Des Moines Register
01-28-07
Small towns struggle to keep grocery stores
Many doors close, but some Iowa communities form co-ops, sell shares or buy
space for proprietors.
By PATT JOHNSON
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 lowinterest 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 HyVee 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."
Reporter Patt Johnson can be reached at (515) 284-8367 or
pjohnson@dmreg.com