By Chelsea Matzen, Project Manager, NGA Foundation
Small rural groceries and corner stores in cities may strike up very different mental images but they both face a similar problem: distribution.
Tiny neighborhood stores often don’t have the economies of scale to efficiently work in a traditional manner with wholesalers. One solution that these small retailers are starting to pursue is cross-docking or group purchasing with a larger, more traditional grocery store that already has an established wholesaler relationship.
Cross-docking or group purchasing is when a traditional grocery store makes orders on behalf of a corner or smaller store and keeps the product in their stock until the smaller store can pick it up. The ordering store may or may not charge a small markup for this assistance.
An essential part of cross-docking for these small retailers is keeping prices similar to traditional grocery stores, allowing for affordable options to the community. Typical convenience store suppliers, while allowing smaller purchase minimums, often include a higher price point, which is then passed on to the customer.
One partnership currently leveraging this model is Carver Neighborhood Market in Atlanta and Wright’s Market in Opelika, Ala. Carver is located in a South Atlanta neighborhood that struggled to attract a more traditional grocery store but the community needed access to affordable food. Wright’s Market stepped in, ordering products on behalf of Carver and originally even drove the product to Atlanta in its delivery truck, a move Carver now does itself.
These cross-docking models work for the larger, more traditional grocery store partner because they are working with a store that is not competitive with their market. For example, Carver and Wright’s are located roughly 100 miles apart. Sean Park, a manager with the Illinois Institute for Rural Affairs, recommends stores need to be at least 30 minutes’ driving distance apart for partnerships to work. Through these partnerships, a store can help a fellow retailer, help an area community and not threaten its own business.
Another partnership is between Great Scott Community Market in Winchester, Ill., and County Market in Pittsfield, Ill.. While Great Scott Community Market can get most of its produce and meat from local farms and ranches due to its rural setting, it still needs the basics that make up the average customer’s run to the store for dinner. By working with County Market, it’s able to shelve products like canned goods, dried beans and pasta with a weekly pick up.
By leveraging cross-docking, small rural groceries and corner stores can compete with dollar-store chains and other markets that have been forcing traditional groceries out of towns through offering fresh product that is affordable for their community.
This availability of fresh product and stores that offer it is important for more than just the economy, but for fighting hunger. In 2019, 13.3% of all people in rural areas and 10% of all people in urban areas lived below the poverty line. Maintaining accessible stores with healthy foods in these rural and urban environments is essential in fighting hunger. These small rural groceries and corner stores are excellent candidates for nutrition incentive programs as they are community focused and offer accessible produce.
If you are interested in learning more about the developing field of cross-docking, wish to share your own story of partnership or would like to learn how to start a nutrition incentive program, please reach out to firstname.lastname@example.org.
*The NGAF TA Center addresses the challenges grocers and supermarket operators face in establishing nutrition incentive programs and is a proud partner of the Nutrition Incentive Hub. The Nutrition Incentive Hub, funded through a cooperative agreement from the United States Department of Agriculture, National Institute of Food and Agriculture, is a new resource that provides training, technical assistance, reporting, and evaluation for those working to launch or expand SNAP incentives or produce prescription programs. The Nutrition Incentive Hub is led by Gretchen Swanson Center for Nutrition in partnership with Fair Food Network along with a coalition of evaluators, researchers, practitioners, and grocery and farmers market experts from across the country dedicated to strengthening and uniting the best thinking in the field to increase access to affordable, healthy food to those who need it most.