An August 18th article in the Lincoln Journal Star highlighted the future of a Utica, Nebraska grocery store faced with the possibility of closing, marking the first time since 1884. Reasons for the closing include, “the hike in the minimum wage, a 5% surcharge imposed by the store’s wholesaler when weekly purchases fall below $9,000, and the proximity of supercenters in nearby Seward and York.” Blake Schwartz, manager of St Paul’s Hometown Market understands, “The grocery store business is a difficult business to be in, I don’t think people realize…The margins are so small.” Currently, Hometown Market does not face a similar warehousing surcharge and was ready for the first incremental increase in the federal minimum wage to $5.85 per hour effective July 24, 2007. “We weren’t too affected by it, we knew that this was coming and we were prepared for it.” Schwartz said.
The one thing Hometown Market shares with the Utica store, however, is the nearby location to a supercenter. Such “big-box” stores have often delivered a deathblow to retail outlets in rural communities, by offering goods at such reduced prices that some small-town businesses just can’t compete with. Usual tactics for keeping customers at home include successful campaigns that illustrate the benefits of “shopping at home” and “shopping locally vs. money spent for fuel”.Another tactic, utilized by Schwartz himself, are educational classes geared toward doing business differently than the supercenter, based upon creating a unique shopping experience and stressing individual service.
“We want to get people excited about coming to see us” Schwartz said. Promotional ideas like store punch cards, farmer’s markets and hot dog lunches, according to Schwartz, have been thoroughly enjoyed by customers. The latest promotion, to be unveiled shortly, is the REGISTER TAPES FOR EDUCATION program, in which area schools can earn free educational equipment by accumulating register tapes. “It’s a win-win for everyone involved,” said Schwartz, “Anyone can return their Hometown Market receipts to the school and the school adds up the totals from the receipts collected and can order the free equipment from the catalog.”
While the future of grocery stores in some rural communities is in question, Schwartz feels confident about the future of the Hometown Market. “The addition of new businesses and street improvements has been a real positive impact for Hometown Market, we continue to see new customers. St Paul is a good community to live and do business in.”
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