Rural Grocery Store Reports Outline Challenges

Lyons, NE- Two new reports from the Center for Rural Affairs (CFRA) highlight the importance of local grocery stores to rural communities, the challenges they face, and how communities can respond to those challenges.

In Rural Grocery Stores: Importance and Challenges, the CFRA outline the data showing the slow disappearance of the rural grocery and some of the reasons why. CFRA note that while there is not a national database tracking rural grocery store closings, there is data showing the trend toward disappearance of rural grocery stores in parts of the Midwest and Great Plains.

In Iowa, according to Iowa State University, the number of grocery stores with employees dropped from about 1400 stores in 1995 to just over700 in 2005. At the same time, “super center” stores like Wal-Mart and Target, increased by 175% . Also in Iowa, 43% of grocery stores in towns with populations under 1000 have closed.

In Kansas, according to Kansas State University, 82 grocery stores in communities under 2500 people have closed since 2007, and nearly one in five rural grocery stores have gone out of business since 2006. In total 38 percent of the grocery stores in Kansas town of less than 2500 closed between 2006 and 2009. The report provides several reasons why this is happening:

• Declining populations mean that many rural communities are without an adequate customer base to support a local store. In 2000, the average population needed to maintain a grocery store was 2,843. By 2005, that number had risen to 3,252.
• A lack of job opportunities in rural communities causes more rural residents to work in larger communities, thus increasing their shopping in those larger communities. Since 1990, the number of rural residents in communities over 2,500 out-commuting to larger communities for work has increased by 72%.
• The increase of corporate, chain store facilities in nearby cities and the ease of driving due to advances in vehicles and highways often make shopping at larger stores more attractive.
• The combination of work and shopping patterns among rural people is also shown in consumer preferences of how people choose their grocery store. A 2007 Nielsen Company study found that 60 percent of consumers choose a grocery store based on whether it “provides good value for the money”. Only 23% cited proximity to home as the most important factor.

The report notes that the lack of a grocery store places a community on a path for further depopulation and economic decline. In rural communities grocery stores are more than food retailers. They are economic drivers, community builders, employers and meeting places. Food “desert” is the term given to places where the residents are ten or more miles from a full-service grocery store.

The second report, Rural Grocery Stores: Ownership Models That Work for Rural Communities, offers solutions to the challenges discussed in the first report, and examines models of rural grocery store ownership.

There are four primary models of ownership for rural grocery stores: independent retailer, community owned, cooperative, and school-based.

While the independent retailer is the most common form, they are also the stores most in danger. The other three models- community owned, cooperative or school based, are dependent on the people involved, their commitment and experience, and most importantly, community support. (See box page 11 for more on school-based stores.)

For more information on the reports, contact Jon Bailey, CFRA, at jonb@cfra.org or 402-687-2103 Ext. 1013.
For the full reports go to:
Rural Grocery Stores: Importance and Challenges, October 2010--
http://files.cfra.org/pdf/rural-grocerystores.pdf
Rural Grocery Stores: Ownership Models That Work for Rural Communities
http://files.cfra.org/pdf/rural-groceryownership-models.pdf.

Reprinted w/permission & in part from Center For Rural Affairs Monthly e-newsletter, December 2010. See www.cfra.org