Community-Owned Store Fills Space Vacated by Big Box

Discussion
Jul 22, 2009
George Anderson

By
George Anderson

Back
in 2005, Duckwall-Alco Stores decided it was going to close its store
in rural Clark, S.D. after determining the unit was not generating enough
profits to make it worthwhile to operate. While the move may have made
bottom line sense for the retailer, area residents were losing the only
store in town. Now, they were facing a 45-minute drive to get to the
nearest store to buy items for their everyday needs.

It
didn’t take long for residents in Clark to decide that long-distance
commuting to shop was not for them and they came together to open the
Clark Hometown Variety Store earlier this year. The store is owned by
the residents and none are allowed to hold more than three percent of
its outstanding shares, which are valued at $500.

The
Clark story is not unusual and is part of the growing community-owned
store movement in the United States, according to a report by the Epoch
Times
.

The Institute
for Local Self-Reliance (ILSR), an anti-big box group, claims there are
now nearly 300 community- or consumer-owned stores in the U.S. generating
annual sales in the neighborhood of $1 billion.

According
to the group’s Big Box Toolkit blog, “Community-owned stores are designed
by residents to meet specific local shopping needs. Most of those that
have opened thus far are downtown department stores that sell affordable
clothing, shoes, and housewares.”

Discussion
Questions: Do you see the community store movement growing beyond rural
areas to more populated suburban and urban locations? Are you familiar
with any consumer-owned stores and how do they compare with big box merchants?

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13 Comments on "Community-Owned Store Fills Space Vacated by Big Box"


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Doron Levy
Guest
Doron Levy
11 years 9 months ago

This is a great way to turn an empty eyesore into a functioning business. In terms of geography, I couldn’t see the downtown Toronto location of Eddie Bauer sitting empty for too long. This concept is reserved for the sticks and kudos to those groups for being to able to execute. The cardinal rule of retailing is: location, location, location.

Bill Robinson
Guest
Bill Robinson
11 years 9 months ago

This development in Clark is another sign of the increasing strength of local, community-focused retailers owned and managed by good-citizen neighbors. There are third drivers to this movement. First is the failure of big box and chain retailers to identify local needs and connect with their community. The second is the ability of local independents to establish something totally unique to the delight of their shoppers. A third driver is that many Generation X and Y-ers are less than impressed with the sameness of American culture.

George Anderson
Guest
George Anderson
11 years 9 months ago

There are a large number of food deserts across the U.S., particularly in urban areas. Community-owned stores seem a solution in areas where chains and independent grocers choose not to go.

David Livingston
Guest
11 years 9 months ago

I’ve seen a few community owned stores go up but they soon fail. They don’t have the finances and expertise to stay open. It’s a well meaning idea but if a smart businessperson can’t figure out how to make a store work, its unlikely that the locals will be successful.

John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
11 years 9 months ago
With a quick Google search over a dozen articles come up related to community owned stores. There are even associations that help promote what they call “localism.” Take a look at this web site for more details. The loyalty to the store must be extremely high since many of the residents own a share of the business. It also reminds me of how grocers use to learn about what they needed to carry through listening to their customers at the front door and at the register. This format makes it that much easier to get the right assortment since again the community owns to business. This format also creates a real opportunity for smaller/regional brands that struggle to compete with larger national brands for shelf space. I could see regional brands sponsoring little league teams, a local charity or other local community efforts that would be noticed by residents. I am confident these small investments in the community would help regional brands gain shelf space and build brand loyalty. National brands would have a much… Read more »
Warren Thayer
Guest
11 years 9 months ago

A lot of rural locations up here in Vermont rely on C-stores with gas pumps. Most mom and pop grocery stores have fiercely loyal followings, despite the most basic lacks in merchandising and operations, so they rarely close. When they do, the community sees it as a calamity. I’ve actually never even heard of these shopper-owned community stores (unless you’re talking a co-op, but this sounds like a different animal). My gut is that they’d work when there’s no alternative. I’d be a little surprised if many were able to thrive in urban areas.

Bernice Hurst
Guest
11 years 9 months ago

The clue is in the name–community–stores. Where there are communities, there should be stores. Not necessarily imposed by some great corporation hundreds or thousands of miles away but by people who are part of the community, understand its needs and feel strongly about its wellbeing. Although community is, to some people, an obsolete (if not obscene) term, there are still those with enough determination to see it as the future. And they don’t have to live in the sticks to make it work. Stores don’t necessarily have to be run by smart businessmen – if they were truly smart, they would realise that success includes being part of the community. Maybe that’s why many big boxes are closing down.

Len Lewis
Guest
Len Lewis
11 years 9 months ago

I agree most community stores don’t last long because of a lack of expertise. However, in many areas–rural and inner city locations, I see this as an opportunity for certain retailers. I think people at Aldi would agree.

Justin Time
Guest
11 years 9 months ago
While I love the community store movement, it’s not the panacea that cures all retail ills in a community. In my hometown, at one time, we had an A&P, Kroger, Star/Loblaw/BigD/DelFarm, a Giant Eagle, and a Thorofare supermarket. All closed and became other things. It did hold on to a Foodland which took over the DelFarm space. Then in 2003, the landlord for the Foodland decided to raise the rent substantially. The Foodland owner could not afford the new rent increase, and decided to close, leaving the community without a supermarket. The citizens and the local anti-poverty group acted to stop it by storming various council meetings. At the end, the non-profit got HUD Hope VI money to buy the building so that the Foodland operator could stay in the building. After stipulation that he make improvements, the lease became his, and the town kept their sole supermarket. Since that time, a second supermarket, a beautiful Aldi Food Market has opened in the community with help from the state. I see where PA, NY and… Read more »
Cathy Hotka
Guest
11 years 9 months ago

Consumer spending is down, and I’m guessing that it’s going to stay down. I’m not sure that we’ll ever see the kind of go-go spending we saw in the last 15 years. As a result, I would guess that some of these empty locations will be repurposed or razed. The US has been “over-stored” for too long to assume that dead stores will come back as live stores.

Ted Hurlbut
Guest
Ted Hurlbut
11 years 9 months ago

I see this as something that may have applicability in rural areas, but not much beyond that. Even there, the challenge is to make these stores four-wall profitable. Scaling the stores and their offerings to what can be sustained is the real challenge. Merely trying to replicate the departed retailer, which is a very understandable instinct, is likely to lead to real problems for the stores and their owners.

Shilpa Rao
Guest
11 years 9 months ago

Community stores are a good short-term opportunity in rural areas where big box retailers are shy to go. However, in times of economic turmoil, sustainability becomes the key issue. Typically these stores lack variety and advantages of economy of scale. Hence offering products at comparable prices becomes a challenge.

Also when big box competitors spurge up, even in a little remote vicinity, these stores would find it difficult to sustain. It’s essential for these stores to carve their niche, like some mom and pop stores which have loyal followings despite a big box store next door.

Ken Yee
Guest
Ken Yee
11 years 9 months ago

It sounds like this community-owned store is basically the only thing in town. Therefore, it should survive no matter what. It sounds like the big box store that left wasn’t making enough profit. Maybe it was making profit, but didn’t meet a certain threshold.

I’ve always lived in an urban area with endless stores all around. They meet every need and spread across every brand, franchise and price range.

That community store may survive, but I’d hate to see the variety and pricing. Every store I’ve been in that’s in isolation like that always has huge mark-ups and generally dingy interiors.

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