Dollar stores squeeze rural grocery stores

Honor Family Market photo by Aubrey Ann Parker / Betsie Current

How Empire could change its zoning to protect against small box retailer incursion

By Jacob Wheeler

Sun editor

Among the biggest stories of 2019 has been attempts by dollar stores to gain a foothold in Leelanau County. Zoning regulations and citizen opposition in Kasson Township stopped a bid in Maple City this spring; then Empire instituted a 6-month moratorium on new commercial development on July 17 to prevent a contractor that works with Dollar General from purchasing land in the village.

Landowner Tom Tater received a purchase offer from Midwest V, LLC, for six acres in a mixed-use, commercial-residential district one block southeast of the M-22/M-72 intersection. Tater told the Glen Arbor Sunthat septic requirements prevented him from building an adequately sized restaurant on that land 10 years ago. He hoped to call it “Clancy’s”—after a restaurant of the same name he ran in Interlochen from 2004-2010. (Ida Clancy homesteaded that land in Empire.) But Tater concluded that the eatery he was ultimately permitted to build would have been too small to turn a profit. So his land sat empty.

“We could have had a restaurant if Empire had a municipal septic system,” Tater lamented.

Mired in a passionate, and at times acrimonious, debate about whether to invest in village-wide septic, Empire now faces another existential crisis—how to keep out corporate box stores that critics say could dramatically alter the town’s character and could hurt the business of local mom-and-pop stores.

Fighting to stay in business

Small-town business owners in nearby Benzie and Manistee counties offer a cautionary tale about dollar stores.

The Schneider family opened Copemish Family Market on M-115 in 1980 and Honor Family Market on US-31 in 1992. Both grocery stores have become fixtures in their communities. But when a Family Dollar opened next to their store in Honor, and a Dollar General opened half a mile from their Copemish location, the volume of sales in each store took a hit.

“When they came in, it took us down to the break-even point,” said Pat Schneider. “It hurt us considerably.”

The family eliminated excess inventory and slashed their supply of paper products, which the dollar store could sell at a lower price because the corporate giant controls its own supply chain.

The Schneiders upped their game in other ways. “We’ve promoted our meat department, our produce and our bakery,” said Pat. “We’ve expanded our beer, wine and liquor selection, because Family Dollar can’t sell those things. We stress service, service, service.”

For years, Honor Family Market has partnered with Taste the Local Difference, Michigan’s local food marketing agency, to offer locally-grown, healthy fruits and vegetables.

“We’re all about doing things local. A lot of people who support us are community-minded,” said Pat. “Still, where we used to do a certain amount of business on a busy day, we don’t do that anymore.”

Throwing in the towel

When Kaleva Meats owner Dave Barrett learned that a Dollar General was moving in three blocks away in early 2019, he closed shop last December—before the bloodletting would begin. “I had Kaleva Meats for 11 years, but I got tired of putting money into it. The dollar store would have taken 25 percent of my business. I’m done fighting.”

“If people start seeing what impact (dollar stores) have, the tax breaks they get,” Barrett said, “I recommend that a town get an ordinance in place to stop them. People that have ordinances against corporations like that seem to thrive.”

“We need the old time back, when a town has a grocery store, a church, and a hardware store.”

Barrett now works for the Schneiders as the meat cutter at Copemish Family Market.

And in Mesick a Dollar General opened in July, right next to a Family Dollar, which arrived three years ago. Kathy Stanley, the manager at Mesick Market, is worried about how the twin dollar stores will impact their sales.

“I don’t know why they need to have twodollar stores,” she said. “This is a small community. There are only so many pieces of the pie.”

Stanley said their biggest losses have been sales of paper products, pet food, health and beauty aids, all of which the dollar stores can sell at cheaper prices.

“We’ve been told that a year from now the Dollar General will sell produce. We’re trying to boost our meat and deli items, our produce and deli departments. Those are our key areas for survival.”

Dwindling food access in rural towns

Locally-sourced, fresh fruits and vegetables, and other nutritious foods can be difficult to find in rural northwest Michigan. As dollar stores gobble up grocery stores, the only food left behind on shelves is typically processed and prepackaged.

In late June the Michigan State University Center for Regional Food Systems published a report titled “When Healthy Food is Out of Reach: A Food Access Survey in Northwest Lower Michigan”. The report surveyed food pantry users in rural Benzie and Antrim counties and found that about half of those surveyed shop for groceries at dollar stores

Price is a consideration for them, but so is lack of access. Approximately 16 percent of people reported traveling over 30 minutes to buy food and almost half relied on rides from family or friends in order to reach groceries. People reporting inadequate access to food that meets their needs were more likely to be traveling at least 30 minutes to reach a grocery store.

One key recommendation made in the report was for dollar stores to increase the healthy food choices they offer. But there is scant evidence of these discount stores stocking anything but processed food.

Empire strikes back

As Empire struggles with its own lack of a grocery store—after Deering’s Market closed in the spring of 2018—and deals with the septic debate, it must reach a decision on whether to ride out the moratorium on commercial development or draft new zoning policy that would prevent a dollar store or other corporate discount chain from moving into the neighborhood and affecting the business climate. 

The current 6-month moratorium could potentially hurt local businesses, such as Grocer’s Daughter Chocolate or Shipwreck Café, from expanding and thriving. It could also inadvertently scare away potential suitors to reopen Deering’s Market or develop Jim Bagaloff’s old hardware building into a restaurant and brewery.

A refined zoning policy could establish a maximum floor space of 5,000 square feet or less in the commercial district for new developments or structures (dollar stores are typically 8,000-9,100 square feet). The village currently has no commercial building size limit.

Alternatively, the village could separate the current T-shaped commercial district into two separate districts: a highway corridor commercial district and a village core commercial district. The two districts would be different in nature, but would both remain pedestrian-friendly, according to Empire’s Master Plan.

Either way, Empire’s internal conversation isn’t just about keeping out dollar stores. It’s about a vision for the future of the village.

“It’s all about the public safety, health and welfare of the village,” said Village president, and native, Soni Aylsworth, who owns the outfitter Empire Outdoors. “That’s why the moratorium was put on. This isn’t about Dollar General, it’s about the village.”