General Merchandise/HBC

Gas Prices a Boon to Rural Stores?

Small grocers face "very fragile" environment
PEORIA, Ill. -- The rising price of gasoline may slow down the overall economy but it might be a benefit to rural grocery stores, according to a report in the Peoria Journal Star.

"When gas prices rise, people tend to stay closer to home," said David Procter, a professor at Kansas State University and director of the school's Center for Engagement and Community Development, in Peoria last week for the Rural Community Economic Development Conference.

When Kansas State started the center in 2006 to do outreach work in the community, the rural grocery was one [image-nocss] of the central issues, he said, according to the report.

"It became apparent that the rural grocery was a major issue, not just in Kansas but across the country," said Procter, who offers a website--www.ruralgrocery.org--that provides assistance to small-town stores.

"What we've found is that the grocery store doesn't just represent another business. The store provides fresh fruit and vegetables, for example, that people will go somewhere to find. In some cases, people will travel quite a distance," he said.

"We noticed when gas prices rose in 2008 that people stayed closer to home," said Procter.

Gas prices notwithstanding, small-town groceries have a tough road ahead, according to the report. "It's still very fragile. A lot of stores are on the edge. It varies. But some stores are doing amazing things," said Procter.

The competition for the small grocery comes from the big box store, he said. "Big boxes are spreading into smaller communities. Here in Manhattan, Kansas, a town with a population of 50,000, both Wal-Mart and Hy-Vee have entered the market," he said.

The center counted 213 rural grocery stores in Kansas in 2006. By 2010, 82 of those stores had closed, said Procter.

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