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Thread: USA Today article: Small towns try to save vital grocery stores

  1. #1
    Cyburbian Plus
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    USA Today article: Small towns try to save vital grocery stores

    http://www.usatoday.com/news/nation/...wns-hurt_n.htm

    "Small groceries are part of the critical infrastructure of rural communities," along with post offices and schools, he says. "When one of those goes, it really does begin to have a domino effect."
    Has anybody experience/witness this happening ?

    Just conversely bring a grocery store back into a town ?
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    Cyburbian mike gurnee's avatar
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    The Dillons/Kroger/Kwik Shop operation developed a convenience store-small grocery combination in Greensburg. It is a prototype for how small town groceries can survive.

  3. #3
    Cyburbian Cardinal's avatar
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    I have worked with a few communities on this issue. In most rural places, efforts to find a chain willing to open a store are futile. Independent grocers are mixed. They have to be good at knowing the market and reaching out to cature the market potential in the face of chain and superstore competition in other communities. We sometimes see a local person step up because they are civic minded or just think there is an opportunity, but without much experience in the grocery business, they fail within a few years.

    One effective strategy is alluded to in the article. It is sometimes possible to get a local gas/convenience store to add a larger food selection. In small markets where a full grocery cannot be supported, this is often the best option.
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    Cyburbian DetroitPlanner's avatar
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    Here are my observations. Note that I am not a small town planner, but I spend quite a bit of time in smaller sized cities.

    1. Family Dollar or Dollar General can often thrive in these areas. These stores do sell groceries, but they do not carry fresh produce or meat. Another issue is that these places typically are developed on the periphery of the town where the laws are a bit more lax. If the goal is to keep these with in walking distance of homes these are typically set apart. The town also gets no tax revenue as the development is in the township typically.

    2. I have seen instances where gas stations have picked up much of the slack. A few years ago the grocery store in this hamlet burned to the ground and was not replaced. In St Helen Michigan there is a Marathon with a large grocery that includes produce. The town also has a newer gas station with approximately 10,000 sq ft of groceries. This is big enough to have a real meat department, groceries, produce. It is named Louie's Fresh Market and is affiliated with IGA.
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  5. #5
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    Interesting article!

    Last summer I spent some time in Marathon, NY, a town of around 2,000 people. They had a single grocery store, and are a fair ways from any larger towns. Cortland or Binghamton are your largest cities nearby, and each are around a half hour away.

    The grocery store is called Greggs. Pretty neat place. One of the things they had going for them was they were also the only gas station in town.

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    Cyburbian Linda_D's avatar
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    In Chautauqua and Cattaraugus Counties in WNY, there's mix of local chains and independents.

    Earlier this year, a lot of communities in this area were concerned because a local chain that operated a lot of small supermarkets in small towns went bankrupt. Luckily, another local chain, Tops, bought up their stores, remodelled them, and made them regional schopping centers.

    Most of the independents sell a combination grocery/gas station/sporting goods/pizza-sub-wings/sporting goods/video rentals etc. depending upon the operator's preferences and customer demand.

    One of the differences I've noticed between my area of NYS and neighboring PA (10 miles away) is that there are virtually no grocery stores in the small towns. At best, the local KwikFill gas station functions as a convenience store, selling milk and bread and maybe packaged cold cuts. Otherwise, it's a 10/15 plus mile drive one way into Warren, PA, or Jamestown, NY just for milk.

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    Cyburbian hilldweller's avatar
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    Surprised no one has mentioned food co-ops. To hell with the corporations man!

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    Cyburbian
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    I'm wondering if anyone has come across research/market data regarding typical population to sustain a small grocery in a small-town setting? Although I support community development, it seems we sometimes strive too hard to do the impossible, due perhaps to our pro-rural orientation in the U.S.?

    I know this is a complex question - for example, does the area receive pass-thru traffic that increases the purchasing power in the location? Is it a resort or seasonal destination. Etc. On the flipside, is the community close enough to a larger town, or have enough commuters, that there is significant leakage (people tend to shop out of town for their weekly/monthly stocking up and only make convenience buys in town?) In my experience with small towns (my parents live in one), many people will also pass up the local store simply b/c they do not find the variety, freshness and quality they want - this may be different in a rich ag area, of course ...

