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A Business Model That Brings Jobs, Health, Services -- and Joy -- to the Hardest Hit Communities

Want proof that the goals of business and the needs of the most vulnerable can align? Meet Jeff Brown, fourth-generation grocer and owner of the 10-store ShopRite regional chain based in Philadelphia.
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Want proof that the goals of business and the needs of the most vulnerable can align? Meet Jeff Brown, fourth-generation grocer and owner of the 10-store ShopRite regional chain based in Philadelphia. By mixing old-fashioned customer service with innovative new approaches, Brown is chipping away at the nation's jobs challenge, starting in the communities hardest-hit by the financial crisis.

Giving a Second Chance to Ex-Offenders

After being sentenced to jail for five years for selling drugs in his hometown of Lancaster, PA, Louis Rivera was determined to turn his life around. An eighth-grade dropout, he spent his first year in prison preparing for and obtaining his GED. Upon release, he moved to Philadelphia and sent out dozens of resumes, hoping, at age 31, to secure the first real job of his life.

No employer responded. Louis was frustrated and scared: "I knew I could not go back to the life I had been leading. I needed a break." He walked to the Brown's ShopRite grocery store down the street from his apartment where he had applied online. He said to the hiring manager, "I'm not leaving here until you give me a job." She laughed at his mix of pluck and desperation, and after listening to his story, gave him that break: a minimum wage job in the seafood department.

Louis had gone to the right place. He did not know it at the time, but Brown's ShopRite is the only grocery store chain in Philadelphia, and possibly in the nation, with an explicit focus on hiring ex-offenders. Jeff Brown explains that these employees are just as successful as a group compared to those without criminal records. "I have not seen evidence that the fears are true," he says.

Brown believes his success with hiring ex-offenders is due to a strong partnership with a nonprofit workforce training organization that screens ex-offender candidates to find those who are a good match for the grocery's culture, provides training in "soft skills" like how to be successful in a work environment, and then checks back in with the workers once they are on the jobs. From a profit perspective, hiring ex-offenders actually saves Brown money, since workforce training dollars support the initial screening, training, and follow-up.

Four years and three promotions later, Louis is a model of the type of upward mobility that is on the wane in America. As assistant store manager, he brings home $53,000 per year plus benefits. He has been able to provide for his fiancée and three children, and now owns a home and two cars. He plans to stay with the company, and hopes to become a store manager one day.

Greening Food Deserts

Brown is also one of the first grocers to recognize that opening stores in underinvested low-income communities and communities of color that other retailers have fled or avoided can be profitable. Six of Brown's stores are located in areas that were "food deserts" before he opened his stores: low-income neighborhoods without grocery stores or other healthy food retailers. Food desert neighborhoods tend to have higher rates of diet-related health problems like obesity and diabetes.

One of those stores is located in West Philadelphia's Parkside neighborhood. An African American community of about 100,000, Parkside went without a supermarket for nearly three decades.

Since its 2008 opening, the Parkside ShopRite has been an overwhelming success. It brought 260 jobs to the area, and 40 of them went to ex-offenders. The store's roof is covered in solar panels, and the product mix is tailored to the community's cultural preferences, including halal products and African food staples. Like the other stores in the chain that opened in food deserts, overall sales, revenue, and fresh product sales are on par with suburban stores.

Brown says that making fresh foods available in communities with limited access to them is changing people's diets, shifting them away from processed food to a healthier mix that includes more produce and fresh foods. A recent study found that childhood obesity rates are dropping in Philadelphia, suggesting that the city's efforts to increase access to healthy food in communities and schools is making a difference.

Creating Community Hubs

Every ShopRite store includes a community room that community groups can use for free. A new store opening in North Philadelphia will include two community rooms, one of which will contain cooking equipment that can be used for nutrition classes.

Brown is experimenting with bringing other needed services in to the stores. In September 2011, American Heritage Federal Credit Union opened up a branch in the Parkside store, offering free checking and ATM services with no minimum balance requirements. A second branch was opened in the Roxborough store in June 2012. The banking services are incredibly popular, with lines most days of the week.

More recently, Brown has sought to increase access to affordable health care in these communities by opening nonprofit clinics in stores. The first clinic opened five months ago and a second clinic will open in the Parkside store within the next several months. The clinic has not been an instant success, but the model is being tweaked to meet community needs, including implementing a sliding fee scale for uninsured patients.

Sparked by a Public-Private Partnership

The six ShopRite stores located in Philadelphia's grocery-poor neighborhoods could not have opened were it not for the Pennsylvania Fresh Food Financing Initiative (FFFI), a public-private partnership that provides start-up funding in the form of one-time loans and grants to help retailers open or improve food retail stores in underserved low- and moderate-income communities.

The FFFI program has impressive results: 88 new or renovated stores in urban, rural, and small-town Pennsylvania, and more than 5,000 jobs created or retained. And the idea has spread: Fifteen other states have taken steps to set up similar public-private partnerships. In 2010, the federal government began a similar initiative, the Healthy Food Financing Initiative (HFFI), which is also a central pillar of Michelle Obama's Let's Move campaign. Since its launch, HFFI has provided nearly $500 million in loans, tax credits, and grants toward healthy food retail projects including grocery stores, farmers' markets, cooperatives, food hubs, and other innovative efforts.

Brown believes that his comprehensive approach to solving community challenges is the key to his success: "Believe it or not, solving the community's problems helps on the financial side as well." Cultivating strong relationships with community leaders, for example, helps to increase sales and reduce theft.

He also thinks his success can be replicated elsewhere, and has begun a nonprofit consulting firm, UpLift Solutions, to share what he's learned with other business leaders. A number of major cities are getting ready to launch citywide initiatives focused on hiring ex-offenders using Brown's model, and other major retailers have expressed interest as well.

The Brown's ShopRite story is proof positive that it is possible to meet a community-oriented mission--to "bring joy to the lives of the people we serve"--while turning a profit. It also shows how well-crafted public-private partnerships can be critical to making this happen. Hopefully the model is paving the way for a new generation of entrepreneurs who are meeting the "triple bottom line" of people, planet, and profit.