North Dakota lawmakers seek solutions for decline of rural grocery stores

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State lawmakers on the interim Commerce Committee heard initial testimony on the study Monday, Aug. 12. A prior study by rural service cooperatives, grocery stores and food charities tied the decline of rural grocery stores to low sales volumes and difficulty in attracting certain suppliers and competing with larger stores in urban areas. So-called “food deserts” result when grocery stores close.

Since 2014, 30 full-service grocery stores have closed or are no longer full service out of 137 in North Dakota towns with fewer than 2,100 people, according to Lori Capouch, rural development director with the North Dakota Rural Electric & Telecommunications Development Center. She presented data from the prior study of rural grocery stores in North Dakota.

“Our rural retail businesses do not have the population base to generate the volume needed to be competitive with urban areas,” Capouch said. “As the retail sector continues to consolidate to achieve the best price, rural places are struggling to compete and losing ground.”

Sen. Shawn Vedaa, R-Velva, who’s run a grocery store there since 2003, said a potential solution could be pairing a grocery store with a hardware store or gas station to make a rural “one-stop shop” of sorts.

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But the issue deeply involves the support of communities, he added.

“I do think that there’s people out there that are starting to realize, ‘Hey, we don’t want to lose this,'” Vedaa said.

Sen. Jerry Klein, R-Fessenden, a retired, longtime grocer, said local grocery stores are “the backbone” of small towns, but “at the end of the day, I think we’re going to find out it’s going to be up to the communities.”

“I’m not sure what the silver bullet is,” he said.

Capouch posed the idea of collective purchasing and redistribution hubs, or a central warehouse for ordering food at higher volumes and lower prices. She also noted the state’s distribution system for emergency pharmaceuticals as a possible “partner.”

Rep. Mike Nathe, R-Bismarck, questioned the state’s potential role and what regulations or incentives might exist for food distribution. Capouch said using existing infrastructure could help, but it’s unclear what authority or policies state agencies have to help.

“If we can find a way to … collect it in one spot, cross-dock it and distribute it with something that’s already existing, we were just wondering if that was economically feasible,” Capouch said.

Awareness, rather than legislation, is likely to come from the study, according to Vedaa.

“Just ideas out there that maybe this will spring an idea in somebody’s head and maybe will save four or five rural grocery stores because of it,” he said.

The interim Commerce Committee will meet three more times, next in October, before the 2021 Legislature convenes.