Grocery store finding it hard to compete with big box discount stores
The grocery industry and government don’t keep statistics on rural store closures, but experts said a long-running trend seems to be picking up speed. A survey by Kansas State University backed up that belief, finding that more than 38 percent of the 213 groceries in Kansas towns of less than 2,500 closed between 2006 and 2009.
Craig Chancellor tried everything he could, but last November he finally closed the Turkey General Store, leaving the small Texas Panhandle town without a grocery.
Although Chancellor tried to trim overhead and relocated a small cafe he owned into the store, he couldn’t make it work. He paid more for salaries and utilities than he made in sales, and finally, lost more than he could afford.
“It didn’t play the way we wanted it to,” the 48-year-old Chancellor said. “People understand why we had to do it, but they hate it.”
Researchers said Chancellor’s story is being repeated across the country as rural stores struggle to survive amid competition from distant supercenters and relatively high operating costs. The grocery industry and government don’t keep statistics on rural store closures, but experts said a long-running trend seems to be picking up speed. A survey by Kansas State University backed up that belief, finding that more than 38 percent of the 213 groceries in Kansas towns of less than 2,500 closed between 2006 and 2009.
It isn’t just a store that goes when groceries close, said David Proctor, who studies rural communities at Kansas State. Such closures rob towns of their vitality, with the loss of gathering places and sales tax revenue to fund local governments.
Once such businesses begin closing, small communities can find themselves in downward spirals, said Kathie Starkweather of the Lyon, Neb.-based Center for Rural Affairs.
“If you start to lose something key like a grocery store, people aren’t likely to move there if they don’t have access to food,” she said.
But Lois Wright Morton, who studies rural communities at Iowa State University, said one reason local markets fail is because residents often prefer to drive to bigger cities with a Walmart, Target or other large store. Shoppers are attracted by generally lower prices and larger inventories.
Another problem for rural grocers, Chancellor said, is that they don’t have the economies of scale that bigger stores have and they often can’t get food distributors to deliver relatively small orders. He said he couldn’t get anyone to deliver bread, so he had to either meet a distributor in a nearby town or buy bread at Sam’s Club in Lubbock or Amarillo — the two largest cities in West Texas.
Closures of stores such as his, though, can be particularly hard for elderly and other people who can’t drive long distances to big markets.
The 640-some residents of Minneola, Kan. now have to drive about 40 miles roundtrip for food since its store closed. The town’s mayor, Carol Sibley, shops for three relatives in their 90s and watches with worry as some elderly residents shuffle across a busy highway to pick up provisions at the only remaining food seller — a gas station convenience store.
“They are just trying to survive and go after groceries,” said Sibley whose town boasts of amenities such as a hospital, a nursing home, a bank, a newspaper and a pharmacy.
The U.S. Department of Agriculture calls areas with little access to affordable and nutritious groceries “food deserts.”
Thirteen percent of the nation’s more than 3,100 counties qualified as food deserts 10 years ago, with most of them in a band of rural areas stretching from Montana to North Dakota and then south to West Texas, according to a 2007 study done by Morton and Troy Blanchard, a Louisiana State University sociology professor.
Farmers markets can help, but crops grown in those communities are often commodities like cotton, not fruits and vegetables, Proctor said.
The federal government is trying to ease the situation with the Healthy Food Financing Initiative. The departments of Treasury, Agriculture and Health and Human Services have proposed spending $400 million a year to bring grocery stores and other healthy food retailers to underserved urban and rural communities to eliminate food deserts within seven years. It isn’t clear yet how the money will be split between urban and rural areas.
Nonprofit groups and motivated residents also have stepped in to help.
In Cody, Neb., a town of 132 where the grocery store closed 10 years ago, community leaders got a $75,000 federal grant last fall to buy equipment and train high school students who will run a grocery as a nonprofit. One quarter of the population is over 65 and half the school district’s kids are on free or reduced lunch.
Once it opens, the town’s elderly and poor will have easier access to healthier foods. Now, it’s 35 miles to the nearest town with a grocery store.
“For them to be able to make that kind of round-trip drive for groceries and having reliable transportation is difficult at best,” Starkweather said. “And you throw in a few Nebraska winters and it gets more difficult.”
In Ohatchee, Ala., a $99,000 USDA grant helped the town of about 1,200 refurbish and reopen its grocery store, which closed a few years ago. But the mayor said residents must support it if they want the store to remain open.
“We really need our grocery here. It was a main revenue stream,” Ohatchee Mayor Stephen Baswell said. “If we lose this store this time because we don’t have enough business to keep it open, we’ll never get another one.”
The roughly 1,700 residents of Bement, Ill., shopped in neighboring towns for about a year after their grocery closed. But a local couple who received a low-cost federal loan started construction on a new store to open this fall.
“People in this community understand that if they don’t shop locally, there’s a really good chance that we’re going to lose some of the businesses we’ve got,” said Tabitha Elder, president of the local chamber of commerce. “It’s so much more convenient to be able to run a couple of blocks down as opposed to going to another town.”
In Turkey, Chancellor said he might apply for a grant to reopen his store. The money would allow him to buy energy-efficient equipment to reduce the utility bills. He also said he gets encouragement from residents, who have tired of the 45-mile drive to the nearest Walmart or 12-mile drive to the closest market, and believes the closing has made them realize the importance of a town grocery.
“It’s like everything else,” he said, “you don’t appreciate it until it’s not there anymore.”