My family and I regularly shop at two different Target stores. There’s the one in the Black neighborhood, where we go to get Black haircare products, and then there’s the one in the white neighborhood, where we go to get everything else. Silly, right? With gas prices being what they are and the high opportunity cost of my time, why go to two different Target stores? Why not just get everything that we need from the Black Target?
The reason is that the white Target offers a much higher quality of consumer experience. In our house, my family refers to it as the “Good” Target. It’s the one where the bathrooms and floors are clean, the shelves are stocked and organized, the lines are short, there’s always someone with a friendly face to help you, and the laundry detergent isn’t locked up.
But it’s not just Target. We also have a “Good” Starbucks and a “Good” Home Depot. This arrangement—the discriminatory practice whereby chain store businesses offer a lower quality of consumer experience in poorer, more BIPOC neighborhoods than in whiter, more affluent neighborhoods—is called consumer redlining. It is related to, yet distinct from, the more familiar practice of retail redlining, whereby businesses avoid opening stores at all in Black neighborhoods. Indeed, what is most disturbing about consumer redlining is that it seems to happen within the same chain of stores where, presumably, the consumer experience is supposed to be broadly consistent across different locations.
How common is this practice, and what drives it? To date, academic research has had little to say on the matter. However, in a recent paper, I use a battery of large data sets—including Yelp reviews for 16,000 stores (representing over 400 chains), detailed demographic neighborhood profiles, neighborhood measures of market demand, and neighborhood crime data—to investigate the following questions: is it generally true that, within the same chain, Black- and Latinx- located stores offer a lower quality of consumer experience than white-located stores? And, if so, how much of that is due to discrimination versus other factors such as neighborhood differences in income or crime?
Before jumping into the statistical analysis, first consider the geographical evidence. The figure below is an ArcGIS-produced map showing the largest metropolitan statistical area (MSA) in my dataset, the Philadelphia-Camden-Wilmington MSA. On the map, the different colored polygons represent US census tracts (i.e.—neighborhoods), with the colors corresponding to the predominant race / Latinx origin of the tract: yellow for Black, turquoise for Latinx, and tan for white. Every color has grey shading to it, and the greyer the shading, the more concentrated the racial grouping in the census tract. Each orange circle, meanwhile, represents one of the 4,655 Yelp-reviewed chain stores in the Philadelphia area. And, the size of each circle corresponds to the average Yelp rating of that establishment, with larger circles corresponding to higher average Yelp ratings. (Because circles will often overlap when establishments are close to one another, making it difficult to see smaller circles, I have condensed all Yelp ratings that are 4 or lower into the smallest circle size. This means that the only diameter variation visible in the map is for establishments that range from 4 to 5 for their Yelp rating. Essentially, this map displays where the top-rated establishments are for large American chains.)
Two things are immediately apparent from this map. First, census tracts that are predominately Black and Latinx have fewer Yelp-reviewed establishments than census tracts that are predominately white, suggesting the existence of retail redlining. Second, and more central to my study, census tracts that are predominately Black and Latinx are less likely to have top-rated establishments (i.e.—larger circles) than white census tracts.
Statistical analysis confirms these observations: my main finding is that, within a given chain, stores that are located in Black or Latinx neighborhoods have about one-quarter lower star rating, on average, than those same chain stores that are located in white neighborhoods. This is true even after controlling for neighborhood differences in income, education, population, number of housing units, market potential, crime, and other confounding factors. The effect is larger in certain types of chain businesses like coffee and snack shops (one-quarter to one-third star difference), fast food (one-third star difference), restaurants (four-tenths star difference), and big box and discount stores (one-half star difference). For other types of chain businesses (such as automotive supply, grocery stores, gas stations, and wireless stores), there is no measured difference between the quality of consumer experiences offered between BIPOC and white located stores.
How and why does this practice of consumer redlining persist? The explanation likely has to do with what economists call demand elasticity. Because of retail redlining, there simply isn’t enough retail competition in BIPOC neighborhoods. So, even when the quality of the consumer experience is low in a BIPOC-located chain store, demand for goods and services at that store will be relatively stable (or inelastic) simply because there is nowhere else nearby to shop.
Much more research needs to be done on this topic, as other questions loom. First, through which mechanisms does consumer redlining operate? In ongoing work with a co-author, I am attempting to determine, for instance, whether BIPOC-located chain stores are disproportionately allocated fewer resources (such as fewer employees, fewer cleaning supplies, or less employee training), and whether these disparities then lead to these lower ratings. Second, what legal remedies, if any, exist to address consumer redlining? The answer here is not straightforward because retail establishments do not count as places of public accommodation, so the protections of Title II of the Civil Rights Act of 1964 do not apply. In on-going work, I am exploring the extent to which federal and state consumer protection laws can be used to address consumer redlining.
To be clear, what is at issue here is not just clean floors and stocked shelves. Rather, it is access to comfortable shopping spaces. When chain stores are consumer redlined, BIPOC shoppers must choose between the discomfort of shopping in disorganized and messy facilities in their own neighborhoods, and the discomfort of shopping in cleaner facilities in whiter neighborhoods where they are often subject to racial retail profiling or “shopping while Brown.” This is a choice that no consumer should have to make. Comfortable shopping spaces should be afforded to all.