    Here in Colorado, I am struck by the low population densities outside of town - whether it be in the mountains or the plains, the terrain and/or lack of water mean we don't have the distributed rural population that one sees in greener climes like upstate NY. So a town of 5,000 - 10,000 may not have much hinterland to draw from.

    Re: co-ops, I know there are a couple of rural WY communities that have successfully started co-op mercantile stores, but I don't believe these sell any food.

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    Cyburbian mike gurnee's avatar
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    I have read newspaper articles about grocery co-ops, some in Kansas. No links: I just remember reading them.

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    Cyburbian Linda_D's avatar
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    Quote Originally posted by docwatson View post
    I'm wondering if anyone has come across research/market data regarding typical population to sustain a small grocery in a small-town setting? Although I support community development, it seems we sometimes strive too hard to do the impossible, due perhaps to our pro-rural orientation in the U.S.?

    I know this is a complex question - for example, does the area receive pass-thru traffic that increases the purchasing power in the location? Is it a resort or seasonal destination. Etc. On the flipside, is the community close enough to a larger town, or have enough commuters, that there is significant leakage (people tend to shop out of town for their weekly/monthly stocking up and only make convenience buys in town?) In my experience with small towns (my parents live in one), many people will also pass up the local store simply b/c they do not find the variety, freshness and quality they want - this may be different in a rich ag area, of course ...

    Here in Colorado, I am struck by the low population densities outside of town - whether it be in the mountains or the plains, the terrain and/or lack of water mean we don't have the distributed rural population that one sees in greener climes like upstate NY. So a town of 5,000 - 10,000 may not have much hinterland to draw from.

    Re: co-ops, I know there are a couple of rural WY communities that have successfully started co-op mercantile stores, but I don't believe these sell any food.
    I think that you are very correct about outlying density. I live in sw NY which is very rural but the population density of my county is about 130 per sq mile. Neighboring Cattaraugus County is about 80 per sq mile, both low for NYS but not compared to many other areas, including nearby Warren County in NW Pennsylvania. Even small towns with only about 1000 people can support small grocery stores if they are at a good distance (15/20 miles) from small cities or suburban sprawl and the outlying rural areas have enough density.

  11. #11
    Cyburbian Cardinal's avatar
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    A very generalized rule of thumb is that you want a population of 20,000 in the trade area to support a grocery store. In rural areas this is not one of your larger chains, but probably a local chain or independent. You are right to note all of the caveats concerning travel, competition, seasonality, etc.
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    Cyburbian DetroitPlanner's avatar
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    How does one factor in the increased transport costs from the last few years into this? If it cost $X to drive to SPRAWLMART which has gobbled up many of these smaller places and forced folks to add to thier transport costs in order to 'save money' then it seems to me that if someone could do the majority of thier shopping closer they would. The centralized grocery store business model does not work very well when the individual transport costs are taken into consideration. It may actually help may convienece stores who have to charge a few cents more per item, but are located a short distance from the population that it services.
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    Cyburbian Linda_D's avatar
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    Quote Originally posted by DetroitPlanner View post
    How does one factor in the increased transport costs from the last few years into this? If it cost $X to drive to SPRAWLMART which has gobbled up many of these smaller places and forced folks to add to thier transport costs in order to 'save money' then it seems to me that if someone could do the majority of thier shopping closer they would. The centralized grocery store business model does not work very well when the individual transport costs are taken into consideration. It may actually help may convienece stores who have to charge a few cents more per item, but are located a short distance from the population that it services.
    People in rural areas are used to driving longer distances than people living in cities, even small ones, and they have been shopping differently than people close to stores long before gas prices skyrocketed in recent years. I grew up on a farm 4 miles from the village. My mother shopped with a list once a week, and she didn't run back to town if she forgot something. Maybe my dad would pick it up on his way home from work or maybe a neighbor would get it -- or we "made do" until the next shopping day.

    People shop more frequently than that now, but that's primarily because most rural people today work in town. If they live in a little place without a grocery store -- Ellington or Conewango Valley or Napoli for example -- they tend to plan their trips to Jamestown or South Dayton or Randolph as carefully as my mom did 50 years ago.

