The town of Honor, in northern Michigan, doesn’t have many places to shop for food. The only grocery store in town is Honor Family Market, one of a growing number of independent grocers left in the United States.
Because it is the only market in town, it has a big role in this community of 330 inhabitants. The 12,000-square-foot store, its shelves stocked with local products like honey, baked goods and homemade bratwurst, isn’t just a place where people — in Honor and elsewhere in Benzie County — go to buy meat and produce. It’s also where they can go to get free — or at a reduced cost — food and supplies for community events like football games or the annual National Coho Salmon Festival in the summer.
The store has nine full-time and nine part-time employees, and hundreds of Honor High School students have taken their first jobs there, mopping the well-worn linoleum floor, stacking groceries in the narrow aisles or stacking bags in the three checkout lanes.
The store is “primary to a healthy, living, breathing community,” said Ingemar Johansson, a resident and president of the Honor Zone Restoration Project, a nonprofit business development group. “Everyone shops there. You run into someone you know every time you go.”
Honor Family Market’s place in the community, however, is more uncertain now than it has ever been since the four siblings who own the market bought and took over the business in 1992. Tim Schneider, Patrick Schneider, Marilyn Edginton and Helen Schneider, who all work in the market year-round, are now in their 60s and 70s and ready to retire. They hope to keep the grocer independent, a difficult task during a time of industry consolidation that has driven up food prices.
Keeping it independent requires a buyer who is willing to not only take on the tight confines of a small business, but also compete against giant chains. Already, there is a chain next door, the Dollar Tree, with which Honor Market competes for the sale of toiletries, paper goods, detergents and food.
These challenges have made it difficult for Schneiders to find a buyer. Since putting the grocery store, now listed for $1.1 million, up for sale in 2021, they’ve hired and fired three real estate agents, and the only potential buyer didn’t show up at closing in 2023 due to lack of funds.
Their story is echoed by other small businesses that have felt the blow of powerful winds in and out of northern Michigan, including consolidation in the grocery sector, tight lending to low-margin businesses, the difficulty of selling small businesses in rural towns and competition from discounts. chains known for undercutting local grocers.
From 1990 to 2015, the number of independent grocery stores in the United States fell 39 percent, to 2,648, with an average of 30 store closings a year, according to a 2021 report from the U.S. Department of Agriculture. That suggests there are roughly 300 fewer stores today than in 2015. Almost all operate within tight confines in a hypercompetitive, $846 billion industry in which a significant portion of all grocery sales go to just four companies: Walmart, Kroger, Costco and Albertsons.
“It’s a big challenge,” said Rial Carver, who directs the Rural Grocery Initiative at Kansas State University. “Rural malls are at a competitive disadvantage with supercenters and discount retailers. If you’re operating with net profit margins of 1 percent, there’s no room for error.”
Curtis D. Kuttnauer, managing director of Golden Circle Advisors, a Traverse City-based investment bank that specializes in selling small businesses, said that “three-quarters of all businesses put on the market don’t sell.”
“What makes rural businesses harder to sell is that most have to be operated locally,” he said. “Being rural limits the buyer pool.”
There’s also the question of how the new ownership might affect city residents. If the store is bought by a larger chain, this could lead to higher grocery prices.
The Schneiders know firsthand how consolidation affects prices. The number of wholesalers serving their food in the 1990s has dwindled from seven in the region to one in Grand Rapids, owned by Spartan Foods, which owns and operates two Family Fare chain stores in Benzie County and 79 convenience stores. other grocery stores in Michigan. . Honor Market is a prisoner of its prices.
“Walmart doesn’t want to sell to me; Meijer only makes its own stores,” Mr. Schneider said, referring to the Midwest grocery chain. “Spartan is pretty much it.”
Industry concentration, economists have said, was allowed to happen largely by decades of lax enforcement of antitrust laws, particularly the Robinson-Patman Act of 1936, which prohibits price discrimination that could wipe out competition in an industry.
“For nearly the next 50 years, the Federal Trade Commission vigorously enforced the law,” said Stacy Mitchell, an expert on monopolies and a co-executive director of the Institute for Local Self-Help, a nonprofit group that provides technical support to communities. . for sustainable development. “For all those decades, the market structure was about half independent grocery stores and about half chains.”
But that began to change in the 1980s, when the FTC “suspended enforcement,” Ms. Mitchell, because the Reagan administration and several other administrations that followed saw improving efficiency with larger groceries as a priority over ensuring competition.
That’s when the Schneiders bought their first grocery store, in 1980, in Copemish, an equally small town 20 miles south of Honor. The siblings had learned the grocery business from their father, Leroy Schneider, a supermarket manager in northern Michigan. They bought the store in Copemish for $175,000 and the one in Honor in 1992 for $400,000.
After managing Copemish Grocery for 41 years, the siblings, eager to retire, put both stores on the market. Unable to attract a buyer to Copemish, Schneiders closed the 15,000-square-foot store but retained ownership of the building, which now serves as an auto storage center for Crystal Mountain Resort, the county’s largest private employer.
They have encountered similarly poor interest in the store in Honor, but despite the challenges, Marilyn Edginton is confident the Honor store will have a different outcome to the one in Copemish. The reason: Economic viability in Benzie County and throughout rural northern Michigan counties near Lake Michigan.
Widely known for its cherry orchards, towering Lake Michigan sand dunes, and lakeside cottages, Benzie County is experiencing population and job growth. The county is home to about 18,400 people, an increase of nearly 15 percent since 2000. Many of the new residents arrived during and after the pandemic. Since 2019, the county has added nearly 400 jobs, an 8 percent increase, a growth rate that is among the five fastest in the state, according to the Bureau of Labor Statistics.
Honor Market has reaped the benefits of this growth. The grocery store brings in about $3.45 million a year and earns a 2 to 4 percent annual profit, Mr. Schneider said. Its location in a small shopping plaza along US 31, the county’s main highway, makes the market convenient for hundreds of workers who commute between Benzie County and Traverse City, the region’s largest city and business center.
Not long ago, family incomes in Honor were under $45,000 a year, most residents were graying, and the largest building in the worn-out business district was an abandoned 20th-century Masonic lodge.
The village is now a manifestation of the stronger economy. The dilapidated house is gone, replaced by townhouses. A 52-acre, $1 million city park — paid for with state, foundation and donor funds — opened last summer along the banks of the Platte River, which flows through the village. In September, TrueNorth, an Ohio-based company, opened a gas station and convenience store, and a new coffee shop, Weldon Coffee, also opened. In November, Sleeping Bear Motor Sports, a motorcycle and recreational vehicle dealer, moved into a newly renovated building in Honor.
As Mrs. Edginton baked fresh bread for the lunch crowd on an October day, the choreography of the operation of a rural grocery store unfolded. Tim Schneider stacked packaged goods in one of the seven aisles. Patrick Schneider tended to customers from behind the spotless glass of his meat counter with fine cuts of meat and various homemade sausages. The digital checkouts, which Helen Schneider manages, chirped in the cashier rows up front.
“We’ll stay until we sell – we’ve agreed on that,” Ms Edginton said. “The next owner will have new ideas and things they want to do when they buy this store. It’s really not that hard. Things come in the back door. We put a price on it, move it to the middle, send it to the front end and hope we make money.”
