How can small-town groceries compete with Wal-Mart?

 Dive Brief:

  • Four years ago, the arrival of a Wal-Mart Supercenter put three local grocery stores in Iola, KS out of business, forcing locals to drive up to 20 miles to buy healthy food, according to Yes! Magazine.

  • A public-private partnership with Allen County and G&W Foods finally brought a new grocery store to the town in October after a community petition.

  • Nearly one-fifth of rural supermarkets in the Midwest shut down during a recent four-year period, creating “food deserts," or areas lacking a full-service food store within a 20-mile radius.

Dive Insight:

Way back when Wal-Mart first came to town, shoppers saw the chain as a god-send. Unfortunately, the store’s lower prices and abundant supply of groceries and dry goods was bad news for conventional grocers, who slowly lost ground to the giant competitor.  

Some smaller stores have survived alongside big competitors by transforming themselves into chains like Fresh Market, which embrace high-end products rather than Wal-Mart’s deep discounts.

But this approach won't work in the majority of small-town America. Local grocers could expand into online ordering and delivery services to entice consumers, but this wouldn’t necessarily reduce costs. Stores could also embrace marketing campaigns that encourage the “buy local” movement, a growing consumer trend that bolsters area farmers and producers.

Filed Under: Grocery