U study: Rural areas could have shortage of groceries in decade

Almost two-thirds of rural grocers say they plan to leave the business within 10 years, yet most have no plans to ensure that their stores will continue to operate after they are gone — a possible blow to small-town consumers.

That's the conclusion of a new study by the University of Minnesota, which found that rural grocers are particularly important for supplying fresh produce, and that their absence could diminish nutritious food options.

"Grocery stores are the primary source of healthy food," said Karen Lanthier, a co-author of the report and assistant director for the U Extension's sustainable local food program. "When they close, consumers face serious access challenges, and in some cases rely on less-healthy foods as part of their diet."

The study sheds light on an issue — the decline of small-town supermarkets — that has grown as population and economic growth in some rural regions has stagnated.

Just two months ago, the only grocery store in the Iron Range town of Aurora — Zup's Food Market — was shuttered, the latest casualty. Aurora has been struggling since 2001 when a nearby taconite plant closed permanently, while over the past year the entire iron ore industry has been mired in its worst downturn since the 1980s.

Between 2000 and 2013, outstate Minnesota lost 14 percent of its grocery stores, according to the Center for Rural Policy and Development in Mankato. The new U study indicates such trends will likely continue.

The study is based on 175 responses from grocers in Minnesota communities with populations under 2,500. The survey was conducted between July and October 2015, by the U's Regional Sustainable Development Partnerships and its Center for Survey Research.

The survey found that 62 percent of grocers intended to own their store for 10 or fewer years, and at least 71 percent said they "did not have a plan to transition their business." In other words, they had no successor lined up to take their place.

"Rural grocery stores are a Main Street anchor that once closed are very difficult to reopen," the study said.

Small-town grocers typically own their buildings, but 43 percent of rural grocery stores are in buildings that are more than 50 years old, the survey found.

Meanwhile, more than 90 percent of grocers surveyed said their three biggest challenges are competition with large chain grocery stores, high operating costs and narrow profit margins.

"With aging buildings and thin profit margins, I'm concerned that we will see a continuation of and worsening of our loss of small-town grocery stores," said Kathryn Draeger, a co-author of the report and statewide director of the Regional Sustainable Development Partnerships.

Almost all rural grocers — 92 percent — indicated that they sell fresh produce, and not just to consumers. Restaurants, nursing homes, hospital, schools and day-care establishments are all major customers. Rural grocers also serve large areas: 28 percent of them have customers who travel 30 miles or more to shop at their stores.

Mike Hughlett • 612-673-7003