Wood’s Supermarket and Deli sits in front of a cooperative grain elevator in Pocahontas, a town of about 1,800 people in northwest Iowa.
Although a few dollar stores carry food, this is the only grocery store in town. The closest alternatives are outside the county lines, about 20-30 minutes away. Kent and his wife, Kim, say they’re not sure what people would do if they closed the store.
“We have elderly people that aren't going to drive out of town,” Kent said. “I think it would be really difficult for our community.
The Woods’ motivation to work long hours, six days a week, stems from relationships they have with customers – many they’ve known for decades. When one had a health emergency in the store, they waited with her until an ambulance came and then drove her car home.
“We went in her house and put her groceries away. We locked up her house, and then we went to the hospital and dropped her keys off,” Kim said. “That's what you do in a small town. You look out for each other.”
Rural policy experts and advocates say grocery stores are vital for communities to thrive long-term. Along with supporting access to fresh produce and food staples, they circulate dollars in local banks and help attract new residents looking for a place that checks-off their list of essential services.
Grocery stores also provide a third space for people to interact outside of home and work, which can help reduce isolation and strengthen the social glue of a community.
But the number of rural, independent grocery stores in the U.S. has steadily declined in recent decades.
To help reverse this trend, half a dozen states, including Illinois, Minnesota, North Dakota and Oklahoma, have passed legislation in recent years to develop grant programs for grocers. North Dakota legislators will decide whether to build on a two-year program while lawmakers in Iowa and Nebraska push to create their own versions.
Chad Ingels is one of the Republican representatives who introduced the grocer reinvestment bill in Iowa. During a subcommittee meeting in February, Ingels said a matching grant program could make a big difference in some of Iowa’s smallest towns with “mom and pop shops.”
“Their margins are very thin, and I hear from all of them, ‘We're just one freezer breakdown, one cooler breakdown from shutting the door,’” Ingels said.
Under the Iowa bill, independent grocers in communities with 20,000 or fewer people could use state funds for new equipment and utility upgrades, building improvements, professional services and technology.
What’s behind closures
The Iowa Grocery Industry Association reports a 15% decrease in independent grocers in the state over the last decade.
In Nebraska, the number of rural, independent grocery stores declined by 30% from 2016 to 2021, according to a report funded by the Center for Rural Affairs and Nebraska Grocery Industry Association.
For Jillian Linster and other staff at the Center for Rural Affairs, the data reflects what they are experiencing in the communities where they live and work.
“We were seeing in our everyday lives that more and more stores were closing or were struggling to stay open,” said Linster, the organization’s senior director of policy and an advocate for both bills.
Some communities lose grocery stores because the owners retire without transition plans or struggle to find qualified people to take over the business. Fewer customers from population loss, rising operating costs and aging equipment are also factors.
“Rural, independent grocers are operating on extremely slim profit margins, sometimes as little as 1%. So there’s not a lot of wiggle room,” Linster said.
But researchers and rural grocers say competition with large chains is one of the biggest challenges. Walmart captures one in every four dollars spent on groceries in the U.S. and can affect retail stores within a 100 mile radius.
Rural, independent grocery stores were nearly three times more likely than urban, independent grocery stores to close after a new dollar store opened in the same census tract from 2000 and 2019.
Large chains can leverage their size to get lower prices for products, often through negotiating directly with food manufacturers. The National Grocers Association says these tactics create an unfair playing field and calls for stronger antitrust law enforcement.
Supercenters and dollar stores also benefit from ordering large volumes from wholesale distributors.
“Often the wholesale purchasing is tiered so that the more you purchase, the less it costs. And that is very challenging for a small, independent grocer who can only move so much product on their shelf, particularly for perishable items that, of course, have expiration dates associated,” Linster said.
Along with the higher purchasing costs, independent grocers may struggle to meet a distributor’s minimum volume requirement or pay more for shipping, especially if they’re in a remote area. Cooperative purchasing, which pools orders from multiple businesses, can help reduce these costs, said Linster.
If the Nebraska bill passes, grants could be used by grocers in communities with 40,000 or fewer people to get technical support applying for federal grants or to update equipment. Funds could also be used to explore new business models, like purchasing cooperatives.
Pooling grocery stores
Teaming up with other grocers to make larger orders appeals to Liz Ravenscroft, a proponent of the Nebraska bill.
Ravenscroft is a business teacher at Cody-Kilgore Unified Schools in north-central Nebraska and the manager of Circle C Market.
“We are extremely remote,” Ravenscroft said. “A lot of our customers travel up to an hour away just to come to a grocery store.”
Circle C Market is the only grocery store in a large rural district and an entrepreneurial learning lab. High school students support the day-to-day operations, earning credit during school and wages after hours.
