Tuesday, August 18, 2009

Business & Advertising: Detroit's Damaged Economy Closes All Major Supermarkets

In the average American city newspaper print or electronic advertising, ads for major grocery retailers flourish, except for one large American city so damaged by the recession, Detroit. According to a recent report by CNN and other business news sources, the city is now without a major grocery retailer such as Safeway or Kroger. CNN even reports that hunger and poverty has become such a problem that guards dressed in combat fatigues have to protect grocery shipments to smaller neighborhood markets which become the only source of groceries for many residents.

In most American cities with lower unemployment rates, thick Sunday morning newspapers with rich grocery coupon sections are always present. In Detroit, such ads just don't exist. And Safeway and other retailers are missing in action from the airwaves. Grocery shoppers largely have to depend on small neighborhood markets for basic food supplies. Often these small retailers cannot compete with the buying power of the larger retailers, although they often purchase through large grocery wholesalers such as Cash & Carry which was formed from the older United Grocers grocery merchandising company.

Poverty conditions in the city are approaching the same devastating levels as before the War On Poverty programs during the 1960's Johnson Administration programs, due to the high unemployment among auto workers as the recession worsened, and as Detroit's middle class began to vanish, it forced many large grocery retailers to give up on the city. Now only many neighborhood stores remain to service the public in the city.

Food Stamp applications have soared in the city, but even that wasn't enough to keep many large grocery retailers in business in the city. As the Detroit economy worsened, large retailers were forced to close as the bottom line worsened.

The grocery business is difficult enough. But in a large city like Detroit where the buying power of many residents has collapsed, even the slick advertising promotions by advertising firms on the behalf of the major grocery retailers just weren't enough to keep many large companies in business. They were forced to quit business in the city.

In many ways Detroit has become something like the film MAD MAX. Instead of gangs looking to plunder for gasoline, hungry persons in Detroit often create huge shoplifting or theft problems for retailers there as many people now have only limited money to purchase food.

While all people need to eat or drink to live, poverty has created a huge business crisis in Detroit for grocery retailers. This recession may forever change the business landscape for many cities. creating a permanent market re-alignment in many business sectors.


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