick stop help response to need for closer grocery store however this does not meet the need for fresh
produce
- The location, affordability, lower cost of living and great neighbors are aspects that draw them to the neighborhood
- Amplify access to fresh foods like Farmers on the Square by having a grocery store with health food within walking
distance
- BBs is not as accessible due to location but all interviewees agree they like to go there
- There is a desire for a larger international selection for foods
- Cost and proximity are large factors in choosing grocery stores
- Some people find driving to be an inconvenience and prefer not to drive if possible. Walking is preferred
- The car is more convenience for getting majority of grocery since most interviewees tend to buy in bulk for the week or
month
- Driving is there main method of transportation
- They see a growing community that would have great demand for a grocery store with many different customers
- Most comfortable with for-profit and bargain grocery store models
- Interviewee familiar with for-profit and would find an Aldis to be a good option because of size and price point
- With the bargain grocery store, the idea of a local company and cheap prices is nice however there must be fresh produce
and it may be a frustrating or an inconvenient experience if selections vary
35
- If there was a BBs like option people would go more frequently
- The coop grocery may not be as welcoming to all members and the initial investment costs may be a barrier to entry
Grocery Experts
Justin and Ellie Maenner (Bargain Store), Operators of the Grocery Outlet Bargain Market in Chambersburg
- as operators they both have a community focus and are highly involved in the community through their personal lives and
through hosting fundraising event at the store
- there is an intensive process to become grocery outlet store operators
- they try to be “everything for someone” so they can fill the need
- they like to have the staples for customers like to be able to provide that for the community
- technically they are allow to have product on the shelf 30 days past the date but they try hard not to do that and keep up the
high quality of their product and brand standards
- they are connected to local food pantries and donate food each week
- they use opportunistic buying to get good prices for consumer
- There products are on average 60% cheaper for customers
Tim Harrison (For profit- Price Rite), Real Estate Developer
- People will shop at the grocery store out of convenience
- There is a correlation between a higher education and a willingness to spend food on money - Carlisle is a low-income area
- Carlisle- Socioeconomically deprived area, income is less than the median, maybe not impoverished but not making a lot of
money, education isn’t high enough, not even on the radar screen of TJs and Whole Foods
- biggest problem is that we have a Walmart supercenter that isn’t too far away, not too easy to pry food volume away from
Walmart
- The real scary thing is Walmart, right combination of tax increment financing and grants then we might be able to make it
work.
AJ Hess (Co-op), Mariposa Co-op
- In order to start a co-op, you must be able to identify a need in a community. From there you must find a way for your
organization to fix that need. In order to do this, there must be a founding team of individuals who are both talented and
experienced in co-op management. It will take nearly 10 years from these initial steps, for the store to be fully operational.
- Mariposa is in a building with a relatively small footprint, but they are able to make a considerable amount of sales. Yet
since the co-op is located in a dense area, they are struggling to find room to expand their business.
- Mariposa has become one of the largest employers in their immediate area. Furthermore, they provide some of the highest
wages and benefits as well.
36
Appendix 2. Complementary Student Research in SOCI 313: Building Sustainable
Communities (Prepared by Prof. Helen Takacs)
This fall, Prof. Neil Leary taught a course on Building Sustainable Communities in which one
team of students investigated how Carlisle residents viewed access to local grocery stores via
walking or biking2. The students who conducted this research were Emily Armando, Claudia
Bonaccorsi, Ilana Gruber, Bruno Kaboyi, and Julia Ritger. These students surveyed 148
residents from across Carlisle. Findings from this SOCI 313 research project that are relevant to
our SINE 400 research project are:
In response to the question, “What is your biggest concern regarding food?”, 67% of
survey respondents said cost of the food and 62% said nutritional value.
In response to the question, “What is the biggest obstacle you face when trying to access
the grocery store?”, the greatest responses were time (28%) and traffic/parking (27%).
In an open-ended question, several respondents said that the primary reason they had for
walking or biking to a grocery store is the distance to the store.
The students’ draft report also noted that survey respondents “who reported receiving
government assistance were also more likely to face challenges when it came to
accessing affordable, healthy food” (page 12).
As noted above, this survey was open to all Carlisle residents. Demographic information for
those that responded are provided below.
o Race: 90.5% White/Caucasian, 3.4% Black/African American, 3.4% Hispanic/Latino,
1.4% Native American or American Indian, 0.7% Asian or Pacific Islander, and 2.7%
Other.
o Use of Assistance Programs: 12.8% use local food banks, 12.2% use SNAP, 4.1% use
reduced-cost school lunch programs, 12.2% opted out of this question, and 68.2% use
none of these assistance programs.
o Most survey respondents (91%) own or have access to a car.
For more information about this SOCI 313 research project, please contact Prof. Neil Leary at
2 Emily Armando, Claudia Bonaccorsi, Ilana Gruber, Bruno Kaboyi, and Julia Ritger. (2018). “Carlisle Walkability Assessment: Draft Final Report.” Dickinson College, SOCI 313-03, Fall 2018.
