In a Nutshell
What: After the closure of the community’s only grocery store, residents in rural Axtell, Kansas (population: 398) banded together to fund, build, and operate a new, full-service grocery store that will ensure that the town continues to have easy access to nutritious, affordable food.
Sector: Healthy foods
Location: Axtell, KS
Size: 7,600 square feet
Funding Sources: IFF, Kansas Healthy Food Initiative, Axtell Economic Development Corporation, borrower equity
IFF Support: $275,000 loan closed in December 2022
Impact: 4 full-time jobs created, 7 part-time jobs created
In rural communities across the United States, grocery stores aren’t just purveyors of fresh, affordable food, but anchors upon which public health and the local economy rely. When a local grocery store closes and the nearest alternative is many miles away, residents have little choice but to rely primarily on less nutritious, more expensive food options available at dollar stores, gas stations, and fast-food chains or, for those with the means and mobility required, to take their business elsewhere.
This has a direct effect on the long-term viability of the community as much needed tax revenue disappears, and the lack of a local option to access pantry staples also makes it more difficult to draw new residents to the community and entice young people to remain. As population declines, it becomes increasingly difficult for other local businesses and institutions like schools, hospitals, and churches to survive.
In January 2022, when Axtell, Kansas’ only full-service grocery store announced its impending closure, the town’s 398 residents were on the cusp of joining an estimated five million Americans in rural areas who must travel more than 10 miles to find healthy, affordable food. Determined for the town in northeast Kansas to remain viable, members of the community quickly banded together to assess their options and begin working to ensure that Axtell would continue to have access to a locally owned, full-service grocery store.
Just 12 months later, the town celebrated the grand opening of the Axtell Community Grocery – the result of a remarkable community-wide effort to marshal the resources and expertise needed to construct a new, 7,600-square-foot facility, fill it with equipment and merchandise, and hire staff to operate the store.
To accomplish this, members of the community and local businesses contributed approximately $470,000 to the project, which was supplemented by a zero-interest loan from the local economic development corporation that will be forgiven in five years if the store is still operating, a $275,000 loan from IFF, and a grant from the Kansas Healthy Food Initiative (KHFI) – a public-private partnership designed to improve access to healthy foods in Kansas communities by providing flexible capital and technical assistance for the development or expansion of locally owned grocery stores (see the sidebar at the end of the story for additional details about KHFI).
With grocery stores continuing to close at a fast rate in rural communities amid stiff competition from big box stores that benefit from economies of scale, and more than 50 rural groceries stores having closed in Kansas alone between 2008 and 2018, Axtell’s experience serves as a model for how communities in similar circumstances can coordinate a response – supplemented by external resources – to preserve local access to fresh, affordable, and nutritious food.
All hands on deck to create the Axtell Community Grocery
When Axtell’s J&J Grocery announced at the beginning of 2022 that it would be closing, a core group of the town’s residents immediately sprang into action. With the store’s facility having housed J&J for seven years and another grocery store for 17 years before that, the steering committee first explored whether it was feasible to purchase the property and continue operating a grocery store in the building.
“Looking back, this project doesn’t get done without having a few people early on who stepped up and committed countless unpaid hours to coordinate the effort to keep a grocery store in Axtell,” says Adam Ronnebaum, who serves on the board of the Axtell Community Grocery. “Those two or three people took the bull by the horns and ran with it.”
“In a small community like ours, all it took was 30 or 40 people to invest to make this project work, knowing that even if they didn’t get their money back, it’d keep a grocery store in the community for years to come.”
The facility’s age was an issue, however, and as it became evident that more Axtell residents wanted to get involved in the effort to keep a grocery store in the community, the steering committee organized several town meetings before settling on a plan to acquire the property, demolish the building, and start fresh with a facility that could better support a grocery store for years to come.
Harnessing the grassroots enthusiasm for the project, an LLC was soon formed, giving Axtell residents an opportunity to financially support the project in exchange for an ownership stake in the store. The nonprofit Axtell Economic Development Corporation and 39 residents and local businesses ultimately contributed to the effort, and, when coupled with additional donations from community members, provided almost $470,000 in capital for the $792,000 project.