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    Quote Originally posted by Linda_D View post
    People shop more frequently than that now, but that's primarily because most rural people today work in town. If they live in a little place without a grocery store -- Ellington or Conewango Valley or Napoli for example -- they tend to plan their trips to Jamestown or South Dayton or Randolph as carefully as my mom did 50 years ago.
    hehe. as opposed to city people like me, who buy our groceries once a day or at most once every two days from the market in the ground floor of their apartment buildings

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    Cyburbian
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    Grocery stores in general operate on very thin margins percentage-wise. As much as I generally encourage small towns to support local color in business formation, running a grocery store per se is not the place to encourage someone who is simply civic-minded and not experienced in the grocery business.

    Depending on the percentage of the population that actually work in larger towns and commute home to the small town at night, sometimes it's important for the small-town groceries to become mini-delis as well, offering a fair amount of prepared or semi-prepared food.

    But in any case, this isn't the place for amateurs. If a town doesn't meet the market test, it's simply going to have to do without a grocery store. As others say, sometimes the gas station or other small business can pick up some non-perishable grocery items to help fill the slack.

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    Cyburbian
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    Quote Originally posted by urban2rural View post
    Grocery stores in general operate on very thin margins percentage-wise.
    I watched a CNBC report on grocery stores last night, appears that the industry standard is around a 2% margin, but thats for the larger stores. Smaller local ones are lower, but not by much. Apparently Whole Foods margin is very high, cant remember the exact numbers but I believe it was close to 3.3%.

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    Most likely these areas will simply become food deserts. It's simply another stage in the process of decline of American communities, along with loss of major employers, housing abandonment, state and local budgets cut to the bone, etc.

    However, I believe the time is coming when communities of all shapes and sizes will realize the benefits of a local food infrastructure. The corporate takeover of farming and rising energy prices will insure that chain grocers either go out of business or will simply be forced to jack up the price of toxic processed foods trucked in from half way across the country.

    An increasing number of communities are turning to a range of alternatives such as community gardens, urban agriculture, farmer's markets, cooperative food processing, and cooperative grocery stores to fill the gap and meet local food needs.

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    Cyburbian Linda_D's avatar
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    Quote Originally posted by crummmountain View post
    Most likely these areas will simply become food deserts. It's simply another stage in the process of decline of American communities, along with loss of major employers, housing abandonment, state and local budgets cut to the bone, etc.

    However, I believe the time is coming when communities of all shapes and sizes will realize the benefits of a local food infrastructure. The corporate takeover of farming and rising energy prices will insure that chain grocers either go out of business or will simply be forced to jack up the price of toxic processed foods trucked in from half way across the country.

    An increasing number of communities are turning to a range of alternatives such as community gardens, urban agriculture, farmer's markets, cooperative food processing, and cooperative grocery stores to fill the gap and meet local food needs.
    To see a discussion of this topic elsewhere on this forum: Can your town feed itself?

    IMO, your "alternatives" are NOT feasible. Growing enough crops and livestock takes space, especially since abandoning modern technology, which you seem to be advocating, will signifcantly lower yields.

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    Quote Originally posted by DetroitPlanner View post
    1. Family Dollar or Dollar General can often thrive in these areas. These stores do sell groceries, but they do not carry fresh produce or meat. Another issue is that these places typically are developed on the periphery of the town where the laws are a bit more lax. If the goal is to keep these with in walking distance of homes these are typically set apart. The town also gets no tax revenue as the development is in the township typically.
    This is quite common in the South. In Arkansas and Tennessee, for example, it is not uncommon for a town of as few as 1,000 residents to have a Dollar General or Family Dollar store (with Dollar General being more common). Interestingly, Dollar General is testing a 'Dollar General Market' concept in a few towns in Tennessee; these stores are slightly larger than typical DG stores and include an expanded pantry and small meat and produce section. I've been in two of these stores and immediately thought that they would be great in smaller, more remote towns. (One of the prototypes I visited was in Nashville; the other was in Lebanon TN, a town of 20,000-plus just east of Nashville.)

