Saving groceries by going public

The City of Erie saved its grocery story by buying it and running it themselves. It's been six months, and seems to be going well.

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September 2, 2021 - 9:26 AM

Megan Ewan is assistant manager at Erie Market, the city-owned and operated grocery store in Erie. “I love the customers,” she said, and since becoming a city employee, now enjoys health insurance and KPERS retirement. Photo by Trevor Hoag / Iola Register

How do you save a town’s grocery store?

The city of Erie’s solution was to buy it and run it themselves.

CINDY LERO, Erie city clerk, began the process by noting the building currently housing Erie Market was “relatively new,” since it had been rebuilt by the previous owners following a flood.

“There were not many options on selling it, because it was a newer store,” Lero said. “It would take more money to purchase it,” and buyers weren’t coming forward.

Erie Market grocery store and deli is owned and operated by the City of Erie.Photo by Trevor Hoag / Iola Register

The owners therefore approached the City of Erie, because they had heard of other cities successfully operating stores of this kind.

The city was receptive, but didn’t want to move forward without doing their due diligence, especially because “running it as a mom-and-pop is a lot different from running it from a city standpoint.”

“It would be set up and run similar to a utility, because that’s what we know how to do,” Lero observed.

“We weren’t out to make a lot of profit,” she added. “It was just basically to even out, and provide a service for the city.”

ERIE’S ECONOMIC development committee also took a deeper look, specifically at numbers spanning over the past three years.

“The economic development people said it could support itself,” Lero recalled, and so the ball again moved forward.

But the city really wanted to ensure that there was public support for the project, “so they went a step further. They decided they wanted to poll the people somehow.”

Megan Ewan is assistant manager at Erie Market, the city-owned and operated grocery store in Erie. “I love the customers,” she said, and since becoming a city employee, now enjoys health insurance and KPERS retirement.Photo by Trevor Hoag / Iola Register

With the help of K-State Southwind Extension District, the City of Erie developed a survey to send out to all utility customers.

It not only told residents what was being proposed, it stated: “if this [grocery store] does not support itself, you might have a charge on your utility bill to help keep this running. Are you in favor of that?”

In short, “the majority of the people said yes.”

“Of course you’ve got the nay-sayers,” noted Lero, “but overall, I think people didn’t want to lose it.”

Moreover, “during the pandemic, it really came into focus: what if you didn’t have a grocery store? How would you help the older people who didn’t want to travel to places like Walmart?”

ANOTHER KEY ingredient in getting Erie’s city-run store moving was a $480,000 grant from the USDA Rural Economic Development Loan and Grant Program.

Essentially, the USDA provides zero-interest loans and grants to utilities that then lend funds to local businesses for projects that retain employment in rural areas.

“With a 0% loan, that really helps the overall aspect of this,” observed Lero. The city has 10 years to pay it back.

The dollars were spent primarily for facilities, fixtures and inventory.

“Of course, we’ve applied for tax exemption status, for real estate, too,” Lero said.

Nearby St. Paul Market is another grocery store owned and operated by a city. It was owned previously by an investment group.Photo by Trevor Hoag / Iola Register

LERO LIKEWISE pointed to quality employees as being key to the project’s fulfillment.

“Part of the success,” she said, “was we went pretty far and wide across the state of Kansas, hoping to find a good manager.”

“The lady we hired was well-received. She has a good background in the food industry,” noted Lero. “Management makes a lot of difference.”

The City of Erie was also able to retain the grocery store’s existing employees, as well as hire five additional folks for a total of nine jobs.

SIX MONTHS into the city’s ownership, and following a grand opening in June, things seem to be progressing nicely, said Lero.

“We’re cautiously optimistic. That’s what I like to say. … We really won’t know until we have a year to compare numbers, but it looks like things are going along well.”

“We definitely had to ‘feel our way’ to begin with,” she smiled. “There was a learning curve, that’s for sure.”

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