Communities with enormous buying power are going unserved. Stores with high quality merchandise and good service are scarce in their neighborhoods. Are these markets in scattered, inaccessible locations? In emerging countries plagued by political and economic risk? These overlooked markets are both real and close at hand. To find them, retailers need only look in their back yards in Americais inner cities. Conservatively, inner city consumers constitute $85 billion in annual retail buying power far more than the entire country of Mexico. They live in densely populated areas with concentrated buying power. Nevertheless, unmet demand tops 25 percent in many inner-city markets, and reaches 60 percent in others. Often, inner-city residents end up having to take a long bus ride simply to buy a bag of groceries at competitive prices. What inner-city consumers often do have available locally are poor quality products and high prices. One African-American resident of Harlem captured the frustration of many inner-city residents about the difficulties of getting value for their hard earned wages: "my money a different color, too?" What has led to this dearth of retail supply? Retailers, chains and independents alike, have overlooked the promise of the inner-city market. Some might consider it discrimination. We call it bad strategy. In todays hyper-competitive retail environment, the cost of bad strategy is rising. Retailing is flooded with innovative players experimenting intensively with new formats ﾝwitness the rise of power retailers. Shareholder pressures are driving aggressive growth strategies as these innovative formats rapidly roll out. Growth strategies, in turn, are increasing saturation in already highly competitive suburbs and accelerating the push into foreign markets. Penetrating the largely untapped American inner city is often much more promising. The infrastructure required for doing business is already in place, given to the proximity to local suppliers and the citys core. And, there is no need to struggle with a new language, culture, and currency. Retail development in inner cities gives residents access to quality goods and services at competitive prices, allowing them to share in shopping experiences most Americans take for granted. They are ready, willing, and able to spend their considerable aggregate income. For growth-oriented retailers seeking revenues and new opportunities in todays global marketplace, the inner city is perhaps the last large domestic frontier.

Communities with enormous buying power are going unserved. Stores with highquality merchandise and good service are scarce in their neighborhoods. Are these markets in scattered, inaccessible locations? In emerging countries plagued by political and economic risk? These overlooked markets are both real and close at hand. To find them, retailers need only look in their back yards ﾝin Americas inner cities.