What it Takes to Keep Independent Grocery Stores Open in Rural Communities | Civil Eats

What it Takes to Keep Independent Grocery Stores Open in Rural Communities

When rural grocery stores shutter, communities lose more than their only source of food. We visited two small groceries in North Dakota that have found innovative ways to keep the lights on.

Laurel Jones and Larry Crowder outside the Bowdon Community Grocery.

At 75, Linda Grotberg is more than ready to retire. Instead, however, the mother of 11 and grandmother of 40 manages a small grocery store in her hometown of Wimbledon, North Dakota.

Some days, she works the register and oversees the restocking of the small store. On others, she drives 30 miles to Jamestown, a nearby city of 15,000, in order to stock up on items at the Walmart Supercenter, where retail prices on some things are actually lower than the wholesale price the grocery gets.

Grotberg does all this so that her neighbors don’t have to make the drive out of town to buy groceries. And because the Wimbledon Community Grocery offers a slice of community in an area on the verge of losing its identity.

“I’ve been in the community 56 years,” Grotberg says, “and I’ve shopped at this grocery store for 56 years.”

With just 199 people, Wimbledon sits along a stretch of railroad that is now only used for moving cargo. And, as with independent businesses all over rural America, the store’s future remains uncertain.

Linda Grotberg works the register at Wimbledon Community Grocery

Linda Grotberg works the register at Wimbledon Community Grocery

Twenty-four percent of North Dakotans work in agriculture, and yet as farming has become more mechanized, it has required fewer people. Since 2007, the average farm size in the state has gone up by over 20 percent, meaning more land for fewer farmers. As a result, North Dakota’s rural areas have experienced an exodus in recent decades and its grocery stores have been heavily impacted.

“Populations are going, and there are less job opportunities in those places,” says Lori Capouch of the North Dakota Rural Grocery Initiative.

Wimbledon, and other towns where grocery stores are managing to survive, have come up with innovative ways to keep themselves afloat, relying on organizational restructuring, alternative revenue sources, and lots of volunteers. And the people behind them, like Grotberg, lose sleep over whether it will be enough to keep their doors open and their shelves stocked.

A Community Comes Together

In 2008, Judy and Mike Schlecht, the owners of the Wimbledon Community Grocery, wanted to sell.

They couldn’t find any buyers, but the residents of the town didn’t want to lose their only grocery store. So some of them came together and formed a corporation, which sold shares of the store at $100 each, and raised enough to stay open.

Around this time, Wimbledon experienced some losses. In 2013, the town’s school consolidated with another school 10 miles away. Then two years later, the local John Deere store closed down. That’s when the grocery really began to struggle. People now had to drive out of town to get their tractor parts; once they were in these places, they did their grocery shopping there as well.

“Even the people who were loyal to us, they couldn’t make two trips,” recalls Grotberg. “It was really scary for that first year or two; we could just see it falling off.”

In the meantime, the coolers and freezers were breaking down. So the store decided to restructure as a nonprofit in order to begin applying for government grants and accepting charitable donations.

The change paid off, mostly. What matters is the Wimbledon Community Grocery is still open for business six days a week. On top of a range of shelf-stable basics, the store carries locally made baked goods and some local produce, like potatoes and onions. It takes SNAP, allows local customers to run a tab, and stays open till 7 p.m. on weeknights so shoppers can stop in after work. The store employs three part-time workers and is also home to a small café that serves breakfast and lunch.

The aisles of Wimbledon Community Grocery

The aisles of Wimbledon Community Grocery

Walking through the door, you’ll pass the cooler filled with ice cream, one of the few things that’s always sure to sell at the store, because people can’t pick it up from Jamestown. “It melts on the drive home,” Grotberg says.

Discovering the Problem

In 2014, Lori Capouch received a phone call from the owner of a small grocery store asking about grant money to cover operating shortfalls. Capouch is the rural development director at the North Dakota Association of Rural Electric Cooperatives (NDREC), and she assumed the call—which had nothing to do with electricity—was a one-off. But soon more calls started coming in and she and others in the cooperative realized they needed to respond. In 2016, they launched the North Dakota Rural Grocery Initiative.

