Final Projects

America’s Youngest Grocer

Pomeroy, Iowa – People Magazine. The Ellen Degeneres Show. CBS Evening News. These are just a few of the big media names that have featured Nick Graham. He’s not a big-name politician, not a movie star, not a medal-bearing athlete. He’s a 21-year-old, small-town grocery store owner who has yet to step on a college campus to take classes, although he’s been the guest speaker for a few.

“Prior to getting into the grocery business, I’d never been grocery shopping before,” Graham said. “I grew up scooping turkey manure and driving tractors. This was a total new ballgame.”

Given the title of “Youngest Grocer in America,” Graham has owned and operated small-town groceries since he was 17. In October, he opened his most recent grocery along with a cafe in the town of Pomeroy, Iowa, population 701. Pomeroy had been without a grocery for over four years, ever since Family Market closed.

The 17-year-old businessman

Graham, a fifth-generation farm kid, spent his first few years on a turkey farm in Truman, Minn., 20 minutes from the Iowa-Minnesota border. When Graham was 4, his father was killed in a snowmobile accident. The family relocated to Armstrong, Iowa, after his mom remarried, where Graham lived until he was in the 10th grade. He then moved back to Truman to live with his grandmother.

Truman’s grocery store closed during the summer of 2006, just before Graham’s senior year of high school. Recognizing what a loss the closing would be to the town, Graham bought and reopened the store that October. The city leased the building to Graham for $1, and Graham put his life savings of $10,000 into the store. He was 17.

“I put the inventory in there, got it cleaned up, and reopened it,” Graham said. “It was a totally crazy ride.”

By July 2008, almost two years after Graham had bought it, the store profitable. He was offered a good price for his business and sold it on a whim. He went from running his own store to being unemployed overnight.

In the months that followed the sale, Graham worked for a company that sold livestock production software and then for a daycare managing its finances. Yet, Graham couldn’t resist the appeal of a business adventure. After a friend in the grocery business casually mentioned that the Rolfe, Iowa, grocery was close to bankruptcy, Graham drove an hour south from Truman to check it out. He purchased the store, drawn by the freedom of owning his own business and being in the grocery industry again.

“I was far too independent and opinionated to be a real success in the workplace,” Graham said. “I like to tell people that going to work kind of cut into my schedule.”

Graham followed up his Rolfe investment by starting a combined grocery and cafe in Pomeroy, a 40-minute drive from Rolfe. The cafe opened in mid-October 2009 with the grocery following at the end of November.

“The response here in Pomeroy has been overwhelmingly positive,” Graham said. “There’s certainly been some challenges, but I’ve thoroughly enjoyed it. It’s been both a personally and economically rewarding experience.”

Small town groceries: a declining trend

Despite his young age and lack of formal education, Graham has seen great success in his grocery endeavors. His experience contrasts with statewide and national trends, however. According to an Iowa State study, between 1995 and 2005 the number of Iowa independently run grocery stores declined by 676 stores, or approximately 53 percent.

Small-town grocery facts

This decline is a result of several factors, according to the study by Meghan O’Brien, an economics professor at Iowa State. As rural populations decline, so does the retail health of those areas, causing businesses to close or reduce provisions. With less available for purchase in town, many residents travel to larger communities, which offer a wider selection of goods at lower prices, primarily in large chain stores. The number of chain store groceries in Iowa increased roughly 30 percent between 2000 and 2005. Nationwide, in 2006, 17 percent of all U.S. food and beverage sales were made at Wal-Mart.

Graham hopes his store will be the exception to the declining trend of the small-town grocery.

“I think a grocery store is not the only important asset in the economic center, but it’s certainly a vital part of any community development program,” Graham said. “I feel I’ve had quite some success in fulfilling the need in smaller niche markets that the Hy-Vees and Fareways certainly have no interest in being in.”

Several factors have allowed Graham to be competitive with larger market stores, he said, despite a nationwide study revealing that grocery sales were reduced by 17 percent when a Wal-Mart was introduced to the area. To keep residents shopping in his store rather than driving 30 miles to the nearest Wal-Mart, Graham emphasizes personal service.

“We call people by their first name. We deliver groceries. We do whatever somebody wants us to do to make our customers happy,” Graham said.

Locality and convenience also play a role.

“His hours are phenomenal,” said Deb Mefferd, a Pomeroy resident. “I’ve gone in there Sunday after church when I’ve realized I’ve need something fast for dinner. So that’s been great.”

Nationally, small-town grocers also face an increase in their minimum order size, causing them to maintain higher inventories, O’Brien said in the study. But Graham has found a way to deal with this setback. With two established grocery stores he is supplying, Graham is better able to deal with the minimum than owners who only run one store. He can also purchase goods at a comparable rate to chain stores because he’s a member-owner of a retailers cooperative, thus allowing him to keep his prices competitive.

“Nick honors the ads from area grocers so that pricing is very competitive now,” Mefferd said. “There was nowhere to shop before. You went to Casey’s to get the bare minimum and paid Casey’s prices.”

While studies show that superstores draw in customers from up to 30 minutes away, the elderly population of a small town is much less likely to travel that distance, making the impact of not having a grocery store more severe on that group. Some are forced to move to a larger community or rely on others to bring them groceries, as many of the elderly cannot drive. For those who can drive, fuel costs reduce what can be spent on groceries, resulting in poorer food choices and a reduction in the quality of life, said O’Brien.

“When Family Market closed, it was really a hardship for the elderly people especially,” Mefferd said. With 29 percent of the population of Pomeroy being 65 and older, a significant portion was facing severe setbacks.

Eloyce Klaassen, a Pomeroy resident, said winter weather made it hard for people in her age group to get the groceries they needed when there was no grocery in town. Graham’s arrival in town has changed that.

“It’s been very nice this year because we’ve gotten snow and snow and more snow,” Klaassen said. “It’s been great for the older people in town who could not drive in winter conditions.”

Encouraging community culture

The cafe that attaches to the grocery has also been a great asset to Pomeroy’s sense of community. Over the past several years, the former owners would close the cafe for a couple of months when they wanted to go south for the winter, Mefferd said. Those who could not easily get to another town to eat out, especially the elderly, found that frustrating, she said.

“Being able to dine out is a nice leisure thing for people,” Mefferd said. “Now there’s a nice menu of things and the coffee opportunity. It’s nice to have a gathering place where you can get something quick for breakfast but also do a leisurely visit over coffee. It’s been a great boon for the community.”

The cafe is open seven days a week, with its most popular dining time being Sunday buffets.

“It gets busy,” Graham said. “Most of the time you can’t even get a seat. That’s the best day of the week here.”

Sarah Juilfs, Pomeroy city clerk, says that the cafe and the grocery have brought convenience to the town.

“Before, you had to drive 12 miles to the nearest restaurant and grocery,” Juilfs said. “Now all of that is right in town. It’s added value to property.”

Graham said that the grocery business has not always been easy.

“I’ve got no real formal education to speak of so it’s been a lot of trial and error – and a lot more error than trial early on,” Graham said of his business. “But I’m getting the hang of it. I learn something new every day or at least try to.”

As for what’s on the horizon, Graham is looking to buy some grocery stores in larger markets. But he’s not limiting himself to just the retail grocery business. He’s explored some other endeavors, as well, although he remained tight-lipped about them.

“I’m always looking for new adventures, new opportunities,” Graham.

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America’s Youngest Grocer