Local Grocery Stores for Rural Communities

In 2018, CoBank partnered with the Food Co-op Initiative (FCI) to expand its outreach programs to rural communities that have lost, or are at risk of losing, their local grocery stores. The organization provides free training and technical assistance to groups working to form new food cooperatives.

“The grocery industry is extremely competitive,” said Stuart Reid, FCI’s executive director. “It can be difficult for small, rural stores to compete. But there is good evidence that community-owned stores can be successful, even in the face of competition. These stores can fill a niche by offering local products and focusing on community-specific needs. It isn’t necessarily easy, but it can work.”

One successful example is the Marmaton Market in Moran, Kansas. With help and guidance from FCI, residents of Moran came together to purchase their local grocery store from a sole proprietor who had been trying to sell it for more than six years.

It can be difficult for small, rural stores to compete

“Moran is a small community,” said Larry Manes, a retired educator who spearheaded initial fundraising for the project. “We have a population of 500 and many of our residents are elderly and low-income. The loss of their local grocery store would have been life-altering for these people.”

Manes and other community members worked hard to raise awareness and funding for the project. They formed a for-profit corporation operating under cooperative principles and sold shares/memberships. A combination of funding sources allowed them to purchase the market and its inventory and a grant from FCI let them hire Rachel McDonald, a general manager with experience in cooperatives.

“My background is in natural foods cooperatives,” said McDonald. “I was working at a food co-op in Fayetteville, Arkansas when I heard about this job. I personally believe in the power of the cooperative business model as a way to maintain food access in rural communities, so it seemed like a terrific opportunity.”

But the opportunity was not without its challenges.

At the time of the purchase, more than 20 percent of the store’s inventory was out of date and large, bulk-purchases by the previous owner left more than half of the shelving stocked with nothing but breakfast cereal and cake mixes.

Other problems included the need to replace several expensive coolers within the first few weeks of operation. But despite these setbacks, the market made slow but steady progress and began to lure back local customers.

FCI answered every question and provided us with materials explaining co-op management

Since taking the job at Marmaton Market, McDonald has spent a lot of time learning what the community wants and needs from its market. In response, she is working with local producers to bring more fresh, local food products to the store.

“Right now we offer local chicken and eggs,” said McDonald. “We buy home-grown tomatoes, pumpkins and watermelon when they are in season, and we’re working with other local businesses to see how we can bring their locally-produced goods into the market.

“The local angle is important,” McDonald continued. “It supports the economy, builds morale and creates a stronger local community.”

Both Manes and McDonald agree that FCI’s support has been invaluable throughout the process.

“When we started, we didn’t know the first thing about being a cooperative,” said Manes. “FCI answered every question and provided us with materials explaining co-op management. They were a terrific resource and really played a key role in helping us to save the market—something we feel is absolutely necessary for the survival of our community.”