OLIVER: Subsidizing rent won’t bring grocery store to campus

In my four years here, I have hardly ever had good, healthy food in my house, because we just don’t have nearby grocery options available to us.

As the Tribune editorial Tuesday pointed out, we are in the middle of a food desert that covers a significant portion of Milwaukee.

The closest grocery stores are, at best, a ten minute drive off-campus. If you’re like me and concerned about prices, you have to drive out to suburbs, such as Wauwatosa, to save money. For students, it makes perfect sense to open a grocery store on campus, but for businesses – not so much.
This is why it isn’t going to happen:

First, a grocery store is a huge economic risk.

Opening a grocery store on campus would probably have sustainable profits for nine months of the year – when students reside on campus. Yet grocery stores must cover large overhead costs throughout all 12 months. If a significant portion of its clientele leave for three months out of a year, it is at a financial disadvantage. The big question is could a grocery store make up the cost over the nine months it has a fully stocked clientele?

I don’t think so.

A store wouldn’t be able to survive without an increased population, because it would supply more than the population needs. This, in turn, would increase financial losses due to waste. The extra waste, along with the operating costs of the store, would turn any possible profits immediately into losses. 

Secondly, a grocery store would be at risk for theft and vandalization.

The risks it would take by opening so close to an economically impoverished area are incredibly detrimental. To reference my earlier point, when the students are away from campus, the store would have to seek all its revenue from these residents.

Look at the areas where Milwaukee has stores, and you’ll find they are all strategically placed. It’s a basic concept of real estate: location, location, location. For example, the Pick ‘n Save at 605 E. Lyon St. is one of the stores I frequent most. It is close to the Milwaukee School of Engineering, but it also has a higher neighborhood income to sustain it when MSOE students are away.

Tuesday’s editorial called for the university to subsidize the rent of a perspective grocer. That’s a great idea, but reduced rent isn’t going to lure a prospective renter to an area that may only be profitable for nine months of the year, because the subsidies won’t offset the operating costs associated with a store.

Grocery stores have staff wages, electricity, water, various licenses and taxes. Even if the university waives rent, the costs associated with the store would still be astronomical during the three months when students aren’t on campus. 

Unfortunately, this means our little slice of Milwaukee will probably stay a food desert. Therefore, the university should start providing a means for students to better access the off-campus grocery options already available to the community.

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