Solutions: Community-owned Stores

I’m a big believer that anyone who says things should be different has an obligation to provide positive alternatives. Even in the best of times, mere complaining does little to solve the problem. And when things get interesting – like they are now – having some positive suggestions can make a big difference in keeping people’s spirits up. When things get really bad, having a clear idea of how things could be better can make the difference between getting people to work together, and allowing people to slip into a counterproductive spiral of freaking out about how bad it is and how much worse it’s going to get.

So for the next little while, I’m going to be coming up with some alternatives. These are not just warm fuzzy fantasies that I’ve cooked up, but actual models that have helped people to work through hard times. Sometimes I’ll address situations that are worse than what’s happening, and I hope that doesn’t come across as doom and gloom. If anything, I want to encourage my readers that even if things do get that bad, there are ways to deal with it. Under no circumstances are we helpless.

My first example is one that is already underway in rural communities in the US. These places have already been feeling the pain that is now becoming widespread in our economy, so they have a lot to teach us. It is not hard to imagine that various chain stores will choose to close their less-profitable branches, which will tend to be in rural and less-affluent urban areas.

Across the western US, small towns are struggling with economic changes. Many of these communities have experienced declining economic bases. This decline is often incremental, but there are certain milestones of decline that are of special concern: When a town loses a key commercial institution, such as its grocery, department store, bank or doctor, there are several impacts in addition to the obvious loss of jobs and tax revenues.

There are two movements that may be of interest to small communities facing the loss of such a key business. In Montana and Wyoming, towns faced with the loss of department stores, usually owned by a chain, are launching community investment drives to take over these stores. And in the upper Midwest, there are a several small communities which have replaced a privately-owned grocery store with a consumer-owned cooperative. I would also like to briefly note that many small towns in Canada have opened cooperative clinics when faced by the loss of their town doctor, but that’s a story for another time.

In many cases, the communities faced with the loss of their department store approached other chains, in an attempt to lure them in. This was generally not met with success, since many of these regional and national chains are only interested in locating a new store where there is a fairly large and growing population.

Some communities have responded to the lack of outside interest by forming a community-owned corporation to operate the store, sometimes with the same management personnel as before:

· Plentywood, Mont., Little Muddy Dry Goods

· Malta, Mont., Family Matters, organized after closure in 1998

· Powell, Wyo., Powell Mercantile, opened in 2002

· Glendive, Mont., opened in 2003

· Worland, Wyo., Washakie Wear

· Ely, Nev., Garnet Mercantile opened late 2004

· Rawlins, Wyo., was selling stock in late 2004

While each of these stores is an independent business, they offer each other support in organizing, and have set up some group purchasing arrangements, to help them get access to suppliers that have high minimum order sizes.

And they have not stopped with helping each other: They have already expanded beyond their geographic core, with the opening of the store in Nevada. As of spring 2005, Middlebury, Vermont, and Greenfield, Massachusetts are also exploring this option for dealing with the loss of a department store. Managers at the Powell Mercantile and Washakie Wear have also visited with representatives from Riverton, Torrington, Douglas, Rawlins, Gillette and Sheridan; and by people in Iowa, Nebraska, Pennsylvania and New York.

Another town that explored and later adopted this approach is Ely, Nev. As the Reno Gazette-Journal reported (11/13/04), once Ely officials visited Powell, they returned knowing what to do.

“That was a major turning point, that clearly that was the answer for Ely,” said COMP President/CEO Philip D. Leibold. “It would bring the town together.”

Grocery cooperatives have been launched to preserve food access in the following towns:

· Root River Market Cooperative, in Houston, Minn. (includes a pharmacy)

· Harvest Market, in Barneveld, Wisc.

· Viroqua Food Cooperative, in Viroqua, Wisc.

Community takeovers of closing stores have been inspired by the need to hold off economic losses, but they may also prompt economic gains. While keeping a store open, sales up, and people working is certainly important; community ownership can dramatically change the equation in a positive direction.

When a store is owned by outside interests, the profits tend to flow out of the community, often back to the headquarters of a chain. On the other hand, when the store is community-owned, that profit stays under local control and can be invested in further economic development. By building community ownership into the organizational structure, through cooperative structures or limits on the number of shares which any person can purchase, these stores have safeguarded their future. And because they don’t need to satisfy outside investors, these stores can operate at minimal profit margins.

There is no guarantee that they will still succeed, but their chances are better and whatever happens, the decision will be made locally.

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