Rural Towns Go Shopping for Community Stores

When this rural town’s clothing store closed, residents like Ken Witzeling put up money to start a shop, ensuring that they wouldn’t have to leave Powell to buy a dress shirt for work or trendy jeans for school.

Hundreds of people bought shares in the business, believing that they were investing in more than just a clothing store.

“We sold this as, ‘You’re investing in Powell,’ ” said Witzeling, a retired pharmacist and member of the board that oversees Powell Mercantile.

Community mercantile stores are slowly appearing in other parts of the West, where communities with small populations and uncertain economic futures struggle to attract new businesses, and where shopping centers are often a long drive away.

People in Ely, Nev., plan to sell shares in their own community mercantile, and leaders of such stores in Montana and Wyoming say they field calls from people around the country interested in the idea. Residents of communities in at least two states in the Northeast also are discussing the potential for mercs there.

“There certainly appears to be a growing interest,” said Stacy Mitchell, a senior researcher with the Minneapolis-based Institute for Local Self-Reliance. “Nationally, I think you’re seeing a greater desire and concern to shop locally.”

That level of interest “tells me our communities are trying -- themselves -- to make themselves successful. There is a lot of community spirit in our rural areas,” said Frank French, general manager of an implement dealership in Plentywood, Mont., who helped develop the community mercantile idea in early 1999 with Dr. Kirk Stoner.

The idea, he said, was born of necessity: The Stage department store in Plentywood was closing and residents feared that the northeast Montana town would lose more than a clothing store if nothing similar took its place.

Among the worries: Residents who left town to shop would buy their groceries, fill their prescriptions and see doctors elsewhere as well.

“We’d begin losing a tremendous part of market share,” French said.

A limited liability corporation was formed and shares were sold at $10,000 apiece to raise $200,000 to start the merc. Later that year, Little Muddy Dry Goods opened.

Since then, similar stores have opened in Malta and Glendive in Montana and in Powell and Worland in Wyoming, although shares have sold for far less, generally $500 each. Boards of directors oversee the businesses; store managers deal with daily operations.

Mark Simonich, director of Montana’s Department of Commerce, said he sees no negatives in the model. “I think there’s more of a downside for these not getting started,” he said.

Toni Bishop agrees. When Malta’s department store closed, residents had no place to shop for staples like socks, underwear or pajamas. When the idea of a community mercantile was raised, it was billed as investing in the small northern Montana town, Bishop said.

“Once people knew this is what we needed to do, it was impressive how many people came up,” said Bishop, manager and buyer for the mercantile, Family Matters Inc.

The store opened in August 2000 and has had steady sales, she said, although it is not yet paying dividends to shareholders. Snowstorms this winter contributed to its best January and February ever, she said, with brisk sales on winter goods.

Acquiring the merchandise and being able to offer it at a reasonable price involves cooperative buying among the stores in Malta, Plentywood and Glendive, which select a larger number of items that can be divided among the stores, Bishop said.

While many communities are within driving distance of a discount retailer or, in some cases, have one in town, the mercs sell name-brands that clothing shoppers would tend to find in mall department stores. At Powell Mercantile, for example, a pair of men’s Wrangler jeans costs about $25 and a pair of women’s Tribal jeans costs about $60.

The wide range of family clothing includes T-shirts and baggy pants for teens, Western shirts and sweatshirts, plus-size women’s wear, winter coats and high-tops. There are also items like bags and jewelry.

“Pricing is an important part when it comes to keeping people in town,” manager Paul Ramos said. “We try to keep [prices] at a minimum. We do have to make money, but our main focus is trying to provide the best customer service we can for our customers. And I think a lot of companies have gone away from that.”

Witzeling, a member of the Merc’s board, said the store, which opened in July 2002, met its target of about $500,000 in sales its first year and continues to grow.

“It might be too early to predict. But I think this thing, looking down the road, is like a fire department,” he said. “It’s something the town needs.”