Rural Spotlight

Small Businesses — Engines of Our Communities

As advocates that work with small businesses of all kinds, we know that small and independent businesses in rural America are a crucial source of innovation and provide distinct benefits that foster thriving local economies and communities. However, many rural communities have lost their local businesses and are struggling with poverty and despair. The decline of small businesses in rural communities is a key driver fueling this inequality by cutting off a long-standing pathway to the middle class, eliminating a crucial source of new jobs, and further concentrating wealth in the hands of the few. 

“When we don’t support our small businesses in rural communities, our communities don’t grow,” said Collen Bies, owner of Colleen Bies Photography in Neenah, Wisconsin. Colleen, who resides in Neenah, with a population of 27,000, describes a once vibrant main street in her youth that now has had a significant number of businesses close. The problem isn’t lack of customers, and there is mounting evidence that small businesses often outperform their bigger competitors, providing better services, higher-quality products, and even lower prices. However, misguided public policy has tilted the scales in favor of corporate concentration and monopoly power. Federal policy, such as special access to capital and advantageous tax rates, favors the big-box retailers and large chains leaving local businesses unable to compete at scale.

Food Deserts as Big Box Retailers Proliferate in Rural Communities
Local grocers struggle to compete with big box stores like Walmart, Dollar Stores, and Kroger in rural communities. These chains leverage their power over suppliers to get to lower prices for the goods they put on their shelves. These discounts are not available to smaller, independent grocers. RF Buche owns several grocery stores, including the only store within an hour’s distance of the Pine Ridge Reservation. He said, “I hope to have a more level playing field when it comes to cost. But probably more than that, I want access to the same foods that everyone else can get for my customers.” 

The big box chains appear to seek out food deserts, and where those conditions do not yet exist, they often create them by pushing local grocers out of business. Dollar stores and other big box retailers, like Walmart, have overrun much of rural America. In many small towns, they are the only retailers left.

Randy George, the owner of Red Hen Bakery in Middlesex, Vermont, is one of just a handful of businesses of any size, in his rural town with a population of under 5,000. He and his wife have owned their business for over two decades. “We feel the impacts of corporate consolidation more and more,” he reflected. “We get the news that one of our suppliers bought our other supplier, and now we have one fewer option, and then just like that, the prices go up.” 

Pharmacy Deserts and Vanishing Independent Pharmacies
Local pharmacies in rural communities are also vanishing across the U.S., feeding the spread of “pharmacy deserts,” or places with no pharmacies within an easy distance. The disappearance of these crucial sources of healthcare is afflicting a growing number of rural and urban communities. The leading threat to rural community pharmacies are large healthcare conglomerates, such as CVS, which both compete against local pharmacies and control their insurance reimbursement rates. Like other local, independent retailers, research has found that independent pharmacies outperform the chains on several necessary measures. They provide more one-on-one patient consultations, shorter wait times, and lower prices. 

–Chanda Causer, Main Street Alliance & Katy Milani, Institute for Local Self-Reliance