A pair of grocers discussed challenges facing their industry at the recent Minnesota Ag and Food Summit hosted by the Minnesota AgriGrowth Council.
Emily Coborn, a fifth-generation grocer, is vice president of operations for Coborn's, which has locations in Minnesota, Wisconsin, Iowa, North Dakota and South Dakota. The business includes warehouse and distribution, grocery stores, liquor, pharmacy and convenience stores.
Craig Thorvig, who learned his math skills counting change from pop machines at the family business, is a second-generation grocer and president of Chris' Food Center, with two supermarkets in Minnesota, one in Sandstone and another in Pine City.
Though the sizes of their businesses vary, they talked about common challenges, including insurance, business costs, labor, competition and stocking what consumers want.
A summary of their discussion follows:
Competition. Grocery stores not only compete with each other, but also with dollar stores and larger convenience stores with significant deli space. Thorvig said that towns with populations of 2,000 people or less without a thriving grocery store are unlikely to retain one in the future. Longtime small-town members are loyal to small-town businesses, he said, but newer residents are not. Business loyalty has changed over the last 10 to 15 years.
Coburn said it's the competition from discount retailers that have emerged in the last decade that are the toughest. “When we're 10 cents higher on milk, we hear about it,” she said. “We do see loyalty in our markets, and it does still matter that you're giving back and that you're investing in the community.”
Investing in their communities is important, the two agreed, because it's essential to have a strong community to support the business.
“Both in Sandstone and Pine City, we have smaller organic stores that are in town, and so I try not to step on their toes too much with organics,” Thorvig said. “I need those other businesses to survive in order for our towns to thrive. It isn't just about our viability; every business in town needs to be viable to make our whole town successful.”
Customer tastes. In Little Falls, Coborn's remodeled its store and brought in Caribou coffee and sushi. Coburn was skeptical, but local management was persistent, and the two items have been performing well in the market.
The perception of remote rural markets with contracting populations is evolving as those shoppers want to enjoy life.
Coburn has seen a definite boost in sales from items that are endorsed by the company's dietitians as consumers look for healthy options. Also, shoppers are concerned about animal welfare and sustainably sourced products.
Local foods have been winners for both stores. Thorvig said he purchases local apples, pumpkins and squash, leveraging the Minnesota Grown program.
The Minnesota Grown emblem means a lot to Coborn's shoppers, Coburn said.
Partnering with growers. Bringing local growers into the store not only is a boost to the stores, but also allows growers to connect with consumers and answer questions. Thorvig has beef producers in the store each July as people want to know where their food comes from.
Coburn said she wants to grow this partnership. Recently, Coburn's dieticians visited a dairy farm and were able to clear up many myths using social media after their visit. Their weekly paper ad is their invitation to get people to the store, but social media and digital media are how they want to tell stories.
Coburn would like to find new ways to partner with local growers to share their stories, including taking employees to farms to learn more about food production.
Labor. Over the last couple of years, they've had solid retention and low turnover, Coborn said. Their deli departments are the toughest to staff and the most demanding areas to work. It is also sometimes difficult to recruit employees with specific skills, such as a meat cutter or cake decorator.
They are leveraging technology on activities that take employees away from engaging with customers, for example, integrating an automated temperature measuring system in the deli.
The western part of North Dakota is the most difficult area for them to recruit employees.
Thorvig has five distinct employee groups: teens, retirees who want to stay engaged, full-time adults, part-time adults who work for the extra cash, and adults with disabilities. He has about 125 employees.
Employee insurance. Health insurance is a challenge, Thorvig said. Federal law establishes 30 hours a week as full time, and they have employees who have to work fewer hours than they'd like in order to qualify for state health insurance. Financially, it doesn't make sense for them to work more based on insurance coverage, he said.
At Coburn's, they are focusing on safety to avoid preventable injuries and to reduce worker's compensation insurance costs.
“Our industry is one that has historically been known for providing rich benefits,” Coborn said. Coborn's is striving to honor that tradition.
Willette is a Farm Progress digital content creator.