Are warehouse stores making Americans fat?
Americans' growing obesity levels may be due to a "Field of Dreams" problem: "If you build it, they will come."
Instead of baseball diamonds, though, American corporations have been building supercenters, warehouse stores and restaurants, which may be one reason why consumers keep getting fatter, according to a recent study published by the National Bureau of Economic Research. In short, cheaper, calorie-rich food in bigger portions -- all available at warehouse stores and restaurants -- may be a leading culprit.
The study found that general economic factors, ranging from income to unemployment, account for 59 percent of the rise in obesity, which has expanded from 13 percent in 1960 to 35 percent by 2012. Yet the biggest individual factors driving that jump were the number of big-box stores, such as Walmart (WMT) superstores, and the increase in restaurants.
"Supercenter/warehouse club expansion and increasing numbers of restaurants are the leading drivers of the results," the researchers concluded. "We also find that supercenter and warehouse club density is associated with a higher probability of weight loss attempts."
While previous research has looked at specific economic factors, such as income, on Americans' weight, this was the first study to incorporate a broad range of economic changes and how affect consumers' waistlines. When it comes to warehouse stores and superstores, these shift the economic incentives for consumers, study coauthor Charles Courtemanche, a health economist at Georgia State University, told CBS MoneyWatch.
"The biggest change is simply that they reduce the price of food," Courtemanche wrote in an email. "There is good evidence that supercenters and warehouse clubs have a price advantage over competitors on the order of 10 percent to 30 percent. Warehouse clubs also sell food in bulk, which could possibly play a role as well. Having more food around tends to make people eat more."
Of course, it could be that Walmart and other superstore and warehouse store operators are simply picking the right spots to open their businesses, targeting Americans who are more likely to want to buy cheap and sometimes fattening food.
"We have taken a number of steps toward ruling out this possibility, though we can't rule it out completely," Courtemanche noted. "We have controlled for demographic characteristics as well as over two dozen other economic factors related to general economic characteristics, labor market characteristics, and the monetary and time costs of eating, exercise, and smoking."
Still, given that most Americans are within driving distance of one of these giant stores, the success of such superstores may indicate a susceptibility to buying -- and eating -- in bulk.
More research is needed to examine how warehouse stores impact Americans' eating habits, Courtemanche wrote. For instance, it could be that consumers are simply making an economic trade off, opting for more food at a lower price in exchange for extra weight, or that shoppers are triggered by impulse buys at warehouse stores that lead to overeating.
While bulk purchases of macaroni and cheese and M&Ms might be good for Costco's bottom line, there's a long-term negative consequence for consumers and taxpayers. Annual costs amount to $190 billion, with 112,000 people dying every year from obesity-related causes, the study noted. About half of the medical expense is paid for by Medicare and Medicaid.
There are also more restaurants today that Americans can tuck into compared with five decades ago, when married women who didn't work spent over two hours a day cooking and cleaning up from meals. Today, women spend less than an hour a day cooking, while men on average only spend half an hour a day on food prep.
On the hand, calorie-laden dishes such as the Cheesecake Factory's Bruléed French Toast are usually only a short drive away from home. For a few bucks, that will add almost 2,800 calories and 93 grams of saturated fat, or about a full work week's worth, to a consumer's waistline.
Despite the paper's findings, Courtemanche said the stores have an overall beneficial impact. "They bring considerable consumer benefits in the form of lower prices," he noted.