Our Black Year (39 page)

 

There were a significant number of gaps in availability of consumer products /services provided by some of the identified Black-owned businesses in the Chicago metropolitan area. As shown in
Exhibit 2
, product sectors where the Andersons were most noticeably affected were Clothing Merchandise, General Merchandise, and Restaurants. This means that dollars were likely left on the table during this Empowerment Experiment, and this represents a market for businesses to meet. Understanding the target market by utilizing tools such as surveys to assess their product/service needs is critical to identifying these gaps. Doing this enables growing
businesses to determine the optimal mix of products/services to serve their target, which ultimately helps maximize the consumer experience, the dollars spent, and the likelihood of repeat business.

Many of the recommendations identified speak to existing business owners in terms of growing and developing their businesses. However, there is a great opportunity for Black entrepreneurs to capitalize on industries where few or no Black businesses currently exist. For example, The Empowerment Experiment illuminated a lack of Black-owned businesses within the Chicago metropolitan area in core industries such as Grocery/Produce, Insurance, and Luxury Retail. Increasing Black business representation in all industries is positive. However, targeting industries where there is severe Black owner underrepresentation provides entrepreneurs a significant value-capture opportunity. Industries where there is already a proliferation of accessible, well-advertised competitors will be harder for entrepreneurs to penetrate than industries in which a major need is going unfulfilled within the Black community. Entrepreneurs need only research the dynamics of their specific community to determine the gaps that need to be addressed and find convenient and unique ways to deliver to customers. Taking advantage of these opportunities will begin to lay the foundation for sustainable and differentiated Black businesses and ultimately lead to Black economic empowerment.

During The Empowerment Experiment, the Andersons struggled to find a Black-owned grocery store. Farmers Best Market, the sole grocery store they found, which was started by Karriem Beyah in 2008, has since closed due to high mortgage costs. Per Karriem, an individual needs “seven figures or more” to establish a grocery retail operation in the Black community.
¹⁴
Prior to Farmers Best Market, Chatham Grocery was the only Black-owned grocery store in Chicago serving African American residents for 25 years. However, it was sold to a Lebanese investor despite efforts to find a Black buyer. The country has seen a decline in Black-owned businesses after desegregation; the predominantly African American Garfield Park neighborhood in Chicago has seen a decline in retail stores from 900 businesses in the 1960s to only 89 in 2007.
¹⁵
Neighborhoods that were once solely serviced by Black-owned grocery retailers are now food deserts—isolated geographic areas, typically inhabited by minorities, where there is no access to fresh foods.

On a macro level, there was a time when Black-owned grocery stores were plentiful. According to the
Encyclopedia of African-American Business
, 6,339 Blacks were identified as being owner/operators of grocery stores.
¹⁶
“In the early 1930s, grocery stores were considered the largest category of Black-owned enterprises.”
¹⁷
An unfortunate by-product of the civil rights movement and the end of segregation, however, was the dispersion of the Black consumer. “The numbers and strong economic base in [B]lack communities, unified out of necessity during segregation, were diluted into mainstream.”
¹⁸

At the beginning of the twenty-first century, there were only 19 Black-owned grocery stores in the United States.
¹⁹
This number included the then successful Community Pride grocery stores of Richmond, VA,
which were ranked number 44 on the Black Enterprise Top 100 Industrial /Service Listing for 2003.
²⁰
In 2004, Community Pride was forced to close its doors due to problems with its supplier.
²¹

Today, it is extremely difficult to locate Black-owned grocery stores. Our online search yielded three Black-owned grocery stores; however, we later learned that the telephone number listed for Food World (Southfield, MI) was wrong, and the Bravo supermarket in Harlem is actually Hispanic-owned and not Black-owned. The only Black-owned grocery store that is relatively easily found is Leon's Thriftway in Kansas City, MO. This store was founded in 1968 by Leon Stapleton. He stated that when he started Leon's Thriftway there were several Black-owned grocers in Kansas City, but now he is the only one left.
²²

According to the 2002 Census Economic Report, there are 9,016 Black-owned food and beverage retail businesses.
²³
This number may be misleading, as it includes businesses such as liquor retail stores and specialty food stores in addition to grocery stores. Even so, when compared to the total number of food and beverage stores in the United States, 148,901, Black-owned businesses only represent 6 percent.
²⁴
This is disheartening considering Blacks comprised 13 percent of the US population in 2002.
²⁵
This is also interesting given that Black consumers overindex in grocery
purchases as compared with the rest of the population.
²⁶
These numbers demonstrate why the Andersons had a difficult time finding Black-owned grocery retailers. In order to reflect the percentage of Blacks within the United States, nearly 10,341 additional Black-owned grocery stores need to be opened. This demonstrates a significant opportunity for Black entrepreneurs to capture, as this is a market that is not being served by mainstream retailers such as Safeway. However, capital requirements need to be lessened by assistance from the Small Business Administration to allow Black entrepreneurs to open these retail operations as illuminated by Karriem Beyah's unsuccessful efforts.

According to a report that discussed the successful creation of Minority Owned Businesses, “viable small businesses capable of expanding their operations and generating jobs commonly possess three traits: (1) involvement of skilled and capable entrepreneurs who have (2) access to financial capital to invest in their business ventures and (3) access to markets for the products of their enterprises.”
²⁷
By the expansion of certain Empowerment Experiment principles, with a larger, more geographically diverse sample, Black entrepreneurs may be able to make the case to themselves and investors that they will have access to the right markets and therefore acquire the needed capital.

Health crises within the Black community are often attributed to the lack of fresh food grocery stores in minority communities. For example, “In 2006 […] only 41% of stores in South L.A. sold fresh produce compared with 71% of stores that sold fresh produce in L.A. County.”
²⁸
With
adequate marketing, appropriate pricing, and consumer-convenient locations, this is an opportunity for Black entrepreneurs to not only generate capital, but provide a more far-reaching community benefit.

The Empowerment Experiment has laid the foundation for leveraging the economic power of the Black American consumer. Although the breadth and depth of the experiment were limited, it reinforces key issues and opportunities within this large consumer base that have direct implications for the growth of Black entrepreneurs and ultimately for “self-help” economics. The research identifies the immense impact that can be implemented if Black consumers make a small change in their current shopping and purchasing habits and if Black entrepreneurs implement some of the lessons learned from the experiment. Ultimately, successful execution of The Empowerment Experiment on a larger scale, consistently, throughout the nation will create generations of financial stability and wealth in the Black population that have yet to be achieved.