Rural Grocery

A small grocery store anchors one end of Main Street in the town the Center for Rural Affairs calls home.

If you live in a rural community, you understand that our grocery store is arguably one of the most important businesses in town. Our store means more than just ready access to healthy food. Rural grocery stores provide jobs and generate tax revenue. Without a local grocery, the revenue that our food purchases generate goes elsewhere.

Having a grocery store also helps attract new residents to a town. Similar to a school, a post office, restaurants and churches, a grocery store makes a community a more attractive place to live. Grocery stores can also be social places where you run into neighbors in the produce aisle, introduce yourself to someone new in town, or catch up on local happenings with the cashier.

Not all small towns are as lucky as we are. The lack of a grocery store means residents have less access to healthy fresh fruits and vegetables, and the elderly and others without reliable transportation will tend to buy their food at convenience stores with more limited selections or go for longer periods of time between visits to the store.

These are just some of the reasons why the local grocery store is a crucial part of any viable community.

Ownership models and tips

8 steps to help small town grocery stores

Everyone needs to eat. Having a grocery store is more than just a place to buy food. It’s a necessity for any vibrant town. You can’t have a thriving community without healthy, energetic people eating good food. People look for a grocery store when deciding where to live, and residents will be more likely to stay in your town with a grocery store close by. 

Is your town’s grocery store struggling? Or have you lost your grocery store? Here are some simple first steps to get a handle on that situation. 

1. Get folks together. If you have the best grocery store in the world but no one shops there, it will fail. The first step to turning things around is getting leaders in your community bought in to the idea. Call a community meeting. Talk to the folks in your town who can sway others so they feel included in the idea. Be energetic and excited! (Having delicious food at the meeting doesn’t hurt.) 

2. Listen. What does your community need? Can you motivate them to be excited about a successful grocery store? Be sure to ask people at every turn what they’d like to see. What hours would be convenient? What kinds of products do people want to buy? Where should it be located? If necessary, are people willing to volunteer some time or invest money to make it happen? The more you listen, the more loyalty they will show. 

3. Consider all ownership options. Many folks think a grocery store should be an independent retailer, but there are many successful models. Community-owned stores, co-operatives, or school-based models are other options to consider. The Center for Rural Affairs has written a report on ownership models for grocery stores, which you can check out at cfra.org/renewrural/grocery. 

4. Stack enterprises. Lots of businesses have similar infrastructure needs. Could your grocery store have a coffee shop, cafe, bank, post office, or pharmacy attached? Are there other businesses or schools who could make use of the food distribution? More businesses using the same space and utilities equal lower costs.

5. Control energy costs. Utilities are one of the most costly parts of owning a grocery store. Consider ways to make your store more energy efficient. This can be as simple as putting doors or coverings on your coolers. Or you can get sophisticated with solar panels or a wind turbine for energy generation. I’ve seen systems that allow coolers to draw in frigid winter air from outside! 

6. Best customer service. The most successful grocery stores are committed to pleasing customers. Have a prominent suggestion box and a bulletin board where people can see the questions and answers. If a product is requested, see if you can carry it, and make a big deal about the fact that you now have it. Be visible in the store, and know people’s names. Smile! 

7. Involve everyone! If people have invested time, money, and energy into a project, they will want it to succeed. Make the store a source of community pride, and remember that a little positive peer pressure (with a smile!) can go a long way. 

8. Share stories. There are many other towns doing exactly what you’re doing. Find their stories (or post your own) to find inspiration and ideas.

3 ways rural communities are keeping stores open

By Steph Larsen, former Center for Rural Affairs staff member, Nov. 10, 2009

In the small Nebraska town I now call home, a small grocery store anchors one end of Main Street. Once a farm-implement dealership, it has nine aisles, a dairy cooler, and a fresh meat counter. It employs nine full-time workers plus various high school students, and its limited hours frequently cause this workaholic to actually leave my office at a reasonable hour. (It closes on weekdays at 6 pm, 7 pm on Saturdays, and 2 pm on Sundays.) Although I grow a lot of my own produce — and I still have an “out-of-town” list for things like wasabi, coconut milk, and other exotic items I can’t live without — I do the majority of my shopping at my town’s grocery store.

Why? Because, as you understand if you live in a rural community, our grocery store is one of the most important businesses in town.

Our store means more than just ready access to food and toilet paper. Rural grocery stores are small businesses, providing jobs and generating tax revenue that support the community. Without a local store, the payroll and tax revenue that our food purchases generate go elsewhere. When you have to leave town to buy groceries, it’s easier to pick up hardware, fill prescriptions, and buy clothes at the same time. The loss of a grocery store affects other businesses in a town as well.

Having a grocery store also helps attract new residents to a town. Similar to a school, a post office, restaurants, and churches, a grocery store makes a community a more attractive place to live. Grocery stores can also be social places where you run into neighbors in the produce aisle, introduce yourself to someone new in town, or catch up on local happenings with the cashier.

Case in point: while shopping this Sunday, I finally asked Sally, a cashier, what the big blue-and-orange numbers in the window meant. “It’s the bankroll!” she said, and handed me a punch card. I am now entered in a weekly drawing for $600 worth of groceries, but to win I have to have visited the store that week to have my card punched. That’s one way to build loyalty, and I now feel less like a newcomer and more like a member of the community. I’m in on the secret.

