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Small towns struggle to keep, attract grocery stores

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MABEL, Minn. — Mary Bakke remembers when this town of 780 people had four grocery stores and a butcher shop. Today, there are none.

A local skin cream maker occupies the Main Street storefront that was home to the last holdout, Home Town Foods, which closed in 2012. Bakke and her neighbors drive seven, 10 or 20 miles for fresh produce, meat and staples.

A gas station on the highway sells milk and bread, which Bakke said is convenient but expensive.

“I think a lot of people just took it for granted when we had it,” Bakke said. “Now that we don’t, it makes a difference.”

The story is the same in small towns across the country: Plagued by declining populations, increasing mobility and fierce competition from big box retailers, rural grocers are closing shop. Store owners grow old, get sick or simply tire of trying to compete with Wal-Mart. Storefronts go dark, leaving residents with long drives for food and a hole in the center of their community.

Between 2005 and 2014, Wisconsin lost 34 grocery stores, according to Bureau of Labor Statistics data; Minnesota lost 112, most of which the Center for Rural Policy and Development estimates were in greater Minnesota.

The outlook is not much brighter.

According to a University of Minnesota Extension survey of grocers in communities of fewer than 2,500 people, the majority plan to get out of the business in the next decade, and many lack a transition plan.

Kathryn Draeger, the statewide director of the university’s Regional Sustainable Development Partnerships and principal researcher on the study said only about a third plan to leave the business to their offspring. She recounts one northern Minnesota grocer who told his children to just sell off the inventory and walk away.

In a 12-county area around La Crosse, there are more than 30 communities of at least 500 people without a regular grocery store, and 17 where the closest one is at least 10 miles away — as the crow flies.

“It’s not just Mabel,” said Mayor Jim Westby. “So many rural communities — everybody is in the same hurt.”

Food deserts

For some consumers, it’s an inconvenience.

“You really have to plan ahead,” said LeAnn Jevne. “There’s not the luxury of the last minute.”

But for elderly and low-income residents without access to a car, shopping can be a hardship when the local grocery closes. Limited access to grocery stores — whether the result of distance, transportation or a combination — makes it harder to maintain a healthy diet, according to the U.S. Department of Agriculture, which estimates more than 5 million rural Americans live in so-called “food deserts” at least 10 miles from the nearest supermarket.

There are about 33,000 such people in the 12-county area around La Crosse, according to data from the USDA’s Food Access Research Atlas.

Merrillan, Wis., lost its grocery store in 2012.

“It was very traumatic for a lot of people,” said village President Margaret Young. “We have a lot of senior people. It’s hard for them to travel and haul groceries.”

Merrillan, with a population of just 542, has been unsuccessful in attracting another grocer, and the storefront sits vacant kitty corner from the village hall on Main Street. Residents now drive 12 miles in one direction or 19 in the other to the closest grocery, or get what they can at the local gas station.

“A convenience store is convenient, but it’s not economical,” Young said. “This isn’t a rich area.”

Grocery stores don’t just offer fresh meat and produce. They are anchor businesses that bring traffic to neighboring stores.

“A grocery store is really important to kind of the heart and soul of a community,” Draeger said.

Young said Merrillan has three bars and one restaurant but little else.

“It used to be quite a thriving place,” she said. “When we lost the grocery that was a major thing.”

Mabel shopkeepers say there’s far less traffic since the store closed.

“Main Street’s dead,” said Tina Bakke, who runs BBG’s, one of the town’s two restaurants.

Jevne runs a flower and gift shop down the street.

“It’s a ripple effect,” she said. “It gets everybody.”

Grocers wanted

Up and down Main Street, the refrain is the same: “It doesn’t have to be fancy.”

The people of Mabel just want some kind of grocery store. Same in Merrillan. Coon Valley, Necedah, New Lisbon. The list goes on.

“Practically every rural community … a grocery store is normally at the top of the list if they don’t already have one,” said Cynthia Jaggi, who runs a Verona, Wis., based consulting business specializing in food and agriculture related development.

“Normally it is the cornerstone of the community … it’s kind of the community center.”

Mabel’s Economic Development Authority spent $50,000 to acquire five dilapidated storefronts across the street and had them razed to clear a spot for what city leaders hope will be a store selling some kind of groceries.

So far there haven’t been any takers.

“I think we’ve talked to every vendor out there as far as grocery stores,” the mayor said. “They want a population of 10,000 or at least 5,000. We just don’t meet that criteria of population.”

The problem is not Mabel itself: the city actually added 14 residents during the past 15 years, according to the Census Bureau, and residents note that houses are selling, thanks to a good school system and low cost of living.

“It’s rural America period. The population is declining,” Westby said. “There used to be a farm on every corner and had five or six kids. Now there’s one farmer with no kids… They’re all grown up and gone.”

The Juneau County community of Necedah has been trying for nearly 20 years to attract a grocer. Without a store since 1998, the village incorporated a store in its 2004 master plan. It conducted traffic and market studies, spent about $350,000 acquiring and clearing prime retail real estate and found a developer.

But shortly after breaking ground in November 2007, the stock market collapsed and lending rules changed. The developer’s financing fell through, and the village eventually bought the 14,800-square-foot shell at a sheriff’s sale.

Nearly a decade later the vacant shell sits wrapped in Tyvek.

Village Administrator Roger Herried is optimistic a buyer will come along, although he concedes it may not be a grocery store.

