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The business model of Philly’s first non-profit supermarket

Philadelphia Business Journal

By: Samantha Freda

Since 2001, Chester residents have gone without access to a local grocery store. After a decade of being considered a “food desert” by the USDA, Chester has been given an oasis.

Fare & Square is a new, 16,000 square foot non-profit supermarket that charges roughly 10 percent less than small urban grocers.

“We are not dropping prices on soft drinks and snacks as much as on apples and bananas,” said Philabundance president Bill Clark. “But some things are even being sold below cost.”

So what exactly is a nonprofit grocery store? According to Clark, there will be no profits made by Fare & Square as an enterprise.

“Any profits get recycled back in the business either as lower prices to the community or additional services” like budget training, diabetes screening, nutrition programs, and outreach for educating people about the Affordable Care Act, he said.

An idea that started seven years ago, required $7 million in capital and nine months of construction. It materialized as Fare & Square, a nonprofit grocery store that opened on Saturday, September 28 on 9th and Trainer Streets. The project was completed by Philabundance, a non-profit agency which services a nine-county area that contains 35 “food desserts.” Chester had been assisted with programs like food pantries, but Fare & Square is the first full-scale grocery store with healthy options that the area has had in more than a decade.

Of the 34,000 Chester residents, more than half earn less than 200 percent of the poverty level, according to American Community Survey’s 2008-2010 estimates. The building was last used as a grocery store with the West End Food Center in 2001, remaining vacant until Philabundance renovated the space to build Fare & Square. The store has provided 69 new jobs, with Chester residents making up 82 percent of the staff. This summer, Philabundance offered a free five-week Service Industry Training Course for residents in Chester, and 36 graduates from the program were hired at Fare & Square.

The location will focus on providing nutritious food staples and helping customers effectively utilize their grocery money. SNAP Food Stamps will be accepted in the store.

On opening day, Fare & Square had 4,700 households sign up for its free Carrot Club, which helps customers to earn rewards and credit toward future purchases.

Once a more profitable area due to its ship-building industry, Chester’s population was cut practically in half in the years following World War II. Now poverty rate is high and the unemployment rate is at 13.3 percent (much higher than the national average of 7.3 percent.)

Although Chester has corner stores where a small variety of food products can be purchased, residents will now have access to departments that include fresh produce, deli, seafood, and dairy.

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