What’s happening in North Dakota isn’t unique. In recent years, independent grocery stores have been closing all across the United States. In 2007, the Center for Engagement and Community Development at Kansas State University started its Rural Grocery Initiative in response to the dwindling number of stores in that state. The group’s first step was to get a small grant from the U.S. Department of Agriculture to survey all grocery store owners in towns of 2,500 or fewer.

Six years later, when Capouch wanted to understand the extent of the problem in North Dakota, she used the same survey template. By that point there were 137 stores left operating in communities of 2,100 or fewer people. Now, that number has dropped to 96, or around 35 percent. Some have closed, while others are no longer classified as full-service.

Grocery retail is a tough business. Profit margins for small stores are razor thin. While the average U.S. grocery store makes around $320,000 a week, Capouch says North Dakota’s rural grocery stores bring in on average just $20,000, and more than 50 percent have an annual net profit margin of $18,000 or less. One busted freezer can send them into a financial tailspin.

Walmart and other national chains can afford to offer groceries alongside household items, and because they order huge volumes of inventory, can offer lower prices than smaller stores. A 2007 study found that based on scanner data, Walmart prices for the same products are on average 15-25 percent lower than the nationwide average.

In addition, the proliferation of dollar stores has done a lot to destabilize the local grocery industry. Over 10,000 dollar stores have opened around the country in less than a decade. Dollar General alone opens three stores a day, and will open an estimated 1,000 in 2020. They come into communities, open up near an existing grocery store, beat the store’s prices, and eventually drive them out of business. And while they sell some shelf-stable foods, dollar stores don’t carry fresh fruit and vegetables, meaning that once they drive a grocery store out of business, the town is left without access to produce.

Exterior of Wimbledon Community Grocery

The exterior of Wimbledon Community Grocery

In North Dakota however, Capouch says that they don’t yet know what the impacts of dollar stores will be. She adds that so far only one rural grocery that has closed, in Lakota, a town where a Dollar General moved in. In some small towns with nothing in between, it’s not necessarily worth it for a dollar store to move in. Walmarts present less of a threat, Capouch says, because very few of the state’s towns are large enough to land one. North Dakota is a very sparsely populated state, and over 80 percent of towns have 1,000 or fewer people.

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Piecing it Together

Like Wimbledon, Bowdon is a small community (135 people in the town proper) with very few independent businesses, and no remaining local school. Turning right into town off of ND 200 West, the one-story red building with a white roof housing the Bowdon Community Grocery is easy to miss. But residents rely on it for selling local meat, milk, and other staples.

In 2008, when the owner of the grocery passed away suddenly, no one came forward to take over the store. Members of the town formed a cooperative to purchase and run it. But keeping it open remains a struggle.

“Our population has been stable, but we’re losing the older people and they were the most loyal customers,” says Laurel Jones, the treasurer of the Bowdon Community Grocery’s board of directors and a loyal customer of the store. “Many of the younger people think nothing of driving 100 miles to Bismarck two to three times a week,” she added.

The aisles of Bowdon Community Grocery

The aisles of Bowdon Community Grocery

Younger people are less likely to shop at their local stores, often favoring online grocers—when they’re available—or bigger stores further away. In 2016, private market research firm Mintel found 52 percent of Millennials find “specialty” grocery stores such as Whole Foods and Trader Joe’s more appealing than traditional ones.

And yet while the sticker prices on some foods might be lower at large corporate chain stores, David Proctor, the director of Kansas State University’s Center for Engagement and Community Development, warns that these prices don’t take into account the economic and social value a grocery store brings to a community.

“Maybe you go to Walmart or Dollar General and you save some money there. But at the same time, your grocery store closes, and what research has shown is grocery stores are barometers for business in town. So if the grocery closes and then another store closes and you happen to own a house in town, your property value has declined significantly,” he says. “So instead of losing a quarter on a box of cereal, you’re losing thousands of dollars.”

In order to help keep the lights on, the food coming, and the refrigerators running in Bowdon, the board opened a thrift store in 2010 for the express purpose of supporting the grocery store. Located in the now-defunct school, it is staffed by volunteers and last year provided the grocery store with $5,000 in added funds. The grocery store also holds fundraising events and receives private donations.

“There are a few people who really want to keep [the store around],” says Larry Crowder, who is president of the cooperative board and married to the pastor of the town’s Lutheran church. “People will throw in $100 even if they don’t shop here.”

