Preserving small town grocery stores, which often serve as a vital anchor for rural communities, is the mission of the Rural Grocery Initiative at Kansas State University, founded in 2007.

Preserving small town grocery stores, which often serve as a vital anchor for rural communities, is the mission of the Rural Grocery Initiative at Kansas State University, founded in 2007.

Among the biggest threats rural grocery operators cite in surveys are high operating costs, purchasing minimums imposed by food distributors and — at the top of the list — competition from chain stores.

At the recent Rural Grocery Summit, the fifth national conference of its kind presented by K-State and collaborating organizations such as the Center for Rural Affairs, the hand wringing was evident. As dollar stores invade ever-smaller communities, they add to existing pressures imposed by big box retailers like Wal-Mart.

“Talk to just about any store owner here, and they will mention the dollar stores,” said David Procter, director of engagement and community development for K-State and the Rural Grocery Initiative’s founder.

Jenny Osner, who with her husband Clint owns and operates Hired Man’s Grocery and Grill in Conway Springs, Kansas, was quick to back that up. Fresh meat items, like ground beef and traditional “rope sausage,” are the big sellers at her store. But customers often stop in to buy those items after their cars are already filled with groceries purchased at a big box store somewhere further away, she said.

Meanwhile, the local zoning board is considering a proposal by a dollar store that wants to open across the road from her. Many people don’t realize that the newer dollar stores are incorporating groceries, even produce, into their layouts, which puts them in direct competition with small town grocers, she said.

There’s a perception that chain stores are cheaper, but that’s often unfounded, she said. Not only that, but shoppers have the illusion that when a chain store opens in a rural area it will offer the same pricing and selection as the same stores in bigger towns even though that’s usually not the case.

Though their business is going well, Osner and her husband have other careers to fall back on if they can’t keep their doors open. In fact, many of the conference participants appeared to have alternative sources of income. Among them was Shane Tiffany, a prominent member of the Kansas Livestock Association who runs a feedlot near Herington. After moving to his wife’s hometown of Alta Vista, he was elected mayor just as the town’s only grocery was closing. He and his family ended up purchasing and renovating the store and hiring an experienced local to run it.

Tiffany was one of two proprietors recognized during the conference by K-State’s Huck Boyd Institute for Rural Development. He and the other honoree, Loren Lance, of Mildred, Kansas, are both full-time farmers.

Nick Graham, a conference keynoter, was a rare exception.

Graham was featured by CBS News 10 years ago after purchasing his hometown grocery store in Truman, Minnesota, while he was still a 17-year-old high school senior. Today, after weathering some financial ups and downs, he continues to own and operate rural grocery stores as a full-time profession. His training came entirely by way of “the school of hard knocks,” he said. He recommended hard work, stringent management, community involvement and paying employees well to minimize turnover.

Graham’s stores adhere to a fairly conventional ownership model, but Procter said small stores are experimenting with many different ownership structures.

“Increasingly we are finding nonprofits running grocery stores,” he said. That’s the plan for the community of Plains in southwest Kansas, which hopes to break ground on a new store this fall.

“At the last summit, we featured three stores run entirely by high school classes,” Procter added.

Diversification and collaboration are other ways to reduce risk.

Kathy Nyquist, a consultant from Chicago, became intrigued by the notion of whether rural grocery stores could double as food hubs after meeting Tim White, owner of a small store in Hiawatha, Kansas. He had started a farmers market in his parking lot. Since the local farmers were already coming to him, he was considering getting into food aggregation and wholesale distributing.

White wasn’t a presenter at the conference but in his place was Leon Atwell, a leadership coach, business consultant and farmer from Bennington, Kansas, who talked about similar efforts by the northwest Kansas-based High Plains Food Co-op to “embed” a food hub within its operations.

“It represents a back-haul opportunity for us,” Atwell explained. “When we send delivery trucks to our customers on the Colorado Front Range, we’re passing lots of rural grocery stores along the way. We are also linking together with other food co-ops to increase our inventory. If we can figure this out, we think this model could be replicated across the country.”

Other owners offered still more suggestions. To avoid pricing comparisons with big box stores, Stephanie Freeman said the market she opened in her tiny hometown of Woodhull, Illinois, exclusively stocks locally sourced items.

Kendra Rasmusson, of New Prague, Minnesota, found a creative way to reduce overhead. Her membership-based store uses a keyless entry system and surveillance cameras to allow customers and farmer-vendors 24-hour access for shopping or to self-stock items while minimizing labor requirements. The turnkey cost to open the store was less than $75,000, she said.

Connecting independent rural stores with today’s increased emphasis on local food access and healthier communities might be another way to help keep them viable, Procter said.

Demand for local, organic and other specialty items prompts some people to bypass their hometown stores in favor of big city offerings, he explained.

“We think it’s possible to provide healthier food in local stores and keep that traffic local,” he said. “It’s our hope that if we provide healthy food, it will be good nutritionally but also economically. That’s our hypothesis.”

Intense discussions about healthier eating are sweeping across many rural communities, driven by public health initiatives that often involve detailed community food assessments.

Brian Dolezal, a longtime chef who moved his family to Hoisington, Kansas, to take a job as dietary director for the local hospital, now heads up that community’s health task force.

To promote healthy food, Dolezal set up a life-sized cutout of nurse Clara Barton, founder of the Red Cross, at the local grocery store where she dispenses flyers containing recipes made from sales items featured at the store each week. He makes sure the hospital procures at least 10 percent of its food from the local grocery store, to help support its financial viability, and has long-term plans to add a full-service café at the hospital that will be open to the public.

“We want to kick-start a cultural change,” he said. “Education is a big part of that, but the community is really behind us.”