Tuesday, March 15, 2016

Survey: 34% of rural Minnesota grocery store owners expect to no longer own store in five years

More than one-third of rural grocery store owners in Minnesota don't expect to still own the store in five years, according to a survey by the University of Minnesota Regional Sustainable Development Partnerships and the Minnesota Center for Survey Research. The survey was sent to to grocery stores in Minnesota communities with populations less than 2,500. Of the 254 surveys sent, 179 were returned. Of those respondents, 34 percent said they intend to own the grocery store for five years or less, 29 percent said six to 10 years, 22 percent said 11 to 20 years and 16 percent said they plan to own the grocery for more than 20 years.

While 63 percent of owners said they do not expect to still own the business in 10 years, at least 71 percent said they have no transition plan. The survey also found that 28 percent of stores have customers who travel 30 or more miles to shop, and 61 percent said the nearest discount grocery store was 20 or more miles away, with only two percent saying there was one was less than 10 miles away.

More than 90 percent of grocers indicated that competition with large chain grocery stores (97 percent), high operating costs (95 percent), and narrow profit margins (94 percent) are major or minor challenges, and 29 percent cited competition with large chain grocers as the most significant challenge they face. A total of 84 percent of respondents said they own the building where the store is owned, with 36 percent saying they have owned the store for more than 20 years, 27 percent for 11 to 20 years, 12 percent from six to 10 years and 25 percent for five or fewer years.

Other major economic challenges "include high operating costs and narrow profit margins," reports the Brainerd Dispatch. "The majority of survey respondents have stores housed in older buildings, which can often require more upkeep. More than 44 percent of grocery stores operate in buildings 16 to 50 years old." Kathryn Draeger, the statewide director of the University of Minnesota RSDP, told the Dispatch, “With aging buildings and thin profit margins, I'm concerned that we will see a continuation and worsening of our loss of small town grocery stores."

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