Chains, US first lady team on 'food desert' stores

Wed Jul 20, 2011 1:36pm EDT

* Walmart to open 275-300 stores in USDA "food deserts"

* Supervalu to open 250 Save-A-Lot stores such areas

* Walgreen adding food to more of its drugstores

By Jessica Wohl

CHICAGO, July 20 (Reuters) - Some of the largest U.S. grocers said on Wednesday that they would join forces with First Lady Michelle Obama to bring healthy food to parts of the country, urban and rural, where access to fresh groceries is poor.

Walmart, the largest food retailer in the United States, will take part in an announcement with the first lady at the White House on Wednesday afternoon. Supervalu Inc (SVU.N) and Walgreen Co (WAG.N) are also participating.

All three chains announced plans to open stores in so-called "food desert" parts of the country, where people lack access to grocery stores and their fresh produce and meats. According to data provided by Supervalu, there are more than 23 million people, including more than 6 million children, live in U.S. food deserts.

Walmart, the largest unit of Wal-Mart Stores Inc (WMT.N), has repeatedly said that it wants to bring lower-priced fruit, vegetables and other healthy foods to food deserts. At a January event in Washington featuring Michelle Obama, Walmart said it would promote and cut prices on healthy food. [ID:nN20290731]

Such efforts could help Wal-Mart, the world's largest retailer, to win favor with city councils and other leaders who object to its efforts to open stores in New York City and other parts of the country.

NEW PUBLIC COMMITMENTS AFFIRM PREVIOUS PLANS

While Wednesday's announcement underscores Michelle Obama's healthy food initiatives, many retailers have already been opening stores and expanding food offerings in underserved areas.

Walmart said on Wednesday that it plans to open 275 to 300 stores serving designated "food desert" areas by 2016. It has already opened 218 stores in such areas since 2007.

"The first lady's efforts in these areas have helped focus our real estate process, to take a particular look at these areas as we build out our real estate plans," said Leslie Dach, executive vice president of corporate affairs at Walmart.

Supervalu already operates about 400 stores in areas some may consider food deserts, including five recently opened units on the Chicago's South Side, Chief Executive Craig Herkert told Reuters.

"What's new for us is committing very publicly with the Partnership for a Healthier America and the first lady to 250" new stores in food deserts, he said.

Walgreen Co (WAG.N), the nation's largest drugstore chain, committed to convert or open at least 1,000 "food oasis" stores over the next five years stocked with fruits, vegetables and other healthy fare.

More than 45 percent of Walgreen's existing stores are in areas that do not have easy access to fresh food, CEO Greg Wasson said in a statement.

Back in January, Walgreen said that it would add more fresh food to about 300 to 500 stores in areas where access to produce and other food is scarce. [ID:nN12243626]

Supervalu said it would open 250 Save-A-Lot stores in or around such areas over the next five years, a move that should create more than 6,000 jobs.

Walmart said that its new "food desert" stores would lead to more than 40,000 jobs, including part-time and full-time positions.

None of the new Walmart supercenters or Walmart Market stores are planned for New York City, where Walmart has experienced a strong pushback from local officials worried that the behemoth will threaten the viability of small retailers. (Additional reporting by Lisa Baertlein in Los Angeles and Phil Wahba in New York; Editing by Steve Orlofsky)

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