as an example, he says if a store in a rural community over-buys on XXL
dresses and no one in town wears that size, no level of markdown is
going to make that product move. “So inventory management becomes
this crucial endeavor. It is interesting to see what frozen SKUs sell in
the Heartland versus the aggregate of the U.S. It is a heavy penetration
of fried goods, think bulk bags of mozzarella sticks and fried chicken.
There is less penetration of fresh produce, fresh meat and fresh seafood.
Don’t get me wrong because frozen bagged tilapia is still this ridiculous
seller in the more rural markets,” Smith says.
To be more competitive, rural independents need to utilize a broader
distribution network and team with strong wholesalers, like C&S or
Associated Wholesale Grocers. Even a chain like Dillons might be wise
to use someone like an Associated to service far-flung rural stores, like
St. John, Smith says.
“The more progressive chains have been thinking through some of
those logistics, using third-party logistics ( 3 PL) providers, and partnering up with non-competitive retailers in the area, like those in apparel
and general merchandise categories. I think it is a huge and enormous
efficiency conversation that will help those local communities thrive,”
SPIRIT OF CO-OPERATION
An increasing number of small towns are looking at establishing a
supermarket co-op as a last-ditch effort of getting their stores back.
Both St. John and Emmetsburg are examining that option.
“Right now we’re open to anything,” says Owens. “We want to try
and get a grocery store back in the community before people get in
the habit of shopping elsewhere and it gets so ingrained that they just
continue to do that.”
“I get five to 10 phone calls a week from people that own businesses
here in town or just community members asking ‘ What can we do? What
are our options? Could we do a co-op grocery store?” Emmetsburg’s
In Emmetsburg a co-op looks like a strong option, especially since
Hy-Vee ruled out opening up in town and the townsfolk will not go for a
Walmart Neighborhood Market because residents like companies that
give back to the community, Joyce says. Aldi has also been ruled out.
“I looked at Aldi’s requirements and they need 10,000 car counts
going past the building,” Joyce says. “We’re at 3,000.”
Emmetsburg officials are looking at purchasing the Food Pride/
ALCO property and Joyce says she already purchased 90 percent of
Food Pride’s fixtures. “That would be another incentive we’d be willing
to give a grocer,” she says, along with a $10,000 grant. “Another supermarket is something that our community definitely wants and needs.”
Historically, co-ops were found in more highly educated areas.
“There tends to be co-ops in places where there may be universities,
or the Upper Midwest, Northeast and Northwest—areas where the population has that nature of working collaboratively to get this done,” says
Eric Davis, a spokesman for National Co+Op Grocers, the Iowa City,
Iowa-based trade association representing 80 percent of the established
co-ops in the U.S.
Communities looking to establish their own co-op should reach out
to Food Co-Op Initiative, a Savage, Minn.-based non-profit that provides services for communities starting co-ops.
Converting an existing store, such as the St. John Dillons or