Costco's Stamps of Disapproval

As the City Room blog has reported, Costco is running into considerable flack because of a store policy that doesn't honor food stamps: "Costco in general has a reputation of being a socially conscious company,” said Eric N. Gioia, a city councilman from Queens who last year began a campaign asking Costco to accept food stamps after discovering it did not during the “live on food stamps for a week” stunt. “There is no logical reason for someone not to accept food stamps. It is not only compassionate, but it’s good for their bottom line.”

Of course, the fact that the Costco store in Long Island City is a stone's throw from public housing with 30,000 low income residents, only adds to the controversy-since these folks aren't able to take advantage of the store's bargains by using food stamps. The fact that Costco has a $50 membership fee also restricts the availability of the retailer for all New Yorkers.

One of our main problems with this policy, is how the citing of these box stores-and BJs doesn't accept food stamps as well-impacts local supermarkets; the box stores drain higher end customers and erode the ability of neighborhood markets to survive. In effect, you create an oasis in one spot-and desert everywhere else.

And the store's food stamp policy is designed to redline the poor. When the Alliance stopped a Costco store from locating in Hell's Kitchen, we discovered that the company's SEC filing detailed how their refusal to accept food stamps-as well as its membership fees-controlled company "slippage" (corporate speak for theft).

Yet, as Albor Ruiz opines this morning, it is the poor who are most in need when it comes to the availability of food stamps; and Costco's policy has a disparate impact on those most in need: "Councilman Eric Gioia (D-Sunnyside) is also worried about the food situation. He is demanding that Costco change its policy of not accepting food stamps. "Especially with the rising food prices, hundreds of thousands of people in New York find themselves in a position they never thought they would be in - having to choose between buying food or paying the rent," Gioia said. In Queens, the Costco on Vernon Blvd. in Long Island City is within walking distance to the nearly 30,000 city housing residents of Queensbridge, Ravenswood and Astoria Homes that Gioia represents."

City Room captures some of this flavor: "The government pays dollar-for-dollar for the food stamp use, so it is not as though Costco has to discount their margins. Costco, which has created an image that has both upscale and downscale appeal, has been known for attracting the elite (at least in Washington). But perhaps Costco is more wary of the other end of the spectrum, finding western Queens appealing for its real estate, but not for its customer base."

So NYC needs to evaluate all special use applications for box stores-particularly if it wants to preserve our disappearing supermarkets. The other night, Eyewitness News dramatized the extent of this problem-highlighting Key Food on Bruckner Boulevard, and the loss of markets in East Harlem. As the Sandra Bookman report stated: "This is happening all over the city," said Enrique Vega. The South Bronx community activist is among those fighting to keep the Key Foods at Bruckner Boulevard and White Plains Road from closing when its lease expires at the end of the year."

And our good friend Mary McKinney weigh in as well: "It's about the dollar. Forget about the people in these communities. We have lived in these communities. We have built these communities, and most of the people that own this real estate, don't live in our community. We're saying think about us," said Mary McKinney. In fact, more and more residents of New York City's poorest communities are being forced to buy their food at neighborhood bodegas, few of which carry nutritious fresh produce."

So the Costco situation is bigger than simply the store's refusal to accept food stamps; and the public health is at stake: "And that, says the Bloomberg administration, points to a looming health crisis."Those areas of the city that had the highest incidents of obesity and diabetes also had a lack of neighborhood grocery stores," said planning commissioner Amanda Burden."

The more we approve new box stores, the greater the threat to neighborhood supermarkets, stores that do accept food stamps. And this supermarket dearth was a topic at yesterday's Food Policy Conference that we attended at Columbia. As the Politicker points out: "Meanwhile, the city is thinking about incentivizing the construction of supermarkets—which have been on the decline in recent years—or even building them on public land."

In the coming battle of Brooklyn box stores, this issue will be front and center, since the promotion of BJs and Costcos can't coexist with the concomitant support for supermarket growth. Choices need to be made.