How to feed the masses in small-town America

New business models bring food to towns too small for big box stores.

 

Ten years ago, plagued by equipment failures and increasingly sluggish sales, the only grocery store in tiny Walsh, Colorado, closed its doors. But the town’s 600 residents, suddenly facing a 40-mile round trip for food, didn’t despair. Instead, they pooled their money and reopened the historic Walsh Community Grocery Store, a fixture in their town since 1928, as a community-owned store.

Today, the store is turning a profit, and has just one payment left on a $160,000 loan it used to restock and remodel. The shop’s strategy of combining smart community organizing and traditional business acumen is a model for other tiny towns struggling to maintain local grocery stores, even as dollar stores and their frozen wares take over main streets throughout rural America. Roughly 6,000 dollar stores have opened in the U.S. since 2010, according to the retail research firm Conlumino. For at least one chain, Dollar General, the large majority are in towns of 20,000 people or less — places too small for big box stores, like Wal-Mart, but perfect for a dollar store’s slightly smaller shop.

In rural communities, grocery stores — part economic driver, part community builder, and part food supplier — are key institutions, according to an analysis by the Center for Rural Affairs. But keeping them alive isn’t easy. Profit margins are low in the grocery business, and most chain stores accumulate earnings through volume. At small-scale stores like the one in Walsh, the limited clientele means limited sales and, perhaps, bankruptcy. An analysis of rural food cooperatives by the University of Wisconsin found that the most successful stores were the sole grocery store within 20 to 30 miles — in other words, the ones that faced the least competition.

saguachestore_10-s-jpg
Katherine Egli

The arrival of dollar stores, and the closure of local grocers, can turn rural areas into food deserts. When fresh food doesn’t reach the people who need it, or when it’s too expensive for most residents to afford, the result can be a cycle of malnutrition, poor health, and poverty.

Walsh’s grocery, however, is thriving, thanks in large part to meticulous inventory management. (Think mark-ups, though still within reason, for coveted fresh produce, and steep discounts for staples like milk.) The store’s profits fold back into the business, which has 18 mostly part-time employees. Revenue from shares issued to townspeople at $50 each, plus a no-interest loan from the Southeast Colorado Power Association, helped get the business off the ground in 2006. Once the loan is paid off, Jones said, shareholders may start receiving an annual dividend. This year, for the first time in a half-decade, the store posted a profit during summer months.

“I was skeptical when we started,” said Clarence Jones, chairman of the Walsh Community Grocery Store board and a former Walsh mayor. “But people were so enthusiastic that it became a reality pretty quick.”

Community-owned stores aren’t the only fix for towns struggling to retain their food purveyors. Small towns have experimented with cooperatives, public-private partnerships, school-based stores and even nonprofit organizations. And perhaps no community has broken more ground than Saguache, Colorado, a town of 500 that lies 35 miles from the nearest full-service grocery store.

saguachestore_01-s-jpg
A volunteer at the 4th Street Food Store in Saguache, Colorado, prepares fresh local carrots for the shelves.
Katherine Egli

Saguache’s grocer depends on an off-the-wall nonprofit model that blends revenue from a thrift store with health food products. Cofounder Marge Hoglin, a semi-retired former journalist and small business owner who bought the property with a partner for $45,000 in 2012, today employs three part-time workers at the 4th Street Food Store, where she keeps produce prices low by maintaining close relationships with local growers. The thrift store, with its donated, free inventory, generates enough revenue to cover overhead costs, subsidizing the health foods operation. She is also the only retailer in the county to participate in the state’s Double Up Food Bucks program, which allows people to use $20 in food stamps to purchase $40 of produce. Revenues have doubled since the store opened, said Hoglin, who runs the nonprofit as a volunteer.

