Food deserts are not an inevitable consequence of poverty or low population density, and they didn’t materialize around the country for no reason. Something happened. That something was a specific federal policy change in the 1980s. It was supposed to reward the biggest retail chains for their efficiency. Instead, it devastated poor and rural communities by pushing out grocery stores and inflating the cost of food. Food deserts will not go away until that mistake is reversed.
The structure of the grocery industry has been a matter of national concern since the rise of large retail chains in the early 20th century. The largest was A&P, which, by the 1930s, was rapidly supplanting local grocery stores and edging toward market dominance. Congressional hearings and a federal investigation found that A&P possessed an advantage that had nothing to do with greater efficiency, better service, or other legitimate ways of competing. Instead, A&P used its sheer size to pressure suppliers into giving it preferential treatment over smaller retailers. Fearful of losing their biggest customer, food manufacturers had no choice but to sell to A&P at substantially lower prices than they charged independent grocers—allowing A&P to further entrench its dominance.
Congress responded in 1936 by passing the Robinson-Patman Act. The law essentially bans price discrimination, making it illegal for suppliers to offer preferential deals and for retailers to demand them. It does, however, allow businesses to pass along legitimate savings. If it truly costs less to sell a product by the truckload rather than by the case, for example, then suppliers can adjust their prices accordingly—just so long as every retailer who buys by the truckload gets the same discount.
For the next four decades, Robinson-Patman was a staple of the Federal Trade Commission’s enforcement agenda. From 1952 to 1964, for example, the agency issued 81 formal complaints to block grocery suppliers from giving large supermarket chains better prices on milk, oatmeal, pasta, cookies, and other items than they offered to smaller grocers. Most of these complaints were resolved when suppliers agreed to eliminate the price discrimination. Occasionally a case went to court.
During the decades when Robinson-Patman was enforced—part of the broader mid-century regime of vigorous antitrust—the grocery sector was highly competitive, with a wide range of stores vying for shoppers and a roughly equal balance of chains and independents. In 1954, the eight largest supermarket chains captured 25 percent of grocery sales. That statistic was virtually identical in 1982, although the specific companies on top had changed. As they had for decades, Americans in the early 1980s did more than half their grocery shopping at independent stores, including both single-location businesses and small, locally owned chains. Local grocers thrived alongside large, publicly traded companies such as Kroger and Safeway.