With the announcement of the closing of the Kent Giant Eagle and the old Tops store sitting vacant, I’m sure a lot of people are asking what is the city doing to fill these stores back up. I can tell you this: we’ve talked to grocers around the region (including the Mustard Seed which seems like a natural fit for Kent), we’ve reached out to grocers outside of the region (see the blog post from September 7, 2006), but like the owners of the Kent Giant Eagle said in the newspaper article “the store was unable to reach and maintain the sales volumes necessary to operate profitably” — and that’s the same thing we hear from the people we try to sell the Kent locations to. The bottom line is — if not enough of us who live in Kent, shop at Kent stores, they can’t survive.
Now, I’d actually argue (and I did in my Sept. posting) that it’s not as much about the demand in Kent — after all, everybody that lives in Kent buys groceries, but I think the Kent grocery stores were not up to the standards of the stores right around us — which means most of us were willing to shop in Stow that had first rate, top of the line stores.
So here’s the deal, the city doesn’t own the land or the building but we certainly try to help the businesses stay in business and we help the owners market their sites as much as we can. Interestingly, I recently ran across an article about some other cities that have taken grocery matters into their own hands. I’m not advocating here, I’m just sharing.
Published January 28, 2007
Small towns struggle to keep grocery stores
Many doors close, but some Iowa communities form co-ops, sell shares or buy space for proprietors.
REGISTER BUSINESS WRITER
State Center, Ia. – The new grocery store that opened last week in this Marshall County town of 1,300 people represented more than a place to buy bread, milk and a pound of ground beef.
The debut of Hometown Foods on Main Street symbolized an opportunity for growth. And it showed a sense of community spirit.
“Everybody in town got to a point where we knew if we left it to market forces, we wouldn’t have a store,” said Jeff Merrill, who owns Remarkable Rose Floral and Gift store in State Center.
So the city’s economic development group raised $800,000 in no- and low-interest loans to construct a building downtown. They found Conrad grocer Lyndon Johnson, who was willing to lease the space and provide the town with a store that includes fresh meats, produce and other goods.
Unable to attract established supermarket chains, small Iowa communities are finding creative ways to revive the town grocery store. Anita opened a store late last year and Fontanelle last spring. Hubbard was able to reopen its shuttered grocery in 2005.
Nationally, there are about 48,000 grocery stores and supermarkets, according to the Food Marketing Institute. In Iowa that number ranges between 575 and 600, said Jerry Fleagle, president of the Iowa Grocery Industry Association. That pales in comparison to the 1,920 stores Iowa had in 1976 and 911 in 2000, according to research from Iowa State University Extension.
“These stores in small towns serve more than just the dietary needs of the community,” said Terry Besser, a professor in the sociology department at Iowa State. “They are a source of community pride.”
Communities are finding creative ways to keep their local food stores. Mount Ayr, Fontanelle and Anita created grocery co-ops by selling shares to residents, the proceeds of which built and operate the stores. In towns like State Center and Hubbard, economic development groups and town officials financed construction of a store and found someone to own and operate the businesses.
So far, the honeymoon in State Center is splendid.
“The store is modest by city standards, but it’s the best we’ve ever had,” Merrill said.
State Center City Councilman Harlan Quick sees the new grocery store as a catalyst for other development in the “underutilized” downtown area, where several storefronts sit empty.
“The new store provides a service to the people who live here and makes the town more attractive to new residents,” Quick said. “There are skeptics who think the time has passed for small-town grocery stores, and the reality is that Fareway and Hy-Vee will not come to a town this size. My own thought is that the supercenters and the sheer size of those stores reduces convenience.”
Whether small-town grocers can survive depends on the community, Fleagle said.
“It’s a value proposition for most consumers, which includes both time and money,” he said.
For example, farmers who have a lot of time on their hands at this time of year may be more willing to make a big shopping trip to larger cities where they believe they can find less expensive groceries, Fleagle said. During their busy spring and summer seasons when time is of real value, they may shop at the small grocery store in town, he said.
ISU’s Besser said statistics show that towns with a population of 750 or 1,000 have a better chance of maintaining a local supermarket.
“For the smaller communities, it’s a real challenge,” she said.
Ed Eden said he faces competition daily at his grocery store in Lone Tree, a town of 1,100 south of Iowa City. He bought the store in 1999 and began expanding inventory to draw in customers. He added gasoline pumps later that year, which now account for about 30 percent of his total sales.
“My biggest group of shoppers are the 25- to 50-year-old crowd,” he said. “It’s a convenience thing for them. The majority come in and spend $10 to $15 each time, but they come in everyday.”
He sees L.T.’s Fine Grocery contributing in other ways.
“The town could do without a grocery store. It would be an inconvenience. But we have nine people working here and we don’t have many jobs in town,” he said.
Lyndon Johnson said he was willing to take a chance on State Center because he’d had success with grocery stores he owns in Conrad, Hubbard and Gladbrook and two neighborhood stores in Waterloo.
State Center was eager for a grocery store after the town’s only food shop closed in 2002. The town and its Community Development Association approached several established grocery companies about opening shop in State Center. None was interested, Merrill said.
The small building needed to be expanded to fit the needs of the town, Johnson said. So the community built a 7,700-square-foot building, more than three times the size of the old store.
Johnson had advised State Center officials that the best location for a store was near the town’s post office. In communities with no doorstep delivery, folks come downtown for their mail. Also, for groceries, he said.
His Hometown Foods offers a wide selection of products. Service includes hauling grocery bags to customers’ cars and home delivery. In addition, the stores offer yearly scholarships to area youths, Johnson said.
“The biggest challenge for us is getting our vendors to treat us like they do Hy-Vee and Wal-Mart,” Johnson said. “We sometimes have servicing and pricing issues.”
He has been able to offer what he considers competitive pricing by being able to buy for multiple stores. The single-shop owner can’t realize those savings, he said.
Getting townspeople to change their habits by buying locally has been the challenge in Fontanelle, which opened Nodaway Valley Market in April. The town of 700, about 55 miles southwest of Des Moines, sold shares at $250 each to raise money to build and operate the community grocery after being without a market for eight years.
“We’ve only been open nine months and it takes a while to figure out what the community buys and wants,” said Larry Raper, a Fontanelle businessman who help spearhead the town’s new grocery store.
One of the store’s biggest successes has been the liquor department, which has a broad product selection and is one of the few places in Adair County to buy liquor, he said.
Fontanelle is hoping the store will spur more businesses to locate downtown.
“We’re constantly looking for new business,” Raper said. “On average it takes three to five years before a town will realize any significant changes from a new business like the grocery.”