Not all small towns are as lucky as we are. The lack of a grocery store means residents have less access to healthy fresh fruits and vegetables, and the elderly and others without reliable transportation will tend to buy their food at convenience stores with more limited selections or go for longer periods of time between visits to the store.

Small-town grocery stores do face some unique challenges owing to the size of the communities they serve and the amount of inventory they can carry. An increasing number of creative solutions are emerging to meet these challenges. The best examples begin within the community and help residents identify a solution that works for their particular locale. Here are ways that several rural communities are keeping the grocery store open in their town.

Local ownership:  When city leaders in Stapleton, Nebraska, found that 95 percent of respondents to a survey wanted a grocery store in town, a local resident stepped up to the challenge and with the help of two local investors, a new store was under way. Many rural grocery stores are already owned by local businesspeople who understand the importance of their store to the community. Communities that are losing a store owned by an outside investor or regional chain should look inward for someone from the community willing to operate the store.

Cooperative ownership: A half hour was too far to drive to buy groceries for residents of Walsh, Colorado, reports the Denver Post, so this town of 723 people decided to solve the problem themselves. Over 300 of them pooled their money to re-open the grocery store. A $160,000 interest-free loan helped restock the shelves, and they were in business. One secret to their success is community engagement – residents know that the success of this cooperative venture depends on residents spending their grocery money in Walsh, and the store can be more responsive to the needs of the community because its members are co-owners.

Youth affiliated: About 10 years ago, the Nebraska Sandhills community of Arthur, Nebraska, lost their grocery store. With residents forced to drive 40 miles for groceries and some elderly residents relying on neighbors for delivery, community leaders decided to act. They enlisted an extracurricular entrepreneurial business development program with high school students: eight students undertook market research, identified support, rented a building, and, by the end of the year, opened the Wolf Den grocery store. (The school mascot is a wolf.) The grocery store in this town of just 144 people remains open to this day.

There are times when I worry about not having access to organic produce, or that the grocery distributor will someday choose not to deliver to my town’s store and I’ll be forced to take my food dollars somewhere else. But for now, I choose to support my community by shopping locally.

Wish me luck on winning next week’s bankroll!

Community forms co-op to reopen grocery store

By Steph Larsen, former Center for Rural Affairs staff member, Sept. 10, 2008

A recent radio series on NPR called "Take me to your Leader" was, in the words of its producer, “an attempt to get away from the hype surrounding the political conventions in Denver and St. Paul, Minnesota—and to talk to people from Chicago to Phoenix about whom they see as their leaders.”

Last Friday, they had a great piece about Walsh, Colorado. You can listen to the segment here. Walsh has a population of 723 and the median household income was $24,911. This is a town remarkably similar to the Center's home of Lyons, Nebraska.

As I listened, the segment told the story about the town grocery store, and this is where I got really excited. In their own words:

About two years ago, the company that owned the store said they were closing down and moving out. For a time, that meant a half-hour drive out of town to shop. That's when the community took over. A group of residents came together to form a co-op and sold $50 shares around town, and the store reopened.

Rick Mills chairs the grocery store's board. He also owns the auto supply store on Main Street. The grocery store, he says, brought in more than $1 million in its first year and has been the engine of the little economy.

"Once the dollars leave, they don't come back," Mills says. "They're gone to the city and that's where they stay. People from the city aren't going to come to Walsh, Colorado, to do their grocery shopping — or any other shopping, as far as that goes."

This story really impressed me. The residents of Walsh faced the closing of a critical piece of their town’s infrastructure and the prospect of having to drive a half hour to buy food. For a lot of rural residents, especially those with low incomes and who lack reliable transportation, the closure of the grocery store could literally mean going hungry some of the time or having to make unhealthy food choices based on what is available. 

Not a lot of people would choose to move to a town without a grocery store if they had the choice of a different town that had one. Allowing the grocery store to remain closed would make the town less attractive to newcomers and perhaps continue the pattern of depopulation that many rural communities are facing. Instead of accepting that closure, Walsh residents figured out a way around it that benefited the community and kept a million dollars circulating in the local economy.

To me, this anecdote exemplifies the reserves of innovative and entrepreneurial energy that exists in rural communitiesit often just takes a challenge to bring it to the surface. It also highlights that success that comes with local input and involvement. Buying a share of the grocery co-op means that Walsh residents have a stake in whether the co-op is successful, and acts as an added incentive to shop locally.

Rural grocery stores are a vital part of the fabric of a community. Not only do they provide the healthy food that everyone needs, but they can fill other roles like economic driver, community builder, employer, and meeting place. Perhaps there are other voids that your local grocery store fills.

Resources

Rural Grocery Toolkit: This resource library or “tool kit” from Kansas State University is designed to provide resources to two primary audiences: those who are considering establishing a grocery store; and existing rural grocery store owners.

Rural Business Development Grants: This program is designed to provide technical assistance and training for small rural businesses. Small means that the business has fewer than 50 new workers and less than $1 million in gross revenue. Administered by the U.S. Department of Agriculture-Rural Development.

Rural Energy for America Program Renewable Energy Systems & Energy Efficiency Improvement Guaranteed Loans & Grants: The program provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. Administered by the U.S. Department of Agriculture-Rural Development.

Small Business Innovation and Research Grants: Funds startups and small businesses across technology areas and markets to stimulate technological innovation, meet Federal research and development needs, and increase commercialization to transition R&D into impact. Administered by the Small Business Administration.