| Grocery stores in Kansas |
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Rural Grocery Store Sustainability http://www.ruralgrocery.org/ -------------------------------------- Excerpt: First, you have to know this. For the grocery wholesale truck to even stop at a store, the store must buy $10,000 worth of inventory a week. A week! If the store purchases less, the owners have to pay a penalty or, more typically, the truck won't even stop. In Kansas, even though 72% of the cities have populations of 1,500 or less, it gets harder and harder to find towns this size with a grocery store. Still, I learned about amazing efforts storeowners are making to keep groceries open. In the northwest corner of the state, about six stores go together on one order. The community-owned store in Gove, pop. 95, receives the order and then has to distribute the inventory to all the other groceries. Not easy. In other places, one grocer might have two or more stores and be able to spread the inventory around. Until recently, Will Carpenter owned stores in Potwin, pop. 438, Towanda, pop. 1,355, and Florence, pop. 650. Jim Puff helps move his grocery store inventory by having a thriving catering service and a popular restaurant called Puffy's Steakhouse in the city of Maple Hill, pop. 492. The store in nearby Alma, pop. 764, orders through him, also. In Howard, pop. 764, the grocery store closed so the owner of the drug store and old-fashioned soda fountain, Julie Perkins, took steps to add a grocery store to her operation. In Robinson (pop. 199), Kiowa (pop. 965), and Palco (pop. 228) the local grocery is community owned. Judy Olson, owner of Circleville Market, is trying to keep the local store open for a town of 185. All these efforts are remarkable. Many of the small grocers say that their biggest downfall is competition with super stores. We can call it natural to shop where you think prices are lower (not always true), but we have to make it natural to support the local store. Kansas State's Center for Engagement and Community Development, having adopted the rural grocery store issue as a project, did an extensive survey and then organized the Rural Grocery Store Summit. The meeting took place in early June at the Kansas Sampler Foundation office near Inman. Over 100 people registered for the meeting, grocery store owners, representatives of cities that had lost a store, distributors, and rural advocacy agencies. It was an energetic meeting. Many of these owners had thought they were alone with their problems but found out that others were dealing with the same challenges. Two of the main issues were distribution and customer loyalty. Citizens of a small town find it very inconvenient if they don't have a store. Many will run to the local store for milk and bread yet buy the majority of their groceries at a super center. That trend must reverse for small town grocery stores to survive. If more customers buy more of their grocery purchases at the local store, smaller stores will be more able to meet minimum expenses and have more ordering flexibility; with profits, local stores can upgrade equipment. And as a consequence, small town residents will have a better store. It's a partnership; both owners and shoppers must put out their best effort. To succeed, a small store must be clean, efficient, and community-minded. Locals residents must support it. Source: http://www.dailyyonder.com/milk-bread-and-heroes-kansas-groceries ----------------------------------------- Excerpt: Supermarkets are the largest segment of the retail grocery market and are dominated by chains. American consumers prefer these outlets due to their wide selection, convenient locations and longer hours of operation (Euromonitor, 2008). In fact, Americans believe that supermarkets offer the best selection of products they need to maintain their health (FMI, 2008). Faced with increased competition from large mass merchandisers (e.g. Wal-Mart Supercenter and SuperTarget which offer one-stop shopping solutions and everyday low prices for a broad selection of groceries) and other major segment leaders, supermarkets continue to remodel stores and enhance product offerings to improve consumers' shopping experiences. While supermarkets had heavily focused on expanding their non-food offerings, in order to compete with mass merchandisers, over the past several years, this trend now seems to be reversing as food products reclaim lost shelf space in many outlets. Supermarkets dominate the United States retail grocery sector; sales reached US$411.8 billion in 2007 comprising 43% of the market, a 15% increase over 2004. The current economic downturn in the United States, intensified by higher energy and food prices, a drop in consumer confidence, and a weakened housing market, is affecting how shoppers spend their money, particularly on groceries. Industry analysts have noted that basket sizes are increasing