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Rural Grocery Stores Are Disappearing, Initiatives in Place To Help

News | June 12th, 2023

By Laura Simmons

Photo credit: Lew Ableidinger

North Dakota’s Commerce Committee during the legislature’s 2019 to 2020 interim session studied the decline of rural grocery stores in North Dakota. Almost 3.5 yearslater, a Senate Bill 2273, which allocates $1 million to preserve rural grocery stores and increase food access, was signed into law April 24.

The number of rural grocery stores in North Dakota has been declining. North Dakota lost 15 percent of its rural grocery stores in towns with populations of fewer than 2,100 people between 2013 and 2019.

This trend is being driven by declining populations in the rural setting, distribution costs and competition from regional shopping centers, online sales and dollar stores, according to President of North Dakota Grocers Association John Dyste, who spoke at the interim commerce committee session.

“North Dakota is losing rural grocery stores at an alarming rate, causing consumers to travel greater distances to access healthy food choices such as fresh meat and produce,” Dyste said in his presentation to the Commerce Committee. “This especially affects the elderly and low-income members of these communities; they are in many cases left with few, if any, choices to purchase healthy foods.”

The interim legislative Commerce Committee session brainstormed strategies to help alleviate these problems. Ideas included collaborative purchasing and a spoke-hub distribution system.

Rural Access Distribution Cooperative, or RAD Co-op, implemented these ideas in Walsh County. Three grocery stores in Park River, Hoople and Edinburg order together through separate accounts from the same supplier. This supplier then drops off all the food at Jim’s Supervalu in Park River. RAD then transports Edinburg and Hoople’s food to the correct store. This format helps increase volume, which decreases price. It also helps keep smaller stores open after suppliers dropped the smaller roads, according to RAD President Alexander Bata.

“The community has supported us overwhelmingly,” Bata said. “I think that this is showing in the numbers. The stores are doing so much better because they're seeing that, ‘Hey, the stores are really trying. They're lowering their prices. They have a better variety, fresher produce. Let's do our shopping here.’”

Hoople Grocery saw a 23% increase in sales and Edinburg’s Market on Main saw a 16% increase in sales. Both these numbers do not account for inflation.

Jenna Gullickson, owner of Hoople Grocery, said RAD has been able to help her get product back into the store after Hoople Grocery was dropped by some suppliers. She said it's important to keep local groceries because once a town starts losing businesses, people start to leave.

“The more local things that you can have in your own community, I think it helps the communities really thrive,” Gullickson said. “Keeps these younger families here.”

Gullickson said customer feedback has been positive, with one mom saying she doesn’t have to leave town anymore because she can get all her produce at Hoople Grocery.

Diana Hahn, owner of Jim’s Supervalu, said she joined RAD to solidify her buying power because large wholesalers do not want to deliver to smaller accounts.

“The more products that I can bring on … then, the less chance I have of them saying, ‘You know what, you're just not buying enough. We're not going to stop anymore,’” Hahn said.

RAD also has a locker distribution system, with lockers in Fordville and Park River. Community members can place their grocery order online. They will then be alerted when the food is delivered to their locker and ready for pickup. This especially helps towns that do not have a local grocery store, such as Fordville.

Lori Capouch, the rural development director at North Dakota Association of Rural Electric Cooperatives (NDAREC), said many other North Dakota communities, like the Minot region, have expressed interest in replicating RAD.

She said access to food is important. For example, the U.S. The Department of Agriculture found that people who have to drive 10 miles or more to access healthy foods have greater rates of obesity and diabetes.

When a town loses a grocery store, property values go down, according to Capouch. “[Grocery stores are] one of those last pillars of your city that if you lose, your city will begin to decline,” Capouch said.

In 2014 there were about 137 grocery stores. Now that number is likely down to 87, according to Capouch.

Capouch said they are looking to replicate the RAD on a larger scale so each county will not have to do it themselves.

Senate Bill 2273 will provide up to $1 million to provide grants to preserve rural grocery stores beginning July 1, 2023.

One of the bill’s sponsors, Rep. Karla Rose Hanson District 44 Fargo Democrat, said RAD was a highly successful pilot program. She said it was good for communities, grocery store owners and the consumers.

