Taking Stock of Manhattan Supermarkets

By Michael Garofalo

The importance of access to healthy food options in affordable supermarkets needs little additional explanation. How to ensure that all Manhattan residents can easily access such stores, however, is a more complicated matter. A study released last week by Manhattan Borough President Gale Brewer catalogs the borough’s existing grocery stores and prescribe solutions for maintaining and expanding the supermarket options available to Manhattan residents.

“We need to make sure we do not have food deserts,” Brewer said in a telephone interview. “In Manhattan we don’t drive — we take public transportation — and we need to have the ability to get to a supermarket in our neighborhood. As the population gets older it’s even more important.”

The study, titled “Manhattan Supermarkets: How to Keep them Alive,” features a comprehensive survey of 229 Manhattan supermarkets, organized by community board, and reports the senior-friendly features available at each store, including wheelchair accessibility, delivery availability and costs, senior discounts, and whether SNAP or EBT benefits are accepted.

Brick-and-mortar supermarkets in Manhattan face challenges on a variety of fronts, according to Charles Platkin, executive director of the New York City Food Policy Center at Hunter College. “There are all these forces which have changed that landscape for supermarkets,” he said. (Platkin was not involved in Brewer’s study.)

High commercial rents have impacted Manhattan retailers across the board in recent years, Platkin said, but the supermarket industry has been hit particularly hard due to its razor-thin profit margins, which have grown even tighter in recent years with the emergence of stiff competition from online grocery delivery services like FreshDirect. To meet the demands of the market, many stores have started offering home delivery services of their own (including 185 of the 229 Manhattan supermarkets surveyed in Brewer’s study), driving up transportation costs and further reducing margins.

“It’s the hardest business imaginable,” Brewer said.

Many Manhattan supermarkets bear the added cost burden of the commercial rent tax, which imposes an effective tax of 3.9 percent of base rent on the borough’s business tenants south of 96th Street (certain businesses below Chambers Street, as well as tenants with annualized rents below $250,000, are exempt from the tax). “If you’re trying to encourage supermarkets to offer healthy food, especially fruits and vegetables, the additional cost of the commercial rent tax can be a burden,” Platkin said.

Brewer has championed a city council proposal that would eliminate the commercial rent tax for supermarkets. The benefits of making it easier for supermarkets to do business, she said, would far outweigh the negative impact on the city’s coffers. “It would only be a little over $5 million from the City of New York in terms of lost tax revenue — not a lot of money,” she said.

“We want brick-and-mortar supermarkets to be able to survive, and the CRT bill is one example of what needs to be done,” Brewer added.

There are nearly 2,000 establishments in Manhattan that sell food, but the study included strictly supermarkets that offer a full range of fresh options like produce, meats, and prepared foods.

While residents of many underserved communities rely on bodegas and delis for their food needs, such stores often lack unprocessed options that promote good health outcomes. “It’s nothing against bodegas, but you’re not getting the healthiest selection of foods that you could potentially get if you shopped at a supermarket,” Platkin said.

Brewer’s report calls for an update and expansion of the Food Retail Expansion to Support Health (FRESH) program, which offers zoning and financial incentives to encourage the establishment of affordable grocery stores offering healthy foods in underserved areas.

FRESH eligibility zones were based on a 2008 study commissioned by the city that identified areas without sufficient grocery options; as a result, benefits in Manhattan are available to supermarkets mostly in neighborhoods above 96th Street. But according to Brewer’s report, due to supermarket closures since the city’s study was conducted 2008, there are a number of underserved communities further south that could benefit from FRESH but are currently ineligible for the program.

The survey identified several East Side communities that suffer from a lack of affordable food options, including Kips Bay, Murray Hill, and Turtle Bay.

“Unlike much of Harlem and Washington Heights, these East River neighborhoods are not mapped or zoned to benefit from the FRESH program, and there are no incentives in these neighborhoods to include a purpose-built supermarket unit into new construction,” the study reports. “Furthermore, the remaining supermarkets in this area are all at risk, competing for business and for their own spaces with national chain pharmacies, which often outbid supermarkets for their commercial leases all across the city.”

When a supermarket closes, the impact extends well beyond the reduced access to healthy food in the surrounding neighborhood, according to Platkin. Supermarkets are community anchors, he explained — a local grocery shuttering its doors influences real estate prices in the area and can have a very real psychological impact on the community. When a neighborhood market shuts down, Platkin said, “You feel like something’s being taken away from you. You feel like your area’s not worthy.”

In addition to a call to expand FRESH eligibility to underserved areas not currently covered by the program, Brewer’s report recommends the establishment of commercial loading zones in front of all supermarkets to reduce expenses through improved shipping efficiency and calls for a review of unnecessary rules and regulations that could be rolled back to further reduce supermarkets’ costs.