Supermarkets show how retailers who get diversity do better

The conventional wisdom among supermarket operators is that there's no money to be made by serving inner-city neighborhoods. As a result, stores have closed in lower-income communities in cities across the country. Some very poor cities, such as Camden, N.J., and East St. Louis, Ill., have no supermarkets within their borders at all.

The shame is, the conventional wisdom is completely false. Savvy supermarket operators who understand how to work with and cater to the tastes of diverse communities have proven that there is indeed money to be made serving ethnic communities and less-than-affluent neighborhoods.

A pair of supermarket owners in the Philadelphia suburbs discovered that by accident when they were approached by the University of Pennsylvania to operate a supermarket near its campus in the mid-1990s

The university had been rebuffed by a major national chain that it had approached with a proposal for a supermarket featuring fresh and freshly prepared foods – the kind found in most suburbs these days. It then approached Michael Rinnier and Pat Burns, who operated just such a supermarket in Upper Darby, a suburb that has been experiencing an influx of immigrants. After some arm-twisting, Rinnier and Burns agreed. Then they met with the neighbors and asked them what they wanted to see in a grocery store.

The new store, called The Freshgrocer, opened in 1996 and was an instant hit with the ethnically and economically mixed neighborhood surrounding the store. In fact, it was so successful that the company soon thereafter built a brand-new supermarket about a mile to the west, at 56^th and Chestnut streets in an area of West Philadelphia that had lacked a supermarket ever since a nearby Super Fresh closed in the early 1990s because of low profitability.

Rinnier passed away in 2006, but Burns has continued to apply the lessons they learned in opening large new supermarkets in low- to moderate-income communities in and around Philadelphia. You may have seen one of them in the news: First Lady Michelle Obama paid a visit to the chain's newest store, in North Philadelphia's Progress Plaza, in 2010.

The lesson Rinnier and Burns learned is one that any business owner can apply: Smart business owners who listen to and learn how to meet the needs of diverse communities can do well in any environment.

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By Sandy Smith

Sandy Smith is an award-winning writer and editor who has spent most of his career in public relations and corporate communications. His work has appeared in The Philadelphia Inquirer, the Philadelphia CityPaper, PGN, and a number of Web sites. Philly-area residents may also recognize him as "MarketStEl" of discussion-board fame. He has been a part of the great reserve army of freelance writers since January 2009 and is actively seeking opportunities wherever they may lie.