According to representatives from two regional Texas supermarket companies, there is a standard set of criteria for expanding into a new neighborhood. These basic criteria have a fundamental importance for medium size, low-density neighborhoods like East Austin. Unlike the dense inner-city neighborhoods of Chicago, Detroit or New York, East Austin' s 24,000 residents live spread out over six square miles. Many East Austinites live in houses with yards separated my empty lots, garages, parks, warehouses or factories. Beyond these basic income and population density criteria, supermarket executives assess the profitability of the inventory the store will carry and weigh it against the cost of doing business in a particular area.
Costs can be high in inner cities.
Because low-income families are poor, they buy basic foods. This is a negative for the supermarket industry because profit comes from meat, seafood, prepared foods and non-food items such as flowers. In addition, some executives claim that shoplifting and theft of shopping carts are real obstacles to locating in certain areas. So, although real estate can be cheap, other costs of doing business can be high in low-income neighborhoods. Together, these factors combine to make the construction of additional supermarkets unlikely for low-income neighborhoods like East Austin.