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In rural areas, the same dynamic means that Walmart can capture spending across a wide region by locating its supercenters in larger towns, counting on people in smaller places that no longer have grocery stores to drive long distances to shop for food. An independent grocer that tries to establish itself in a more convenient location will struggle to compete with Walmart on price because suppliers, who can’t risk losing Walmart’s business, will always give the mega-chain a better price. Indeed, during the height of the pandemic, when supply-chain disruptions left grocery manufacturers struggling to meet demand, Walmart announced stiff penalties for suppliers who failed to fulfill 98 percent of its orders. Suppliers complied by shorting independent grocers, who scrambled to keep staple products in stock even as Walmart’s shelves were full.
The problem of food deserts will not be solved without the rediscovery of the Robinson-Patman Act. Requiring a level pricing playing field would restore local retailers’ ability to compete. This would provide immediate relief to entrepreneurs who have recently opened grocery stores in food deserts, only to find that their inability to buy on the same terms as Walmart and Dollar General makes survival difficult. With local grocery stores back on the scene in these neighborhoods, chain supermarkets may well return, too, lured by a force far more powerful than tax breaks: competition.
