FinLogic FinLogic Quantitative Think Tank Center|Rural grocery stores are dying. Here's how some small towns are trying to save them

About five years ago,FinLogic FinLogic Quantitative Think Tank Center Emerson, Neb., lost its grocery store. Residents were forced to drive at least 20 miles to stock their pantries at the nearest full-service store.

Then last year this village of 824 people came together to open a new market. They raised nearly $160,000 of their own money — double their initial fundraising goal. And Post 60 Market was born.

The cooperatively owned store moved into the old American Legion building. It sells a full range of groceries, including fresh produce, meat, and household supplies.

Investors receive discounts and dividends and elect a board of directors each year to oversee large financial decisions.

"With being a co-op and so many people bought in — it's like you got multiple owners who have just as much commitment to see this thing succeed," says manager Brian Horak.

In many rural towns, a grocery store is a thing of the past, as more of these small businesses fold. Yet entrepreneurs and community initiatives are working to turn that trend around.

Shrinking population and shuttered storefronts

According to the most recent data from the U.S. Department of Agriculture, 76 counties nationwide are without a single grocery store, and 34 of those counties are in the Midwest and Great Plains.

The loss of these stores means decreased access to healthy foods, like fresh fruit and vegetables — and more of the kind of packaged, highly processed foods you find at convenience stores. It's also a loss of a community gathering space, where neighbors can connect.

Thriving businesses used to be commonplace in these farm-focused communities. Today it's rare.

Rural communities have been losing population for decades making it harder for businesses to stay afloat, says Rial Carver, program leader for the Rural Grocery Initiative at Kansas State University.

"So as small towns get smaller, that means fewer sales coming in the door for our grocery store," Carver says.

Big box stores and grocery consolidation have added even more pressure on local grocers. A recent USDA report shows the percentage of grocery sales from the nation's top 20 retailers more than doubled from 1990 to 2020, while the consolidation was more pronounced in rural areas.

"These independent, small town stores don't have as much buying power as some of the larger chains that you'll find in urban areas," Carver says.

The Rural Grocery Initiative found that between 2008 and 2018, 105 grocery stores closed in rural Kansas, and in half of those places, no new stores have opened.

Community-led solutions to fill a need

Still Carver says innovation can help keep stores in small towns.

The Rural Grocery Initiative was created in 2006 to help establish and sustain grocery stores in rural communities throughout Kansas. RGI has helped fund 13 different grocery stores since its grant program started in 2017.

"We've seen success with communities kind of becoming engaged through cooperatives, through public-private partnerships," Carver says. "We've even seen nonprofits and school-run grocery stores, as well as municipally run stores in communities."

The initiative shares resources with local groceries — and even has a grocery toolkit for people looking to start up a new store.

The Circle C Market is a good example of a new approach.

It's run by the Cody-Kilgore school district in Cody, Neb., a town of just 167.

"We are vital to the community," says teacher and store manager Liz Ravenscroft. "The next closest grocery store is 40 miles to the east, and the other closest grocery store is an hour to the west."

The store got started in 2008 with the help of several national organizations and a grant from the USDA. A similar grant program is offered today, in addition to other rural food initiatives. The Village of Cody owns the building, while the school district and a local non-profit, Cowboy Grit, helped finance the store.

Each semester about eight students help at the Circle C Market as part of a class, learning important skills from Ravenscroft.

"I teach them how to do the different orders, like pop orders and chip orders," she says. "I also have students that I teach how to do billing."

For small stores, meeting the needs of an individual community is critical to remain in business.

Laura and Don Palmer first started Prairie Market in Paullina, Iowa, eight years ago. Like many businesses in the town of 952, they struggled at first. Then they adjusted their hours, staying open on nights and weekends to cater to their customers, who often commute long distances.

"They appreciate the hours — that they can actually get here and on Sundays," Palmer says. "They're like, 'What did we do before you were open on Sundays?'"

Palmer says they focus on stocking fresh foods and this helps them stand out from nearby discount stores. They also work to appeal to current tastes. Palmer painted the store's facade teal as a nod to a well-known chain.

"My favorite store was Trader Joe's and that's kind of what we have tried to replicate the store after," Palmer says. "People come in the store, especially young people, they want to come in and they want it to be vibrant and clean and organized."

In Emerson, Post 60 Market manager Brian Horak says two things create success for rural grocers.

"Friendliness and cleanliness. That's the two key things," Horak says. "I mean you get the Wal-marts and Hy-Vees and stuff like that, but they're not gonna know you by name. We're gonna know you by name. We're gonna know what you want."

This story was produced in partnership with Nebraska Public Media and Harvest Public Media, a collaboration of public media newsrooms in the Midwest, covering food systems, agriculture and rural issues. Follow Harvest on Twitter: @HarvestPM