“It became evident that there were a lot of people who were willing to support the project, and we had help from a lawyer who helped structure the LLC so that we could have that many people involved in the ownership of the store,” says Ronnebaum. “In a small community like ours, all it took was 30 or 40 people to invest to make this project work, knowing that even if they didn’t get their money back, it’d keep a grocery store in the community for years to come.”
With supplemental grant funding from KHFI – which Axtell’s steering committee was introduced to during initial planning for the project – and loans from IFF and the Axtell Economic Development Corporation, the community raised in less than a year the capital needed to acquire the property, demolish the old grocery store, construct the Axtell Community Grocery’s new facility, stock it with merchandise, and staff the store.
One of the ways the community controlled costs for the project was by leveraging local expertise during the building process, with the design for the 7,600-square-foot building spearheaded by the owner of the local lumberyard, who consulted the store’s wholesaler, Associated Wholesale Grocers (AWG), and one of the former owners of a previous grocery store in Axtell, who helped inform the layout of the facility.
“We’re a very proud community, and there are a lot of people here who want to see Axtell grow and thrive.”
To further reduce construction costs, 30+ members of the community with experience in construction and the trades volunteered their time, eliminating the need to hire a general contractor. The majority of construction was completed by November, with the finishing touches put on the building and equipment like deep freezers and shelving sourced and installed leading up to the store’s soft opening on January 18, 2023.
“Axtell is a town of builders, and we were fortunate to have a lot of younger people in the community who have experience building housing and structures on their farms who were able to build the store,” says Ronnebaum. “We’re a very proud community, and there are a lot of people here who want to see Axtell grow and thrive.”
“The spirit of community has always been alive and well in Axtell, and it’s a community that refuses to settle for no,” adds Alan Meyer, executive vice president of the Axtell branch of the State Bank of Bern. “When there’s a need, residents group together to take care of their town and each other.”
A new community asset in the heart of town
After driving 26 miles round-trip to the nearest full-service grocery store for much of 2022, Axtell residents are now able to purchase a wide variety of products in a high-quality building in the heart of Axtell’s downtown. Open six days per week, with hours varying from day to day, the Axtell Community Grocery is designed to be a reliable option that prevents residents from having to leave the community to find necessities.
Approximately 6,500 square feet of the facility houses the grocery store’s retail area, which is stocked with options comparable to a Walmart in a neighboring community. Fresh fruits and vegetables abound, and the store also offers a diverse selection of meats and cheeses and a plethora of packaged goods. An additional 400 square feet of retail space at the front corner of the store is being leased by a liquor store, with the rental income helping to support the grocery store’s operations and serving as an additional draw.
Buoyed by strong initial interest in the store, the Axtell Community Grocery is now providing full-time employment to four people and part-time employment to seven people, providing an added economic benefit to the community.
“The feedback we’ve gotten since the store opened is that people are excited about the selection,” says Ronnebaum. “They can get everything they need in one place without having to leave town. And the building itself has also made a strong impression, in that it’s a nice, new space that people like spending time in and want to return to. Overall, things are going better than we thought they would this soon after opening. There’s a sense that we have something special here. I don’t know that every town could do this, but the level of support here and having folks willing to pitch in has gone a long way.”
About the Kansas Healthy Food Initiative
KHFI members include:
- The Food Trust, a national organization focused on food retail for underserved populations
- IFF, which manages the loan fund
- Kansas Health Foundation, which provided the $3 million investment to create the initiative in 2017 and an additional $3 million in 2021, while also providing expertise in health issues related to food access
- Kansas State University’s Rural Grocery Initiative, which works directly with food retail outlets and other organizations to improve food access in high-need areas
- NetWork Kansas, an organization devoted to the growth of entrepreneurship and small businesses throughout Kansas
Photo Gallery: The Axtell Community Grocery
Click the image below to see photos of the Axtell Community Grocery and how it was built (all photos courtesy of Axtell Community Grocery).
Tags: : Capital Solutions, Healthy Foods