Groceries Grow Elusive For Many in New York City

Duane Perry, the founder of the nonprofit Food Trust, which has created a $120 million fund to bring 32 new supermarkets to Philadelphia, has taken part in early discussions surrounding the commission.

"We're finding that there are gaps, places where the industry has not been able to provide safe, affordable and nutritious food," Perry said.

Others said the commission should devise creative ways to deliver groceries to a changing city.

"As we do new housing developments, we should think about how to structure space on the ground floor" and "make plans to incorporate street-level retail," said Linda Gibbs, the deputy mayor for health and human services.

Alicia Glen, the managing director of the Goldman Sachs Urban Investment Group, brings investment capital to underserved neighborhoods to stimulate economic development, including grocery stores. She said it is difficult to convince national supermarket chains "that even though people's incomes may be low, they still shop."

"I think you could characterize it as redlining," she said. "There's a real sense that there's certain places they won't go."

She said investors have been slow to realize that grocery stores can anchor neighborhood development. "How are you going to have million-dollar condos if there's no place to buy bok choy?" she asked.

A study by the Reinvestment Fund, a development finance corporation in Pennsylvania, found that every $1 spent on supermarket construction and operation generates $1.50 in additional economic activity.

The rationale for the vanishing grocery stores is clear: Grocers traditionally make profit margins of only 1 to 2 percent, while skyrocketing rent prices in recent years have outstripped the stores' income, industry experts said.

It did not help that a recent spate of bank expansions hiked up commercial rents for everyone, said C. Bradley Mendelsohn, an executive director at Cushman & Wakefield.

High-end grocers are doing well, such as Whole Foods Market. It recently opened the largest grocery store in the city, at 71,000 square feet, including a sushi bar, an ice cream bar and a fromagerie. FreshDirect, an online grocer that delivers to certain neighborhoods, has so transformed food shopping that many new residential buildings include a refrigerated room off the lobby for food deliveries.

Meanwhile, D'Agostino, Gristedes and Key Food have each closed about a dozen stores since 2000, industry experts said.

"Unless you come up with some solution for essential services, you're going to have neighborhoods change dramatically," said John Catsimatidis, chief executive of the Gristedes chain, which has recently closed outlets because of rent hikes.

"Traditionally people went to their neighborhood stores to buy their needs," he said. "They won't be able to do that. It's not just grocery stores."