Food Security

In some rural areas, losing a grocery store literally means losing access to fresh and healthy food.

When bringing attention to this problem, Karen Ehrens, a dietician and coordinator for the Creating a Hunger Free North Dakota Coalition, asks people to visualize the nearest soda machine.

“People usually can,” she says. But when she asks them to visualize the closest apple, it’s not as easy, she says. “It’s like other people are deciding what food is being sold here and not us.”

Lack of fresh produce is closely linked to a variety of health problems. A 2017 global study published in The Lancet showed that 11 million deaths in 2017 were caused in some part due to diets that lacked whole grains and fresh fruits and vegetables and instead included too much sodium, sugar, and red and processed meats. A dearth of healthful food has also been shown to have negative cognitive impacts.

In North Dakota, a study of over 500 food bank customers found that 75 percent had at least one chronic health disease, 36 percent had high blood pressure, and 32 percent suffered from depression or some other mental illness. While the grocery environment is only one factor, it’s becoming clear that the inability to access food due to location, poverty, or a combination of the two, can have real health impacts.

Fourteen bananas for sale at Tuttle Community Store.

Fourteen bananas for sale at Tuttle Community Store.

Ehrens is working with groups across the state to address the problem, and she’s very concerned by the shifting food landscape in states like hers. “It’s fairly alarming to me that places where people can access food are going away,” says Ehrens.

And while driving upwards of an hour to buy groceries might be a minor annoyance for some, it’s simply not possible for everyone. Seniors, people with chronic health conditions, and low-income folks often struggle to find reliable transportation.

Covering the Same Ground Twice

It’s not just people who have trouble getting to food; food also faces barriers getting to people. With such a low population density, it’s not always economically attractive for distributors to go to certain parts of North Dakota. On the other hand, due to a lack of communication and collaboration, sometimes different vendors cover the same ground multiple times. This is both economically and environmentally inefficient, and something Capouch is very focused on changing.

“We have four different trucks sometimes driving down the same highway,” she says. But Capouch hopes to streamline the distribution. “It would make more sense to collect it in one spot and have one truck drive all those products. Save our roads, save our environment.” It would also help stores lower their purchasing costs by setting up distribution centers where stores from a few nearby towns could all pick up their products. This would allow the stores to order together, helping them get lower prices from distributors for purchasing larger quantities, the way Walmart and Sam’s Club do, and could save them up to 20 percent collectively.

Capouch and the North Dakota Rural Grocery Initiative have begun a pilot project with funding from CoBank, a national cooperative bank, to explore setting up collaboration between communities with a population under 2,100 in five counties. The volume purchased in that entire five county area plus the nearby Spirit Lake reservation, which is home to 2,000 members of the tribe’s 7,000 enrollees and experiences high levels of food insecurity, was equal to that of one-and-a-half average U.S. grocery stores. However, this volume is currently split up between six distributors doing multiple routes each week.

The North Dakota Rural Grocery Initiative is hoping to help stores and businesses in those towns order together and organize a distribution hub. One town, which does not have a grocery store, is interested in setting up a food locker. Capouch is also hoping to team up with the U.S. Postal Service to take groceries from the distribution hub on the final leg of their journey to the store, since the mail has to go to these small towns every day anyway. She is also looking into partnering with state-operated transportation systems, such as the Emergency Preparedness and Response Section of the North Dakota Department of Health, for streamlined distribution.

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Currently, North Dakota only has one food hub, which is located in Anamoose, a town of just over 200. It was started by Julia and Mirek Petrovic, a couple from Russia and the Czech Republic, respectively. They moved from New Jersey and found land to farm in Anamoose after a long road trip. However, after realizing how difficult it was to sell what they grew at small farmers’ markets, they decided to apply for a grant to turn a condemned building into a food hub and café, which opened in spring of 2018.

Local farmers can now bring their produce to the hub, where it is transported all together to different markets, including the BisMan Community Food Coop in Bismarck and the Warehouse Grocery in Harvey, a town of around 1,800, making it part of the North Dakota Rural Grocery Initiative’s purview as a town of under 2,100 . It’s an efficient distribution model that Capouch would like to see more of.

