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New USDA study finds rural grocery shoppers have fewer places to buy food

Market On The Hill in Mount Pulaski, IL is a community owned grocery store that opened in response to retail food consolidation in its rural area.
Market On The Hill
Market On The Hill in Mount Pulaski, Illinois, is a community-owned grocery store that opened in response to retail food consolidation in its rural area.

The report paints a grim picture of accelerating consolidation over the last three decades. Yet some communities and local grocery stores are finding ways to thrive.

New data from the U.S. Department of Agriculture found there are fewer places to buy groceries with each year that passes, but the consolidation is especially high in rural areas.

The USDA report shows the percentage of grocery sales from the nation’s top 20 retailers more than doubled from 1990 to 2020. The consolidation was more pronounced in rural areas.

“Food retailing markets in rural and small non-metro counties are considerably more concentrated than food retailing markets in metro and large non-metro counties,” the report stated.

That means for many small town residents, buying food requires driving to Walmart a few towns over or trying to make do with prepackaged and canned foods available at a Dollar General.

Even as small, full-service grocery stores become less common, some small-town grocers are finding ways to stay competitive, while in other communities, they’re banding together to start their own.

Sanborn Foods in Sanborn, Iowa, still operates, despite being in a town of just 1,400. Owner Scott Vogelaar has found a way to compete with larger grocery stores in surrounding towns. He joined the Associated Wholesale Grocers, a co-op of small stories based in Kansas City, Kansas.

“Being as large as they are and as many stores as belong to the co-op, they’ve got a really good buying power with the manufacturers and that helps us with prices, a lot,” he said.

Vogelaar said he also works to differentiate his store through quality and service in particular departments.

“Meat and produce is where we can do that,” he said.

But Vogelaar admits that “price is what drives most shoppers.” As part of the co-op, he’s able to get better prices and pass the savings along to customers.

When the supermarket closed in Mount Pulaski, Illinois, a community-owned grocery store took its place. In 2020, Market On The Hill opened in the town of 1,500 people. The store focuses on locally grown and made foods to help differentiate itself from national chains several miles away, as well as the dollar store that opened in town.

“We have a deli and fresh baked goods everyday. That’s something Dollar General can’t offer,” said Kaitlin Weitekamp, a member of Market On The Hill’s board of directors.

Having opened the grocery right as the coronavirus pandemic was starting, then getting hit with the high inflation of the last year, makes it difficult to know what normal operations will be, said Weitekamp. Still, she said the community grocery is confident they will be successful, even if consolidation continues in the grocery industry.

“We’re here because the people of Mount Pulaski want us to be here and that really is what will make the difference in the future,” she 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. Follow Harvest on Twitter: @HarvestPM

Jonathan Ahl is a reporter for Harvest Public Media based at St. Louis Public Radio.
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