Last updated: 10/09/2024
Grocery stores in deprived areas with low supermarket density
Provide business rates relief of 75% to new or expanded businesses selling fresh fruit and vegetables opening in deprived areas with low supermarket density
- Very low impact on obesity
A percentage estimate of how much the policy would reduce national obesity rates
- Relative reduction in obesity prevalence: 0%
- Moderate evidence quality
A rating of the strength of evidence, accounting for both reliability and validity of the evidence
- Reliability and validity rating: 3/5
- Low cost to governments
Cost to UK and devolved governments over 5 years
- Cost to governments over 5 years: £6m
- Benefit to governments per year: £0
What is the policy?
This policy would provide business rates relief to businesses that operate in deprived areas with low supermarket density and where access to affordable and nutritious food is limited. The aim is to increase the number of grocery stores in these areas in order to make more affordable, varied and higher-quality food more accessible, facilitating healthier diets.
Recent context
In the UK currently, more than a million people live in areas where there is limited access to fresh and affordable food. Low access to specific food environments is associated with increased rates of obesity (Cooksey-Stowers et al. 2017). Supermarkets play an important role in these communities by providing better food accessibility. They are more likely to offer lower costs, wider selections, and superior food quality than smaller outlets like convenience stores, which are more common in these neighbourhoods (Titis, 2023). In light of these challenges, business rates relief for grocery stores in food deserts hold the potential to significantly alleviate food insecurity and improve population health outcomes.
Business rates are the payments which occupiers of commercial properties are obliged to pay local authorities (LAs) to contribute to funding local services. Some businesses will be entitled to discounts to business rates if they meet certain criteria. These discounts are often used to support the growth and prosperity of specific businesses. Non domestic rates (NDRs) is the term used for business rates in the devolved administrations. NDRs are devolved to the Welsh Government, providing the Welsh Government with the ability to introduce new rates relief programmes to support its strategies. NDRs are also devolved in Scotland, where they are set by the Scottish Government but administered and collected by LAs. There is already a system in place to give rates relief to small businesses for example where they are part of a business accelerator or taking over a long-term inactive business. There is therefore an opportunity for the Scottish Government to implement this policy.
Case studies
Food Retail Expansion to Support Health (FRESH), New York City (NYC), USA
Although UK and US food access issues may not be directly comparable, the USA can provide us with interesting lessons.
FRESH is a voluntary city-level initiative aimed at promoting economic and financial growth. It provides zoning and fiscal incentives to encourage grocery stores stocking fresh, healthy produce to set up in NYC’s most deprived communities and supports property owners who agree to build a full-service food market. The zoning incentives allow buildings in which FRESH stores are located to be larger than is typically permitted by the zoning regulations and allow less parking than is normally mandated. Fiscal incentives are also provided which include tax breaks for qualifying FRESH food stores to lower costs of owning, leasing, developing and renovating retail grocery space.
According to a 2023 report, there were 30 FRESH stores, with another 21 in development, serving up to 1.2 million people previously underserved in fresh, healthy produce. There is limited evidence however on how the FRESH programme has impacted the diets of New Yorkers, and existing studies present a mixed view on whether the programme has increased the consumption of healthy produce. One study concluded that new neighbourhood store provision is ineffective as a means of tackling obesity, but the study faced various limitations including its time span.
Considerations for implementation
Business rates relief would require likely legislative change via amendments to the Local Government Finance Act 1988 in England, although different mechanisms would be required in the devolved nations, and some rate reliefs which have previously come into effect were pursued via non-legislative means. For instance Scottish NDRs are covered by the Non Domestic Rates (Scotland) 2020 Act. When designing the policy, policymakers would need to consider how to avoid businesses ‘gamifying’ the policy, for example by carefully considering the definition of an ‘expanded’ business.
Estimating the population impact
We estimated that this policy would reduce the prevalence of UK obesity rates by approximately 0%
Estimating the per-person impact
We estimated that this policy would reduce average daily calorie intake by approximately 0 kcal per person
Data for modelling impact was taken from Dubowitz et al. (2014).
This study was a natural experiment which enrolled over 1,300 households from two comparable neighbourhoods in Pittsburgh, Pennsylvania. One neighbourhood had received a full-service supermarket (intervention group), the other had not (control group). The study did not observe differential improvement between neighbourhoods in BMI or fruit/vegetable consumption. While there was a difference in energy consumption between groups (-178kcal, p<0.001), this change was not associated with increased use of the supermarket.
Therefore in our analytical model, we assumed that the net daily calorie deficit for both children and adults was zero.
Estimating the population reach
In our analytical model, we applied the effect sizes to people living with overweight or obesity. For adults, that is people aged 18 or above with a BMI of 25+. For children, that is children aged 5–17 with a BMI percentile ≥85.
The modelling assumes this policy affects: adults with a BMI ≥ 25, living in areas of deprivation (Index of Multiple Deprivation (IMD) 4 and 5) and in a food desert in England.
Changes in the prevalence of people living with obesity
Analytical modelling found that this policy would have no effect for adults and a small, non-significant effect for children over a five-year period.
Table 1 shows the percentage reduction of adults and children moving from BMI≥30 or BMI percentile ≥ 85 into healthier BMI category following the introduction of supermarkets in food deserts (five-year follow up).
| Adults (England and Wales) | Children (England and Wales) | Adults (Scotland) | Children (Scotland) |
| 0% | 0% | 0% | 0% |
Cost and benefits
Cost over 5 years
We estimated that this policy would cost the governments approximately £6 million over five years
We commissioned HealthLumen to estimate the cost of the policy to both industry and governments over a five-year period.
Table 2 below shows a breakdown of costs. The direct costs to the governments are estimated at £6 million. Please see cost calculations appendix for more details.
| Group affected | Cost | Horizon | Detail |
| Costs | |||
| Government | £6m | Annual (5 years) | Reduction in business rates offered as a subsidy by government |
Total annual benefit
We estimated that this policy would have an annual benefit of approximately £0
Based on our analysis, and using analysis conducted by the Tony Blair Institute and Frontier Economics we estimate this policy would not lead to monetary benefit for the governments.
Impact on disease incidence
Based on our analysis and analysis conducted by HealthLumen, there is no evidence that this policy would impact disease incidence avoided after five years.
Behind the averages: impact on inequalities
Implementing a policy to provide business rates relief for grocery stores in food deserts can help address inequalities in food access. By incentivising the establishment of grocery stores in these regions, the policy enables individuals who may lack transport or access to healthy food options to obtain affordable and nutritious groceries locally. This initiative promotes equity by ensuring that all members of the community have equal access to essential food items, regardless of their socio-economic status or geographic location.
There is no evidence this policy would increase weight stigma.
Rating the strength of evidence
We asked experts working in the fields of obesity, food, and health research to rate the strength of the evidence base for each policy, taking into account both reliability (size and consistency) and validity (quality and content) of the evidence. Policies were rated on a Likert scale of 1–5 (none, limited, medium, strong, and very strong evidence base). The Blueprint Expert Advisory Group rated this policy as having a Medium evidence base.
Fund citizen incentives to improve healthier behaviours
Allocate £500 million over five years to fund a programme of financial incentives to improve health behaviours in local authorities (LAs) with the highest obesity rates