Zohran Mamdani, the recently elected mayor of New York City, achieved success last year through a series of bold commitments. One of those was a commitment to establish a city-operated grocery store in every borough to combat both food deserts and increasing grocery costs.
However, his concept has yet to materialize into a concrete initiative. Atlanta has outpaced him: Last summer, the city inaugurated Azalea Fresh Market in its downtown area, a publicly funded grocery store.
“Access to fresh food is essential,” stated Atlanta Mayor Andre Dickens. “Food plays a vital role in a healthy community.” His support for a grocery store is personal: During his high school years, he commuted from his lower-income area to work at Kroger.
The market is run by Savi Provisions, a private entity, and offers a comprehensive selection of products typically found in conventional grocery stores.
Azalea Fresh Market has introduced what it dubs “Paul’s Promise,” which includes 50 to 60 staple items such as eggs and bread at “the lowest price possible,” according to Nair. By leveraging supplier agreements through the Independent Grocers Alliance and increased profits from items like prepared foods, the market is able to keep pricing close to the actual cost. Furthermore, the store accepts SNAP and WIC benefits.
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As the Trump administration reduces food program funding, community-oriented groups continue to provide for those in need.
According to Dickens and Paul Nair, CEO of Savi Provisions, the store is performing well so far. With daily customers ranging from 600 to 700 and an average purchase totaling $13, it demonstrates that shoppers are not making large monthly purchases, but rather visiting frequently. Although Nair hopes for even greater progress, he noted the store is “on track.” Savi is planning a second location in the Campbelltown Road area, which is currently under development with the city’s financial assistance.
In Fulton County, home to Atlanta, approximately 14 percent of the population is facing food insecurity. The locale surrounding Azalea Fresh Market is characterized by being “disadvantaged, disinvested,” as Dickens pointed out. There hadn’t been a grocery store in the downtown area for twenty years. “Grocery retailers have typically shunned these regions due to slim profit margins and perceived risks,” he added.
Initially, Dickens attempted the conventional strategy of enticing an established grocery chain to set up shop in both neighborhoods. He approached major brands and offered a range of incentives: tax reductions, free land, assistance with construction. “They still didn’t want to move forward,” he recalled. “I grew frustrated and decided, ‘We’re going to take it into our own hands.’”
Savi Provisions responded to the city’s request for proposals. The city contributed $8 million in tax incentives, grants, and loans, acquiring the land and demolishing the previous structure. Savi contributed $1 million of its own capital, and both partnered with the Independent Grocers Alliance to capitalize on its purchasing power and technical support.
The collaboration with the IGA aims to navigate what has emerged as a significant challenge for small grocery stores: the leverage that large retailers like Walmart and Kroger exert to negotiate pricing deals from suppliers. Through its greater reach, the IGA can arrange agreements with distributors and suppliers to secure preferable pricing for Azalea Fresh Market.
The grocery sector is tough. Perishable items spoil rapidly. Stores contend with challenges like theft and damaged goods. Profit margins are quite slim—ranging between 1 to 3 percent for larger retailers and up to 5 percent for smaller operations. It generally takes a new grocery store three to four years to become profitable.
The rationale behind Atlanta’s investment is that it will aid Savi during its formative years until it can attain self-sufficiency. Dickens mentioned that the city is prepared to support the store for three to five years; Nair aims for sustainability within one or two years.
