What Philly can learn from Houston's decision to allow alcohol sales in city supermarkets

Recently, Houston’s city council elected to end a long-standing municipal regulation that barred the sale of alcohol within 300 feet of churches, public schools and hospitals. The prohibition had made it nearly impossible to sell alcohol in certain neighborhoods and the repeal’s supporters argued that supermarket operators were intentionally avoiding lower-income neighborhoods, often home to many churches, in order to cash in on lucrative beer and wine sales permitted elsewhere.

What this means for Philadelphia is largely conjectural: No supermarkets in the city are licensed to sell beer or wine because of the commonwealth’s antiquated liquor laws. But do those laws, as they did in Houston, help perpetuate food deserts by making it harder to profitably operate a grocery in poor neighborhoods?

Although comparing two different cities is notoriously difficult, Philadelphia supermarket density seems to indicate that prohibition has had a negative impact. 

A 2011 study by Trade Dimensions, a company that monitors the retail industry, showed that Philadelphia had 137 “supermarkets” — a loose definition that includes any grocery with more than $2 million in annual sales — or about one store for every 11,300 residents. By this measure, Philadelphia significantly lagged behind nearly all other peer cities that allowed sales in supermarkets. Wealthier big cities like New York had one grocery for every 8,200 residents, Washington, D.C. had one for every 8,400.

But smaller cities with median incomes closer to Philadelphia’s also recorded better ratios of supermarkets to residents: one for every 9,400 residents in St. Louis, one to 8,900 in Newark,  even one to 8,800 in Detroit. In Baltimore, where the county prohibits the sale of alcohol in supermarkets, the ratio is closer to Philadelphia’s — one grocery for every 10,000 residents.

While there are certainly many different variables at play,  the corelation resonated with Dave McCorkle, president of the Pennsylvania Food Merchants Association. His group has long lobbied Harrisburg to open up beer and wine sales to the grocers he represents, shoring up razor-thin profit margins.

“Our businesses in Pennsylvania are particularly stressed at this point,” said McCorkle. “Our after-tax profits are about one penny for every dollar of sales.”

But with cuts to the state’s General Assistance program and food stamps on the chopping block, McCorkle sees alcohol sales in supermarkets less as a tool for expanding into low-income areas and more as a life preserver for existing stores. 

“Operating costs are higher in the city for a variety of reasons, so [supermarkets] are particularly stressed in Philadelphia,” he said. “Adult beverage sales in those Philadelphia stores would greatly improve the viability of those businesses.”