Ravenscroft said Circle C Market has customers that rely on the store for their weekly necessities, but it’s difficult keeping prices affordable when they can’t order large quantities from a wholesaler.
“The problem with our remote location is we are unable to sell a minimum amount that certain companies require for groceries,” Ravenscroft said.
She places orders with a foodservice distributor and drives each week to a grocery store 45 minutes away to buy fresh produce, while she also sources some bulk items from Walmart and Sam’s Club.
By creating a purchasing cooperative with other stores in the region, Ravenscroft said together they could order through one food wholesaler and pass savings onto customers.
“We're always looking for ways to be able to get groceries at a more affordable costs for our customers. That's the bottom line. That's what I strive for,” Ravenscroft said.
She emphasized that a state-funded grant program could benefit large areas of rural Nebraska, not just individual stores.
Food insecurity in Nebraska is higher than the national average, and the Nebraska counties facing the greatest level of food insecurity are rural.
“One of the ironic things sometimes about living in our Midwestern states is that the rural areas produce all of this food that ends up getting exported across state lines or even out of the country, and then we have a challenge buying in food to sell in those rural locations,” Linster said.
Innovating out of food deserts
An estimated 2.3 million rural residents in the U.S. live in areas where it’s difficult to access healthy food. Researchers from Kansas, Minnesota and Iowa say “significant food desert areas are growing across the rural Midwest due to the disappearance of independent community grocery stores.”
In Kansas, 54 rural grocery stores in Kansas permanently closed between 2008 and 2018.
The Rural Grocery Initiative, based at Kansas State University Research and Extension, developed after a series of listening sessions with rural communities in 2007.
“During those listening sessions, the thing that kept coming up and again and again was this concern about the local grocery store. People really worried about the viability of their store, wanting to make sure that it could be maintained over the long term,” said Erica Blair, Rural Grocery Initiative’s program manager.
Blair said the initiative supports communities interested in opening a store, connects grocers to resources and highlights local solutions. Sometimes this looks like a community foundation or city owning a building and providing the grocer with below market rate rent.
“We see rural communities continuing to innovate and come up with new models of making this business more sustainable in their communities,” said Blair.
Conway Springs, a town southwest of Wichita, Kansas, became a food desert in 2007 when the only grocery store closed. Jenny and Clint Osner decided they’d fill in the gap even though they didn’t have experience in the industry as an elementary school teacher and welder.
Relatives helped them build a store on weekends for nearly nine months, and they opened Hired Man’s Grocery and Grill in 2008.
“We kept our outside jobs for a while. Basically, we pulled no income from the store so we could turn that money back over into putting more product on the shelf,” Jenny Osner said.
She said they try to sell locally grown produce, like mushrooms, cantaloupe and black diamond watermelon, when possible.
They also produce specialty sausages, hamburgers and an award-winning Candy Corn brat.
“We do have a following even outside of the state, plus people coming in from around the area,” Osner said. “Even with our population of 1,200-1,300, we're pulling in a much bigger area because of our produce and meat.”
She said Hired Man’s Grocery and Grill is exploring their options to ship meat across state lines, but their top priority is serving the community. Sometimes that means helping older residents unload their groceries at home or providing extra services, like bulk ordering, for schools and churches, fundraisers and funerals.
“We're there for the highs in life, and we're also there for the real lows,” Osner said. “When those funerals hit and we lose the people that we're really connected to, we feel it in the store as well.”
Kansas does not have a state-funded grant program for rural grocers, said Blair. But the Rural Grocery Initiative is a partner in the Kansas Healthy Food Initiative, which offers a mix of loans and grants for food retailers in underserved communities.
One of the recipients is Malay’s Market in WaKeeney, Kansas. Tasha Malay and her mother Cindy bought the grocery store in 2019 when the owners announced they wanted to sell. Both women had worked there for years in different roles – bookkeepers, managers – under the previous ownership.
Malay said the Kansas Healthy Food Initiative helped cover part of their match for a larger federal Rural Energy for America Program grant last year. She said the funding made it possible to convert all of the fluorescent lights to LEDs and buy new, energy efficient coolers with doors.
These changes will reduce the store’s electric bill by half, said Malay. But the upfront costs are expensive.
“When you only have four light ballasts, that's nothing, that's 100 bucks,” Malay said. “But on the scale that we have lights in the store, it’s a $10,000 project.”
Malay said she recently started purchasing bulk pallets with other stores in the region to take advantage of tiered wholesale purchasing.
“I wouldn't be able to sell an entire pallet of coffee, but I can split it with [the grocer in] Oberlin. He'll take half of it; I'll take half of it, and we'll both sell it all,” Malay said.
This story was produced in partnership with Harvest Public Media, a collaboration of public media newsrooms in the Midwest. It reports on food systems, agriculture and rural issues.