North Dakota state’s legislature also passed a resolution last spring to study the challenges faced by independent rural grocery stores in the state. Capouch, Ehrens, and Grotberg have all testified about the problems they’re seeing, but so far, the state hasn’t offered up any funding.

“Some of the legislature thinks it can be handled by supply and demand,” Grotberg says, “and it doesn’t work that way.”

Crowder believes it wouldn’t take much. “I wonder if it’s worth anything to the state of North Dakota to have us here selling groceries. Is it worth $10,000 a year?”

‘What Do You Need to Be a Community?’

In towns this small, which are hubs not only for residents but also for people living in nearby unincorporated areas, grocery stores and post offices may be the last vestiges of a shared sense of place. And they mean a lot to the people who count on them—especially as the populations age and people continue to move to more densely populated areas.

“Over the years, we watched the ebb and flow of the grocery business. But we’re fortunate in this community, we’ve always had a grocery,” says Marjorie Guscette, a longtime loyal Wimbledon Community Grocery customer. If it closes, she says, “I think it will be the death knell of Wimbledon.”

For the time being, stores like Wimbledon and Bowdon are beating the odds, but it’s more than just grocery stores at stake. These small town are as well.

“What do you need to be a community?” asks Capouch. “Losing food is like that dagger to the heart.”

Last summer, the lease on the Wimbledon Community Grocery was offered to potential managers in the form of a grant. For an investment of $20,000, the chosen applicant would get a three-year lease on the store and the $40,000 worth of current inventory.

Grotberg thought it would be a great opportunity for a young family looking for an investment opportunity, a stake in the town, and part-time work. “[We] want someone with buy-in to the community,” she said. But the application process closed on October 1 and no one applied. However, Marjorie Guscette’s nephew, has recently agreed to become the store’s manager, a huge relief to Grotberg.

“I couldn’t be happier for the store,” she says.

Lori Capouch is holding on to hope as well. She believes that with creativity, commitment, and government support, the remaining full-service, rural groceries will be able to stay in business in North Dakota. More broadly, she says, “I would love for rural people to reclaim control over their own destiny.”

Top photo: Laurel Jones and Larry Crowder outside the Bowdon Community Grocery. All photos by Stephanie Parker.

This story received support from the Solutions Journalism Network, a nonprofit organization dedicated to rigorous and compelling reporting about responses to social problems.

This article was updated to correct that CoBank is a national cooperative bank, not a credit union.

Stephanie Parker is a freelance writer and photographer currently living in Switzerland. Read more >

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Join the conversation.

  1. Mike Clemens
    Very good article. I think it was pretty well covered. Local grocery stores are the connection of the community.
  2. Denisemarie
    There is a much broader conversation to be had, in that small, rural towns across the United States are dying out. I’ve seen it in many Western states as I’ve traveled the past 2 years. It’s an economic fact that young people ARE leaving in droves for better paying jobs with a future and quality of life necessities.

    Throwing grant money at problems like trying to keep community grocery stores open is not a viable solution considering the slim profit margins and competition from Dollar stores.

    Example: a once thriving logging town I’ve traveled through recently, with a population of less than 1,800, has BOTH a Dollar Store and Dollar General, as well as a McDonald’s and a Taco Bell, all within a 2 mile radius. And, then we wonder why we have a town filled with unhealthy, obese and generally unhappy residents.
  3. David Lannon
    Alternative distribution models that delivery directly to remote stores fresh food could be a method to harness newer systems for the benefit of independent grocery stores.
  4. Jenine steinbar
    I believe that love for the small town/ community still exists. We actually hunger for it! I believe though, for it to survive it has to appeal to tourist. It must be unique, possibly quirky, full of not the run of the mill stuff , but offer refreshingly different items, not be found in your chain stores. In other words for the decaying communities of today to flourish they need ingenious and creative ideas. Reinventing the small town will be a delightful challenge that is indeed worthy of federal assistance.
  5. Phoebe
    I'm glad this topic is covered, but the article neglected to mention that farms in North Dakota do not produce FOOD; it's all about agribusiness commodities. mainly for export on the international market (which the farmers have zero control of). According to the USDA, about 75% of all planted acres in the US are in corn and soybeans -- not food for local communities. This is why a rural grocery store can't find locally produced food.

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