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Neil Doty speaks to a group of grocers about North Dakota food distribution system at a meeting in Mandan on Thursday.

TOM STROMME, Tribune

Small-town grocers from across the state met in Mandan on Thursday in hopes of working together to help one another stay in business.

Hope is what brought the grocers together, said Lori Capouch, who works with the North Dakota Association of Rural Electric Cooperatives' Rural Electric and Telecommunications Development Center as the association's rural development director.   

The development center provides technical assistance and grant-writing services.

Capouch said the center began getting more requests from grocers for grant help with operating costs and equipment repairs. The center's staff began to think this may represent a shift in the industry and stepped in to help.

NDAREC gathered data through a North Dakota Independent Grocer Survey, receiving a 45 percent response rate with 53 respondents. Results included:

  • Respondents were in the grocery business for an average of 17 years, with the groceries they operate being in business an average of 40 years.
  • 71 percent of respondents have one store.
  • 93 percent operate near other groceries.
  • Respondents were an average of 49 miles away from a major chain grocery.
  • 62 percent of respondents reported weekly sales greater than $20,000; 10 percent reported sales between $10,000 and $20,000; 17 percent had sales between $5,000 and $10,000 and 12 percent had less than $5,000 in weekly sales.
  • 62 percent of respondents expect sales to increase over the next three years; 20 percent expect stable sales; 18 expect a decrease.
  • 25 percent said meeting distributors' minimum order requirements was a problem.
  • People shopping out of town, competition from chain stores and availability of labor were the three main problems listed by respondents, followed closely by high operating costs.

With this information, the Development Center staff hopes to empower grocers to work together.

According to the survey, 52 percent of respondents think a statewide alliance of small, independent grocery stores may have value. By aggregating information — things like what products they order and how much they purchase — grocers could partner to attract a more affordable supply of groceries and make distribution more efficient.

Capouch said often distributors are crisscrossing each other in the state, stopping in one small town but not the next. Along with potential cost savings, Capouch said an alliance would offer networking opportunities.

"They have no way to talk with one another," she said of small grocers currently.

The grocers have small staffs but address the same issues as larger stores. Working together, they could share tips to improve. An alliance could also help increase awareness when new regulations arise.

"We're encouraged that we're not alone," said Shirley Roehl who volunteers, along with her husband Floyd, to help run the community-owned Star Grocery in New Leipzig.

Floyd Roehl said a lot of the time the store is breaking even or dipping into the red. Recently it had four freezers and one cooler go out, and staff had to apply for grants and ask for donations just to keep going.

"We want to survive," Shirley Roehl said. "When the grocery store is gone, the town really hurts."

It's especially important to New Leipzig where a lot of homebound older residents depend on the community store to deliver groceries to their doorsteps when they can't drive.

The Roehls are hopeful an alliance would allow them to work with stores in neighboring towns, rather than compete.

North Dakota State Director for U.S. Department of Agriculture Rural Development Ryan Taylor said he thinks the survey shows a fair bit of optimism from rural grocers that they will be able to keep going. What he sees is interest from operators on how they can make their business work better.

(Reach Jessica Holdman at 701-250-8261 or jessica.holdman@bismarcktribune.com)

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Business Reporter