How can the local supermarket be saved? This rural Kansas town of 1,000 has some tips for Chicago.

The Erie Market sets an example of how local grocers
 might survive. (Photo by Joe Barrett, The Wall Street Journal)

Facing lower profits and increased crime, many Chicago supermarkets are closing their doors. But some local governments are not giving up, and they've found a unique partner to help them learn how to open and run a municipally-owned grocery store -- the Erie Market in rural Erie, Kansas, pop. 1000, reports Joe Barrett of The Wall Street Journal.

"At the moment, things aren't going especially well. Erie Market, which the city took over in 2021, is losing money almost every month amid stiff competition from a Walmart 15 miles away and a Dollar General across the street. The store has slashed prices, cleared the shelves of expired items and put in a salad bar to try to bring more people through the door. But leaders aren't giving up." Erie City Council member Jason Thompson, a Republican who owns a trash-hauling business, told Barrett, "Without a grocery store, what are we going to do? It would kill this small town and it's hard enough to keep it alive as it is."

While Erie is one of few small towns to move to town-owned supermarkets, larger, more metro areas are also considering the idea. "Last month, Chicago, population 2.7 million, launched a study on the feasibility of opening a municipally-owned grocer to get more fresh foods and spur economic development in a number of mostly low-income neighborhoods," Barrett explains. "Chicago, which has lost six groceries on its South and West sides in the past two years alone, aims to take advantage of a new $20 million state fund designed to address what are known as food deserts across Illinois. Studies show that lack of access to fresh foods can have big impacts on health outcomes and rob neighborhoods and entire towns of economic vitality."

Having a municipally-owned grocery stores means an area can keep its local market even if it operates at a loss -- especially in the beginning. Ameya Pawar is a former Chicago City Council member and now a senior adviser at Economic Security Project, which will be working with the city on the economic feasibility study, including a planned trip to places like Erie to see how things work. Pawar told Barrett, "Communities and people in those communities deserve to survive and thrive. And, you know, that might mean accepting an operating loss for a grocery store."

Grocery stores have low margins, so earning a profit can be hard, but it can be done. "Less than 10 miles away [from Erie], the even smaller city of St. Paul, pop. 600, has run a successful city-owned grocery for about 16 years," Barrett reports. "Rick Giefer, who was mayor when the grocery store opened in 2007, said the town hadn't had a grocery store for 20 years and was facing the threat of losing its high school. City leaders thought a grocery would help keep the population in town. They reasoned that if they could sell water through a municipal entity, they could also sell food. . . . James Voorhies, who has run St. Paul Supermarket with his wife, Kelly, for about 10 years, says the business supports itself, including paying for new equipment. The city, he says, 'really doesn't have to do anything — they just oversee it.'"