“I wanted to find a community where I could give back and feel like I have a purpose and a mission,” she said. “I get a lot of satisfaction from feeling like I’ve made a contribution here.”

saguachestore-small-jpg
Marge Hoglin, manager of the 4th Street Food Store
Katherine Egli

Hoglin’s sacrifice isn’t unusual. The success of many rural grocery stores depends on altruism from owners, managers and employees—people who recognized that conventional grocery stores weren’t serving their towns and sacrificed time, energy and personal capital to bring about change. (In Saguache, for instance, the only other retail food source is a glorified gas station convenience store.) As with many small-town institutions, the survival of grocery stores may be less related to sales and profit margins than on selfless, civic-minded communities. 

“It’s not so much about the job,” said Donald Rutherford, a Walsh native who moved back to care for his aging parents and now manages the Walsh Community Grocery Store. “It’s about the community.”

This story is part of the "Small towns, big change" project through the Solutions Journalism Network.

High Country News Classifieds
  • SECLUDED COLORADO HIDEAWAY
    This passive solar home sits on 2 lots and offers an abundance of privacy and views while being only 15 minutes to downtown Buena Vista....
  • COMMUNICATIONS COORDINATOR
    Introduction: Grand Staircase Escalante Partners (GSEP) is a non-profit 501(c)(3) organization with offices located in Kanab and Escalante, Utah. We are committed to the conservation...
  • CARETAKER
    2.0 acre homestead needing year-round caretaker in NE Oregon. Contact [email protected] for details.
  • MEMBERSHIP MANAGER
    For more information visit www. wyofile.com/careers/
  • THRIVING LOCAL HEALTH FOOD STORE FOR SALE
    Turn-key business opportunity. Successful well established business with room to grow. Excellent highway visibility.
  • DEVELOPMENT DIRECTOR
    For more information, visit www.wyofile.com/careers/
  • STAFF ATTORNEY
    STAFF ATTORNEY POSITION OPENING www.westernlaw.org/about-us/clinic-interns-careers The Western Environmental Law Center (WELC) is a high-impact, nonprofit public interest environmental law firm with a 27-year legacy using...
  • PROJECT MANAGER
    Position Summary Join our Team at the New Mexico Land Conservancy! We're seeking a Project Manager who will work to protect land and water across...
  • SEEKING PROPERTY FOR BISON HERD
    Seeking additional properties for a herd of 1,000 AUM minimum. Interested in partnering with landowners looking to engage in commercial and/or conservation bison ranching. Location...
  • DIRECTOR OF PRODUCT AND MARKETING
    High Country News seeks a Director of Product and Marketing to join our senior team during an exciting chapter of innovation and growth. This individual...
  • WILDLIFE HAVEN
    Beautiful acreage with Teton Creek flowing through it. Springs and ponds, lots of trees, moose and deer. Property has barn. Easy access. approx. 33 acres.
  • ARIZONA CONSERVATION CORPS PROGRAM DIRECTOR
    Arizona Conservation Corps is seeking a Program Director in Flagstaff or Tucson
  • COPPER STAIN: ASARCO'S LEGACY IN EL PASO
    Tales from scores of ex-employees unearth the human costs of an economy that runs on copper.
  • EXPERT LAND STEWART
    Available for site conservator, property manager. View resume at http://skills.ojadigital.net.
  • CONSERVATIONIST? IRRIGABLE LAND?
    Stellar seed-saving NGO is available to serious partner. Package must include financial support. Details: http://seeds.ojaidigital.net.
  • CANYONLANDS FIELD INSTITUTE
    Colorado Plateau Natural & Human History Field Seminars. Lodge, river, hiking options. Small groups, guest experts.
  • WESTERN NATIVE SEED
    Specializing in native seeds and seed mixes for western states.
  • CHUCK BURR'S CULTUREQUAKE.COM BLOG
    Change will happen when we see a new way of living. Thinking to save the world.
  • COMING TO TUCSON?
    Popular vacation house, furnished, 2 bed/1 bath, yard, dog-friendly. Lee at [email protected] or 520-791-9246.
  • OJO CALIENTE COMMERCIAL VENTURE
    Outstanding location near the world famous Ojo Caliente Mineral Spring Resort. Classic adobe Mercantile complete w/living quarters, separate 6 unit B&B, metal building and spacious...