Consolidation of groceries has greater impact in rural areas but some small-town markets find ways to survive

Cover of Economic Research Service report

The consolidation of groceries is greater in rural areas, according to a new study from the Economic Research Service of the U.S. Department of Agriculture.

“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 says.

"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," reports Jonathan Ahl of Harvest Public Media.

The report "shows the percentage of grocery sales from the nation’s top 20 retailers more than doubled from 1990 to 2020," Ahl notes. "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."

Ahl cites Sanborn Foods in Sanborn, Iowa, a a town of 1,400. Owner Scott Vogelaar "joined the Associated Wholesale Grocers, a co-op of small stories based in Kansas City. . . . He also works to differentiate his store through quality and service in particular departments," meat and produce.

"When the supermarket closed in Mount Pulaski, Illinois, a community-owned grocery store took its place," Ahl reports. "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 themselves from national chains several miles away, as well as the dollar store that opened in town."