Exploring a Novel Approach to Enhancing Urban Food Affordability: Assessing Subsidy Policies for Food Retailers in China

Urban food affordability is pivotal to achieving the second of the United Nations Sustainable Development Goals (SDGs)—Zero Hunger. This paper introduces fresh evidence and innovative practices from the Global South, focusing on retailer-side strategies to address urban food affordability issues. Specifically, it investigates the impact of China’s policy on subsidizing and facilitating the establishment and operation of Affordable Food Shops (AFS). By analyzing policy documents and surveying food retailers in Nanjing, this study employs Propensity Score Matching (PSM) to quantitatively assess the AFS program’s effect on other retailers’ nearby food prices. The findings reveal a mixed and limited impact of AFS on food prices: of 15 analyzed affordable products, only six, mainly cheaper and non-perishable vegetables, showed price reductions ranging from 3.4 % to 7.0 %. These price reductions accounted for merely 0.96 % of the residents’ total food expenditure, indicating the limited effect of AFS on overall food affordability. This study underscores the necessity of a comprehensive policy approach that effectively addresses income and retail aspects to enhance food affordability among low-income populations. It also suggests refining retail-side measures to better target food affordability improvements, mainly through more focused subsidies and innovative distribution models.