Brian Sozzi Discusses Food Deserts

Brian Sozzi of Wall Street Strategies is out with a research report on Walgreens (NYSE: WAG) and the term "food desert."

In the note, Sozzi writes, "A food desert is a spot located in an economically sensitive urban setting where access to fresh, affordable food is hard to find. Wal-Mart (WMT) brought the term into popular use months ago in its ongoing attempt to finally enter the NYC retail market and in announcing countless fresh food initiatives. Since then, food desert has receded into the background, which we find interesting given the apparent hiccup in the economic recovery that began during the summer and continued rise in food stamps usage/poverty levels in the country. Today, Walgreen (WAG) reminded us that food deserts are alive like a forest filled with evergreen trees, and demand attention by those retail chains that dominate the urban landscape (think Duane Reade, Rite-Aid, CVS, Walgreen, dollar stores). Not only does adding access to fresh food in stores address a growing social issue, but of course it could serve as a means to pad profits; selection is often limited to high frequency branded items that carry a fatter price-point than the same products offered at a supercenter."

Shares of WAG are down 77 cents in pre-market trading to $35.26, a loss of 2.14%.