Attracting a grocery store is at the top of the list for small communities, but landing one is no small task. The feasibility studies alone can cost $30,000 to $40,000, although Jaggi said there are grants available.

Brad Hoiness is the co-owner of Rush Foods, which operates grocery stores in the southern Minnesota communities of Rushford, Preston and Harmony. He said population, proximity to larger cities and the strength of other local businesses like restaurants, pharmacies and hardware stores are all factors that help determine whether a rural grocery is feasible.

He cautions the initial investments in inventory and equipment — not to mention a building — are major hurdles.

Tight margins and big electric bills make it hard for small grocers to stay competitive, and rural grocers also struggle to find people with the skills to run the meat and produce departments that are often their hallmark.

“Getting the building built is the easy part,” said Greg Hansen, co-owner of Hansen’s IGA, which operates seven stores in western Wisconsin. “The lift is having the staff to work in the building to make it happen…. You have to have the right people.… If you don’t have a grocery store, you don’t have the experience.”

Predicting customer behavior is also a challenge. Communities say they want a local grocery, but today’s population is far more mobile, often working in nearby cities where cheaper options abound.

“Everybody says they want a grocery,” said Steve Peterson, Monroe County’s economic development coordinator. “But buying patterns are hard to change.”

Modern alternatives

For Gays Mills, Wis., it took a natural disaster and creative thinking to save the local grocery.

In 2008, after two 500-year floods in less than a year, the Crawford County village of 491 people received state and federal funding to help move dozens of homes and businesses to higher ground.

Grocer Steve Mickelson said he considered closing the Main Street store he’d owned since 1991.

“It was still a profitable business,” he said. “But to put money back into it, we never would have never recouped it.”

Instead, he partnered with two convenience store owners to create The Marketplace, a 7,000-square-foot grocery store and gas station that anchors the village’s new commercial district.

“The thinking is all three of them were kind of languishing,” said Julia Henley, who oversaw the relocation effort. “If all three had remained on their own they all would have closed.”

The new store is thriving, thanks to a combination of synergy and expanded meat, produce and deli offerings.

“We’re kind of the hub of the community,” Mickelson said. “It’s worked out well for the community. After a couple of floods we were really considering closing. I don’t think they would have ever had a grocery store again.”

Industry experts say hybrid models like The Marketplace may be the best hope for some small communities that can’t attract a traditional 6,000-square-foot supermarket. Groceries have also been successfully combined with coffee shops, community centers or other multipurpose spaces.

Cooperatives, community-owned stores, buyers clubs and farmers markets can also provide food access where a store may not work.

In other communities, convenience stores are becoming the defacto grocery.

Long known for its bananas, Kwik Trip has been aggressively expanding its selection of fresh fruits and vegetables and recently began stocking meat at its convenience stores in Wisconsin, Minnesota and Iowa. Its newer stores — with footprints of about 7,000 square feet — carry an aisle of general grocery basics.

The company’s bakery pumps out 60,000 loaves a day, and its dairy processes 800,000 pounds of milk each day. Next month it will introduce its own line of organic milk and eggs.

“We like to think of ourselves as a small community grocery store,” said Carl Rick, director of marketing for the La Crosse-based chain.

Rick concedes the prices are still higher, though he said the company is working to bring them down.

Recognizing they are unlikely to land a full-size supermarket, Mabel’s leaders are hoping Kwik Trip might build a store on the vacant Main Street lots.

“I still firmly believe at some point we will have a grocery store, but it won’t be what it was,” said Sherry Hines, the community’s business development specialist. “We’re still at it, and we’re not giving up.”

“It’s not just Mabel. So many rural communities — everybody is in the same hurt.” Jim Westby, mayor of Mabel, Minn.

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Reporter

Rhymes with Lubbock. La Crosse Tribune reporter and data geek. Covers energy, transportation and the environment, among other things.

(7) comments

aceman

Mack where has that happened? I drive all over in small towns and if it isn't Kwik Trip it is an independent.

Clarification

A few miles away, a local owner in Spring Grove invested a LOT of money into a new store, with better than the mediocre selection found in most rural places. It's tough with a KT beating him on eggs, chicken, ground beef, potatoes, onions and bananas.

chucker

Its the towns folks own fault , as heard way to many saying ,OH I'm not paying extra .10 cents to shop local !! so they dug there own grave !!

easy

Quote article:
“It’s rural America period. The population is declining,” Westby said. “There used to be a farm on every corner and had five or six kids. Now there’s one farmer with no kids… They’re all grown up and gone.”
* * *
Yes, they're gone, and why? In this internet age, it's a shame that so many, it seems everyone, wants to get to some bigger city, which just keeps pushing costs up.

My last couple years, I worked out of my home, setting up my company laptop and company phone on my kitchen table at 7:00 AM, and going to work. Not everyone can do that, but for those who can, what a boon. Everyone saves -- the company does not have to provide an office, I don't have to commute, many other expenses saved on both sides, and many conveniences too.

Cities are so expensive compared to the small towns, it seems a waste for companies to not seek more advantage from smaller communities.

Of course, there is the problem of not enough employees with the right skills in the rural areas, and there we are full circle.

Snow Cougar Mary Burke

Why worry? At the rate Kwik-Trip is expanding, they will have a store in all these communities eventually.

Mack

Kwik Trip closes their stores in small towns after they have eliminated the competition and then trains them to drive to get their gas.

Mack

Too many people in small towns would rather drive 30 miles, waste half a day or more, waste a quarter tank of gas and face La Crosse's terribly rough roads than shop locally.

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