Tracy Food Pride is a small-town grocery store beating the odds

Editor’s Note: This is the second of a periodic series on rural grocery stores, in light of a recent report that said Greater Minnesota lost 14 percent of its grocery stores between 2000-2013.

TRACY – If you regularly shop at the Food Pride market in Tracy, there’s a good chance that you get greeted – by name – by owner Bruce Schelhaas every time you come into the store.

With a population just over 2,000 people, Tracy has always been a town that can sustain a mid-sized grocery store. But with more people commuting for work and the opening of two new dollar stores in close proximity, Schelhaas is doing everything he can to stay competitive and retain his customers.

“With the draw that Marshall has on the people that work there, the amount of business we lose there tends to be higher,” Schelhaas said.

Tracy sees heavy competition with grocery stores in Marshall, because when commuters are on their way home, they typically drive by them.

“They’re driving right by Wal-Mart and Hy-Vee, so you fight that battle,” Schelhaas said. “Menards is now another one, too, that carries a lot of groceries.”

It’s hard to compete with the prices that larger stores can offer, because when a big company like Wal-Mart or Menards purchases goods, they are purchasing enough to stock thousands of stores, Schelhaas said.

“That’s one of our major problems – the smaller stores can’t buy things at the same cost as the bigger stores,” Schelhaas said. “Our warehouse is not as big as those guys, so we can’t command the prices they do.”

Schelhaas combats the competitors bulk buying discounts by ordering some items in pallets. He can get a price break from his distributor but he needs to hold onto the items longer and store them.

“Juices, spaghetti sauce, paper products. We try to buy them by the pallet, and that’s why you see all the stuff stacked on top of the aisles,” Schelhaas said. “By doing that, we can compete better.”

But the impact from the new competition in town, a Family Dollar and a Dollar General that both opened last fall, is what is beginning to worry Schelhaas.

“We survived the new Hy-Vee and that took away (about 5 percent) of our growth. We survived Super Wal-Mart which probably took 5 percent away, and Menards probably took another five,” Schelhaas said. “Now we’ve got the dollar stores that will take another 10 percent.”

Schelhaas admits that the stores do offer items not available in Tracy that will save residents trips to larger towns.

“They do serve a purpose. They have a lot of clothes and toys that are probably saving people trips to Marshall,” Schelhaas said. “There may be some good in them as well for us, but overall, we look at the drop in business, that 10 percent drop.”

And it’s a big drop in profit. But there are still things that Food Pride offers that the dollar stores cannot.

“They’re like a mini Wal-Mart… it really whittles away at the profit that’s available in a store like this,” Schelhaas said. “But the thing they don’t have is fresh produce and fresh meat. They don’t have the deli or the bakery like we have, so that’s our advantage over them.”

Schelhaas has been upping his advantage, too. Instead of getting only two weekly produce deliveries, he found a second vendor and can bring in a bigger selection of fresh fruits and vegetables four times a week.

“That’s really, really helped as far as the variety,” Schelhaas said. “We’ve expanded our produce department and then we’ve got more variety plus we can be more competitive as far as pricing goes.”

The freshness of the store’s produce, as well as the decline in dumping the old, is another strong advantage with having an additional vendor.

“Our freshness dates are a lot, lot better,” Schelhaas said. “So we dont have to order nearly as much at one time and there by keeping everything a lot, lot fresher.”

Along with the impressive produce department, Schelhaas said the backbone to his store is their meat department.

“We have a really good meat department,” he said. Schelhaas’ specialty is cutting meat, and his other meat cutter, Howie Greenman, has been at the job for more than 25 years.

“They (dollar stores) also don’t have the variety that we have,” Schelhaas said. “You might look at the Hamburger Helper there and they have five kinds, but we have 25. Bush’s Beans, they’ll have two and we have 10. Those are the kinds of things you lose out on at the dollar stores. That’s where we can compete with them.”

Schelhaas prepared for the hit he knew his business would take after the new stores opened in town: he set up his own dollar aisle.

“We have a dollar aisle to kind of counteract it, we put it in about a year before they got here,” Schelhaas said. “We sell a lot of stuff out there because people are looking for that.”

He’s also implemented daily specials to bring in customers on days when business used to be slow.

“For example… banana day, 39 cents a pound. You can’t get bananas anywhere cheaper. That’s a really good special for us and that makes Wednesday one of our busiest days,” Schelhaas said.

“On the weekends we have our milk special and that makes a big difference as well. We used to have no business really on Saturday and not that much on Saturday, but now Sunday is our busiest day followed by Saturday. That’s made the difference on our weekends,” he said.

But Schelhaas is still worried about the future. His new competition has only been in town for a few months, and he is waiting to see what their impact will be once their newness wears off.

“There’s not room for three stores, so somebody is going to go eventually here,” he said. “Hopefully it’s not us. It’s going to be quite a challenge because every town is getting one, so what do you do?”

Schelhaas plans on keeping up his store’s specialties – the fresh produce, the meat counter, and baked goods that are made daily – to keep his customers coming back.

“If we weren’t here for your fresh produce, your fresh meats, all the different variety, all the different things that they don’t have, like the bakery – that’s why we do the business we do,” Schelhaas said.