“Grocery stores are foundational for every community,” Hanson said. “This grant really allows more rural communities in North Dakota to replicate the success that we've seen with the Walsh County project.”

The Department of Commerce is in charge of carrying out the bill.

A representative for the Department of Commerce said they’re excited for the project, but are still in the process of putting together a steering committee to develop guidelines.

The senate bill should be able to help grocery stores throughout North Dakota. Most grocery stores share a similar story: ordering enough so suppliers won’t drop them is difficult while their prices are generally high because they’re purchasing a low volume. Despite many grocery stores finding creative ways to increase revenue, few make a profit. A success story is a grocery store that doesn’t close.

A&S County Market and Community Peddler in Carson

Valeri Martinez manages Carson’s grocery store A&S Country Market and the Community Peddler thrift store.

When the current owner purchased A&S Country Market in 2009, the store had equipment failures, outstanding loans and was behind on finances. Then, businesses left town, harming revenue. Martinez said the bank wouldn’t offer help because they didn’t think the store could rebound.

Martinez, who has a background in consulting for small businesses, offered to help. She began managing the store in 2014.

“In 2017, we started the idea of putting together a thrift store to help pay for the things that we needed in the grocery store,” Martinez said.

With the thrift store opening in 2018 and a couple of businesses entering town, the grocery store was able to pay everything off. Now, Martinez is trying to use the thrift store to give back to the community that she said supported the store’s road to recovery.

“We don't make money like crazy, but whatever little bit that comes in, almost all of it is donated,” Martinez said.

Wimbledon Community Grocery & Cafe

Wimbledon Community Grocery & Cafe has been around for over 110 years, according to volunteer manager Linda Grotberg, The store became a nonprofit in 2016 after experiencing financial difficulties.

“Every time something closes or every time something moves out of a small town, there's a definite change in demographics and people who come in and out of the store,” Grotberg said.

As a nonprofit, the store is able to accept volunteers, grants and tax deductible donations. The store received $60,000 from an anonymous donor through the NDAREC and another grant through North Dakota Community Foundation's Greatest Need Fund. Grotberg said yearly donations usually average $5,000 to $10,000, but this year it was $14,000 after a campaign to raise money to install self-serve shopping.

“It's a changing world out there and we're really hoping that we can just keep going,” Grotberg said.

Tuttle Community Store

Tuttle Community Store, a community-owned store, faced the possibility of shutting down after Henry’s Foods said they’d no longer supply them because Tuttle Community Store wasn’t ordering enough, according to volunteer manager Doreen Holms.

Holms said she called 14 suppliers, but none of them would supply Tuttle Community Store.

On April 17, customer Jan Hetleved posted on Tuttle Community Store’s Facebook page requesting customers to call Henry's Foods and request they continue to supply Tuttle Community Store. On April 21, Holms posted on the Facebook page that Henry’s Foods would be taking the store back.

Holms said the store doesn’t make a profit because they only charge what they’re supposed to charge.

“So it does add up where you don't make any money,” Holms said. “You're just barely skimming. But it's a store. It’s there for the people and [the store is] not there to make a big profit. They're just there to supply the people with groceries.”

Strasburg Blue Room Bar and Kramer’s Grocer in Strasburg

Mitch Kramer, owner of Blue Room Bar and Kramer’s Grocer, bought the bar and restaurant in 2016. He said the bar and restaurant came with a large back room that was used for weddings and other gatherings. However, it wasn’t bringing in much revenue.

Kramer decided to turn the room into a grocery store. He put everything on wheels so that the room could still be used for weddings and other events. He said the grocery store helps him order enough food from suppliers for his restaurant.

“It's not making any extra right now,” Kramer said. “It helps me. It pays for the food I get and the labor and that's about it.”

Kramer said many in Strasburg drive an hour to Bismarck to shop at the big box stores because of the cheaper prices. But, he said it’s important to keep small businesses going because it supports the community when the roads are bad.

“If you don’t have businesses in your small towns the small town’s going to die away,” Kramer said.

Lori Capouch of NDAREC said rural towns are still important. “Sometimes, you don’t know what you have lost until it is gone.”

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