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    Cyburbian Cardinal's avatar
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    Quote Originally posted by reimaginethis View post
    This is quite common in the South. In Arkansas and Tennessee, for example, it is not uncommon for a town of as few as 1,000 residents to have a Dollar General or Family Dollar store (with Dollar General being more common). Interestingly, Dollar General is testing a 'Dollar General Market' concept in a few towns in Tennessee; these stores are slightly larger than typical DG stores and include an expanded pantry and small meat and produce section. I've been in two of these stores and immediately thought that they would be great in smaller, more remote towns. (One of the prototypes I visited was in Nashville; the other was in Lebanon TN, a town of 20,000-plus just east of Nashville.)
    The variety store and drug store chains are both experimenting with carrying more food and a small assortment of fresh foods. Walmart is also getting in the game, whether it develops its own brand or purchases (speculation is that they may acquire RiteAid). These are all potential prospects for some small towns, though I doubt they will be found in the very small rural communities like the one in the article. Most of those places will simply have to do without their own grocery.
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    Cyburbia Administrator Dan's avatar
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    I'm curious about the retail mix in these small towns in general. In my travels throughout the country, I've seen many small towns that have an auto parts store, but no grocery. How is it that auto parts stores can survive in these small towns, but not groceries? Humans need to eat far more often than their vehicles need to be serviced.

    As Linda_D said, those living in rural areas typically plan their shopping trips well in advance. She's talking about upstate New York, where outside of North Country, a full-service grocery store may be a half hour away at the most. In the rural Midwest or West, it can be hours away. How many small town residents just go to the nearest full-service grocery store once a week, versus doing their everyday shopping at a closer but much smaller IGA or independent store?

    Also, these tiny rural groceries usually have very limited selections, If someone wanted to buy a six-pack of even Sam Adams Lager, they're out of luck if the IGA just has Bud, Coors Light and Natty Ice. Frozen pizza besides Totino? Ground beef leaner than 80%? Fragrance-free laundry detergent? What if a mother is on WIC, but the short list of items on the authorized food list can't be found locally? No Juicy Juice? It's not like rural residents are looking for esoteric specialty items, but I think that like their big city cousins, they also want more than just the basics. Is there anything being done on the side of the grocer industry to address this?
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    Cyburbian Luca's avatar
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    In Britain and Italy, with high quality roads and almsot universal auto ownership in rural areas, local stores in small villages are largely disappearing despite mixed planning attitudes towards out-of-town stores.

    That said, I'm talking really small hamlets. It would be unthinkable for a town of 5-6K people not to have several food retailers. As for price, my impression is that once you adjust for quality, food is not as cheap as first appears in the US.

    The suggestion that multi-purpose (general?) stores might eb the answer (includign gas, etc.) sounds eminently reasonable.
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    Cyburbian Linda_D's avatar
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    Quote Originally posted by Luca View post
    In Britain and Italy, with high quality roads and almsot universal auto ownership in rural areas, local stores in small villages are largely disappearing despite mixed planning attitudes towards out-of-town stores.

    That said, I'm talking really small hamlets. It would be unthinkable for a town of 5-6K people not to have several food retailers. As for price, my impression is that once you adjust for quality, food is not as cheap as first appears in the US.

    The suggestion that multi-purpose (general?) stores might eb the answer (includign gas, etc.) sounds eminently reasonable.
    I think the distances between villages is much smaller in the UK and Italy than it is many parts of North America, especially in the Great Plains and Rocky Mountain areas. As Dan pointed out, Westerners in the US frequently have to travel hours to get to full service grocery stores (or any other services), and that's not because they don't have cars or drive unpaved roads. It's hard to fathom the vast emptiness of some parts of the US and Canada unless/until you actually see it. There are parts of Wyoming or Nevada where you can drive for a 100 miles without seeing another car or passing a house/ranch.

  24. #24
    Cyburbian
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    Quote Originally posted by Dan View post
    How is it that auto parts stores can survive in these small towns, but not groceries? Humans need to eat far more often than their vehicles need to be serviced.
    Maybe because as a rule, Americans will strip their food and utility budgets to nothing before they will even consider taking one of their cars offline? When people have a choice between putting gas in their tank or putting food in their childrens' stomach, they generally fill up the car and let the kids starve.

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    Cyburbian DetroitPlanner's avatar
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    Quote Originally posted by JusticeZero View post
    Maybe because as a rule, Americans will strip their food and utility budgets to nothing before they will even consider taking one of their cars offline? When people have a choice between putting gas in their tank or putting food in their childrens' stomach, they generally fill up the car and let the kids starve.
    I would have thought it has a lot more to do with the margin earned on items selling auto parts is much higher than the margins on food. This is part of the reason why you have soo many markets that keep on increasing value added space at the expense of regular grocery items. I am sure that grocers earn more on deli counters, flower shops, bakeries, than on Duncan Hines or Kraft. Small towns can't keep the fancy departments in business. Not enough sales to warrant them.
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