Twin Cities Food Shelf/Grocery Draws Concerns from Local Merchants

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April 10, 2012; Source: Pioneer Press

The Twin Cities-based nonprofit Fare for All Express sells food at prices that are discounted up to 40 percent to everyone, and that poses a market problem in the opinion of local store managers who believe that it is cutting into their sales. “It’s just completely wrong,” said Tony Oelmann, manager of Mike’s Discount Foods in Anoka, Minn. He said businesses pay taxes, create jobs and bolster communities—and shouldn’t be competing against nonprofits that get donated food and tax-free donations.

The Emergency Food Shelf Network operates Fare for All, which was started in 1986 with the stated purpose of selling discounted food to the poor. But buyers are not screened in any way and the program apparently attracts a lot of bargain hunters. In the past, people pre-ordered food which was then delivered to certain locations, but now a second program, Fare for All Express, acts as a traveling grocery store with trucks appearing monthly at pre-determined locations.

The program is now poised to expand to Cottage Grove, Minn., which would make the city number 23 on the program’s list of delivery communities in the Twin Cities area. Jen Peterson, a Cottage Grove councilwoman who lobbied to get Fare for All into her city, said, “They don’t even ask your name…It’s the same as a grocery store. It is designed for people in economic distress, but it’s also helpful for people who are bargain hunters.”

In fact, due to the way the program is structured, the more food the program sells, the greater the volume discounts and the more sustainable the program becomes. Although it now sells 44 tons of food a month between its two programs, a spokesman for the Emergency Food Shelf Network said the program does not compete with food stores. Some owners of those stores don’t buy it. “The 100 percent tax-exempt status creates something of an issue for me. As a business, I do pay taxes,” said Billie Hagberg, who manages the meat department for a local merchant.

Ben Senauer, a professor of applied economics with the University of Minnesota’s Food Industry Center, agrees that the program is competing, saying, “The nonprofit status provides them with a clear competitive advantage…They don’t have bricks-and-mortar stores, and they don’t pay taxes.”

But Jean Kinsey, director emeritus of the University of Minnesota’s Department of Applied Economics, said even if the program does compete in the market, the overall affect is minimal. “Anything you can do to reduce hunger is probably a good thing,” said Kinsey. –Ruth McCambridge

  • Julie

    Twin City resident, didn’t know about this NP. Very interesting. Thanks NPQ!