Wednesday, July 13, 2011

Walmart Express and Food Deserts

From the Knowledge Problem blog:

"If Walmart can leverage their supply chain logistics to bring their low-price model to these markets, this could expand the market while increasing competition, all of which benefits consumers. And, in a city like Chicago with low-income neighborhoods that qualify as "food deserts", a store like Walmart Express could provide retail access to fresh food in such areas."

I think some people would like to blame 'food deserts' on profit oriented retailors and 'industrial agriculture'. But here we have an example where a big box retailer is being presented as a possible solution to the 'food desert' dilemma. It make sense that given the extensive hurdles to bringing healthy food to some markets (forgetting for a moment those barriers associated with production agriculture) such as minimum wages, risk,liability, the war on drugs, taxes, and the regulatory environment, that a company like Wal-Mart could leverage their supply chain  and possibly make a profit where no one else can. 

Of course, Wal-Mart is no clear capitalist hero. Many of these progressive policies that have contributed to 'food deserts' likely found their way on corporate lobbyists' to do list. The essence of rent seeking is to expend resources to carve out a secure niche in the tax and regulatory environment. 

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