Cynthia K. Jaggi, MBA, Principal Economic Development Partners, LLC

Because Rural Grocery Stores Provide:  Economic Development Rural grocery stores are important economic drivers  Food Access They provide a primary source of nutritious and competitively priced foods  Important Community Hubs Rural grocery stores provide important local, civic and social meeting spaces Why Focus on Rural Food Retail? Why Focus on Rural Food Retail?

Because Rural Grocery Stores Are a Critical Small Business:  Grocery Stores are Resilient Even in economic downturns  Grocery Stores Provide Numerous Jobs Full time & Part Time  Grocery Stores Contribute Significant Local Taxes  Locally- owned grocery stores have a larger economic multiplier: SNAP & WIC – Every $5 spent in benefits generate $9 in local spending at the Rural grocery store Economic Development: Why Focus on Rural Food Stores?

Because:  8% of rural population (Approx.4.75 million people) in the U.S. are living in communities lacking access to healthy foods. (Policy Link; Food Trust, 2013)  Poverty: 20% of census tract is below poverty level.  Lack of Access: 33% of the census tract's population resides more than 10 miles from a supermarket or large grocery store. Healthy Food Access: Why Focus on Rural Food Stores?

Because:  Rural areas suffer the highest obesity rates in the nation  Rural grocery stores offer more healthy foods, at lower cost, than rural convenience stores  Prevalence of grocery stores in non-metro counties is inversely associated with incidence of obesity  Rural grocery stores are often distribution points for locally-sourced foods Healthy Food Access: Why Focus on Rural Food Stores?

Because:  They are sites where community bonds are created and sustained Meeting spaces Community events  Broad and creative Interaction takes place there  They are a setting for grassroots community and social engagement Community Hubs: Why Focus on Rural Food Stores?

Reality Check: 5 Steps for Establishing a Rural Grocery Store

STEP 1: Assessing the Market STEP 2: Getting Started STEP 3: Legal Requirements and Licensing STEP 4: Financing STEP 5: Marketing the Grocery Store 5 Steps for Establishing a Rural Grocery Store

Researching the Grocery Needs of the Rural Service Area is critical before moving forward  One of the most accurate ways to learn about the food needs of a community is to ask!  What does the community want?  What can it support?  The FEAST guide, developed by the Oregon Food Bank, provides a model for facilitated community conversations to support the development of strategies for improving local food options. Step 1: Assessing the Market

 Primary & Secondary Datasets Offer a Wealth of Information  Research Resources to identify the ‘potential grocery market’ within your area:  Primary Research: Website provides reports and resources on ‘Grocery Stores’ to understand the market, including industry analysis reports, compensation and salary surveys.  Secondary Research: Step 1: Assessing the Market

Conduct a Feasibility Study  Before starting any grocery business, it is necessary to know if it is feasible to invest both time and money into the venture. Conduct a Market Analysis  Once the feasibility study is completed, a market analysis should be conducted.  A market analysis consists of conducting a market survey and gathering information about the site location and the community support. This will allow the community to assess the market potential of the proposed store and select a site. IMPLAN Analysis to Understand the Economic Impact of Local Food System Initiatives Step 2: Getting Started

Chose a Business Model that Works for Your Community:  After assessing the potential market for a grocery store, it is important to consider the best store model to meet the grocery needs of the market.  The five most common business models include:  Independent ownership,  Community owned,  Cooperatives,  School based and  Hybrid. Step 2: Getting Started

Critical Components to a Successful Rural Grocery Store Start-Up:  Community and industry support  Consumer support  Quality of the business plan  Business growth patterns  Market niche  Board and management leadership  Finance  Competition Step 2: Critical Components for a Successful Start-up

Successful Collaboration for Hybrid:  Shared Perception of Need of Rural Grocery Store  Trust  Mutual Benefit  Stakeholder Support  Collaborative Leadership

Legal Requirements & Licensing:  Once the ownership option is identified, specific legal criteria and licensing requirements can be pursued.  Consult an Attorney for legal advice  Kansas State University offers guides to establishing a community owned store; an privately owned store; and a school based store. Visit their website at: Step 3: Legal Requirements & Licensing

Financing:  Finding the financing is an important ‘step in the process’ when developing a rural grocery store.  There are many financial resources for getting started. Step 4: Financing

Shifting Rocks  Capital Stack - ‘layering’ of funding/financing – Private investments & public funding  Fewer state and federal grants  Shift in priorities ◦ Focus on Jobs Created & Economic Impact  Less free or low-cost technical services  Grant and low-interest loan programs in flux  Credit rules are restrictive Step 4: Looking Under the Right Rocks

 When considering a new store or reviewing your market niche, it is important to have a business and marketing plan. Step 5: Marketing the Grocery Store Step 5: Marketing the Grocery Store

Elements of a Business Plan  Situational Analysis: Market analysis, SWOT & competitive analysis, market forecast, customer segmentation and market needs analysis.  Marketing Strategy & Plan: How will you market your grocery store to customers?  Sales Forecast: Tracking and analysis of actual vs. forecasted sales by product, market segment, etc.  Expense budget: Tracking and analysis of planned vs. actual expenses, labor, sales & marketing expenses. Step 5: Marketing the Grocery Store Step 5: Marketing the Grocery Store

Bring your ‘A’ game  Conduct a Market Analysis – Know your FACTS!  Gain an in depth understanding of your community’s grocery needs – What can you support and where are the gaps?  Have a blueprint for incentives ready to go  Choose the right location  Consider Leasing vs. Buying  Sustaining a Rural Grocery Store – Managing Cash Flow  ACT QUICKLY! How To Attract A Grocery Store

The most significant challenges facing Rural Grocery Stores*  Operating costs/utilities  Labor availability/costs  Competition with large chain grocery stores  Taxes and regulations  Lack of community support  Low sales volume * Rural Grocery Sustainability Project of the Kansas State University Center for Engagement and Community Development.

Keys to Success for Rural Grocery Stores  Distribution  Building consumer demand for  healthier  Consistency in measurement for comparisons  Establishing rapport with  stores and communities  Understand  shopping patterns – shift to local

Indicators of Economic Prosperity:  Level of vendor viability (for business prosperity)  Amount of product purchased from neighboring businesses (for prosperity of community economy)  Improved food affordability (for household prosperity) Indicators of Public Health:  Improved access to healthful foods  Increased access to nutrition education  Ability to bike and walk to rural grocery store Indicators of Social Interaction:  Diversity (race, age, gender) of vendors and shoppers  Capacity to convene gatherings of community  Neighborhood participation in market planning and governance.

THANK YOU! Cynthia K. Jaggi, MBA & Principal Economic Development Partners, LLC edpwi.com (608)