but trips to retail grocers are declining, as consumers continue to look for bargains and stretch their dollars, a sign that rising fuel prices are also beginning to take a toll on consumers' wallets. Current statistics estimate that consumers will make less than two grocery trips per week in 2008, down from an average 2.2 outings in 2005. Americans are making subtle but impactful changes to their shopping patterns, such as opting for white meat instead of red; swapping a restaurant meal for a frozen, ready-made meal at home; buying private label products in place of premium goods; using coupons more often; and purchasing "club-pack" sized products. South-western consumers are increasingly trading down from branded to private label products, and private label to value brands. Warehouse club retailers, such as Costco, are also reporting increased sales as consumers turn to more cost-effective shopping formats. The retailer saw US$6.5 billion in net sales in the five weeks ending April 6, 2008, an 11% increase over the same period in 2007, as well as US$41.3 billion in year-to-date net sales ending April 6, 2008, a 12% increase over 2007 totals. It is also important to note that there was a noticeable push within the American consumer segment to prepare and eat more meals at home prior to the current economic downturn. Although some may have viewed this trend as an early indicator of the coming economic slowdown, it still holds true that Americans are increasingly preparing meals and dining at home, supported by the idea of maintaining healthier diets. The economy's performance has since increased the attractiveness of cooking and eating at home, on a number of levels, to a greater number of consumers. Findings from the Food Marketing Institute's (FMI) U.S. Grocery Shopper Trends 2008 report greatly reflect these market trends. Roughly 71% of Americans are dining at restaurants less often in favour of cooking at home, and the average number of family meals eaten at foodservice establishments has dropped to 1.2 times per week, down from 1.3 outings in 2007 and 1.5 occurrences in 2006 (FMI, 2008). Furthermore, 67% of consumers are purchasing less premium food, while 60% report buying more store brand products; not surprisingly, 58% of Americans state they are consuming more leftovers (FMI). Source: http://atn-riae.agr.ca/us/4031_e.htm#c -------------------------------------- Excerpt: The Southwest United States, comprised of the states of Arkansas, Kansas, Louisiana, New Mexico, Oklahoma and Texas, offers a number of unique and recognizable types of cuisine, the presence of top-tier food companies (including Wal-Mart, SYSCO, Tyson and Whole Foods Markets) and a large and ethnically diverse population to market agri-food products. The region's growing retail grocery market is fuelled by its 39.4 million consumers, which account for more than 13% of the total American population. Although grocery sales in the Southwest are dominated by the state of Texas (the second largest retail grocery market in the United States), the rest of the region is also experiencing strong market growth. The south-western states offer a highly dynamic environment for grocery retailers, with increasing competition from mass merchandisers and alternative grocery store formats, as well as retailers that are tailoring their offerings and formats to meet changing consumer demand. Source: http://atn-riae.agr.ca/us/4031_e.htm --------------------------------------- Excerpt: "Small grocery stores are in crisis," said Marci Penner, director of the Kansas Sampler Foundation in Inman. "We have to respond with urgency, out-of-the-box solutions and a collective voice. Keeping grocery stores open is parallel to sustaining rural communities." Store owners, food distributors, business developers, educators, concerned citizens and representatives of local, state, and federal government came to Inman to address the challenges facing rural grocers. In addition to providing a networking opportunity, the summit unveiled a Web site at http://www.ruralgrocery.org and created a steering committee that will lead participants toward solutions for such problems as high distribution fees, declining population and commuter customers. Some ideas that came out the summit included establishing additional re-distribution centers for the southwest and northwest parts of the state and creating a "buy local" campaign for rural groceries, Procter said. Source: http://www.kansassampler.org/newsview.php?id=66 --------------------------------------------- Excerpt: About the initiative Confronting issues of business development, public health and community sustainability, CECD is partnering with the Kansas Sampler Foundation, the Huck Boyd National Institute for Rural Development, grocery store owners from across the state and faculty and staff from the departments of agricultural economics, human nutrition and rural sociology