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I'm more than positive that food deserted areas could not afford Whole Paycheck and Walmart is never the solution. It will be interesting to see how this plays out. If its successful then I forsee this being used in more than just Chicago.
Should just empower a local resident to build a local mom and pop grocery store. Subsidize them so they can compete against the larger chains if you have to, but that's how it used to be done and can still be done. Eventually they probably wouldn't need the subsidies because they're going to focus on what they can sell. They might not have the selection of a big chain, but if they aren't needing to compete with a billion dollar company that operates at a loss to drive them out of business, they'll do ok.
The fundamental cause of every problem in the US always comes down to the zoning code. Every. Single. Time.
You know why those mom and pop grocery stores don't exist? Because in most cases, they're not allowed to because corner stores in residential areas were outlawed 75 years ago. Also, even when they are allowed to exist, the real reason they can't compete is because the zoning code forces car-dependency in a whole bunch of other ways, which (figuratively and literally) drives consolidation into big-box stores with gigantic parking lots.
Why give a private entity money when you can just do it publicly? And in the process not sell only what's profitable rather than what provides good health to residents. The existing mini-marts and what not are selling what's profitable (non-perishable processed food).
The Post Office is a good example of how much easier it is to just run it publicly. The Post Office literally generates revenue, whereas subsidizing a private entity to do the same would be just throwing tax dollars down the drain with little return.