at K-State to identify and develop models to sustain retail sources of food for rural Kansas citizens. The Center for Engagement and Community Development and its partners have identified nearly 200 grocery stores in rural towns across Kansas with populations under 2,000 and are beginning a much-needed conversation with these rural Kansas grocers. Through this initiative, CECD seeks to create new models for rural business development and sustainability and plans to address specific questions such as, How can we increase local customer loyalty? How can rural business best compete with large chain stores? What are the best strategies for dealing with minimum buying requirements? What models of rural business ownership are most effective? Are there alternative models of distribution for getting products to rural business owners? The specific goals of this initiative include: To create a rural grocery website for sharing information with one another, To create and deliver a marketing survey of customers needs and wishes, To create a list of rural grocer best practices, and To begin to develop a "buy local" campaign. If you would like to be included in this conversation or would like to talk about rural business development retention, please contact CECD at 785-532-6868 or cecd@k-state.edu. Source: http://www.k-state.edu/cecd/initiatives/grocerystore/ --------------------------------------------- Excerpt: Temme’s story might sound similar to those of many small-town business owners, especially during an economic downturn. But when the business is a grocery store that has been on Main Street for 122 years and the town has just 340 people, the issue goes a lot deeper than one family. “It’s too valuable to the town itself,” said Monty Reicks, owner of Petersburg Building Supply and a member of the Petersburg Industrial Development Corp. Board. “If you take that off Main Street, in my opinion, the rest of Main Street is going to fall with it.” That’s why the board has taken up the store’s cause — and is urging residents of the small town north of Albion to do so, too. The board wrote a letter last week to the store’s wholesale supplier, Affiliated Foods Midwest of Norfolk, asking to meet with the company to find a way to loosen its penalties for small weekly deliveries. Also last week, Jim Dickerson, publisher of the local paper, the Petersburg Press, wrote a front-page editorial urging locals to shop at the Rae Valley Market to save the store. “It’s time to meet a big challenge,” Dickerson wrote. “Can the Petersburg area yet again surprise those who shrug and say it was just ‘inevitable’ that the community would lose its local grocery store?” Surcharge adds to costs Temme’s troubles began from the day he and his wife, Radene, bought the store from Larry and Shirley Henn. The store had been a member of Affiliated Foods, a wholesale distribution co-op of independent grocers, since its inception as General Wholesale in 1931. Affiliated requires minimum weekly purchase amounts from its members, and it institutes penalties for stores that don’t meet those thresholds. Temme said his store must buy $9,000 per week to avoid paying a weekly surcharge of 5 percent of his purchase amount. He must buy $10,000 a week to avoid forfeiting the cooperative’s dividend. Those totals have been increased from $7,500 per week, the threshold still grandfathered in for existing owners, like the Henns. But when ownership changes, the minimum is bumped up to its current level. Last year, Rae Valley Market purchased an average of $8,073 of groceries per week. Only a handful of times did it reach $9,000 to escape the surcharge. Temme has yet to reach $10,000 in a week. He estimates that the surcharges and lack of dividends cost him about $32,000 last year — more than enough to make the difference between a healthy store and a foundering one. “Not only are you not getting a rebate, but you’re getting the surcharge. It’s almost like a double hit,” Temme said. “We’re in a slowly sinking ship.” A spokeswoman for Affiliated referred questions to Doug Cunningham, the company’s government relations director and director of the Hometown Merchants Association, an industry group that includes Affiliated and promotes locally owned grocers. Cunningham said he was not familiar with the Rae Valley Market’s situation and would not speak about it or Affiliated directly. But he did say that both wholesale co-ops and locally owned grocers are on the same side of a struggle against big-box stores such as Wal-Mart, which have been squeezing both out of business at an alarming rate. Cunningham said he would encourage stores in situations such as Petersburg’s to let local shoppers know that it pays to shop locally rather than at big-box stores. Source: http://www.cfra.org/ruralmonitor/2009/03/16/petersburg-community-rallying-keep-grocery-store-business |
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