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Real or Perceived, Madison Grocery Monopoly Problematic

Of all the topics discussed at last night's public meeting on reversing Madison's retail decline, we found the strongest consensus around the idea that Madison needs a second grocery store. Meeting organizer Ashley Kenneth Allen cites poll data from the new Madison retail Facebook discussion page that matches results from a Madville Times poll I conducted in January 2010: a new grocery store is Madison's greatest perceived retail need.

We all have our anecdotal examples of the strangeness of having just one grocery store in Madison. Last night, meeting participant Daryl Becker noted that Sioux Center, Iowa, population just 600 larger than Madison's, has a Hy-Vee and a Fairway grocery store. Becker also said that, on a West River church trip this spring, he found three grocery stores in Mission. I noted that Custer and Hot Springs are both smaller than Madison yet support two grocery stores each. Gene Hexom observed that Madison supported five grocery stores in the 1940s and that all appeared to do well in a market just slightly larger than our current county population. Manuela Neuman noted when out-of-town parents bringing their DSU-bound kids to Pamida for dorm supplies, they ask where the grocery stores are and are suprised to hear an answer in the singular.

Madison's strange grocery store monopoly brings shortcomings in price and selection. Counting receipts, Becker finds he saves $10 on weekly grocery shopping when he takes his business to the Hy-Vee and Wal-Mart in Brookings rather than the Madison Sunshine... and that's after factoring in the additional gasoline cost. Allen spoke of finding the local Sunshine shelves bare of wheat bread and regular milk one evening. Gale Pifer said that when his daughter's vegetarian family and his vegan grandson come visit, they have no local grocery options at all. Erin Heidelberger expressed frustration over the fact that, with all the grocery items Madisonians have to travel elsewhere to buy, the local Sunshine chose to expand its liquor stock.

Does the local Sunshine grocery store take advantage of its monopoly position in Madison? Perhaps. But Jon Hunter astutely observed that the perception of monopoly may be as potent as the reality.

Speaking of lumberyards, Gale Pifer asked where Custom Touch and Superior Homes buy their lumber for the houses they manufacture here. Mayor Gene Hexom replied that he knows where but declined to name the suppliers in public.

He recalled that when the Fullerton lumberyard in Madison closed, the only remaining lumberyard, UBC, asked the Chamber of Commerce to work on recruiting another lumberyard to replace that competition. Hunter suggested UBC wanted to fight the impression people might get that "That's the only store in town, so he's gonna rip me off!"

Perceived or real, the ills of Madison's grocery monopoly may be hard to remedy. Manuela Neuman voiced the common local lore that a Hy-Vee was supposed to move into that big inviting spot between Montgomery's Furniture and Lewis but was nixed. Hunter again contributed valuable background: he said the owner of that spot, Clark Sinclair, has long been interested in putting a grocery store in that spot. However, Hunter says Sinclair has found that grocery stores and suppliers have a lot of interconnections and deals that protect their turf and stifle competition.

Hunter said those interconnections may have more effect on smaller chains like Nash-Finch and Affiliated and less on larger stores like Hy-Vee. But in the wholly unconfirmed rumor department, Allen said he's heard that when Hy-Vee bought Sunshine stores in Sioux Falls and Windom last year, Hy-Vee agreed to a five-year non-compete clause in other Sunshine neighborhoods. (Hang in there, Madison: 2015 is coming!)

Madisonians hold a widespread belief that Madison needs competition in the grocery sector. We face various obstacles in bringing that competition here.

But here's a fundamental free-market question. Hy-Vee and other major grocers aren't dumb. They have our ZIP code and demographics. If there was money to be made here, they'd already be here, wouldn't they? Is some anti-free-market entity standing in the way of a second grocery store (and Mayor Hexom assured us at last night's meeting that the city is not imposing and cannot impose such obstruction), or are some free-market forces are keeping a second grocery store out?

And if we can identify the forces maintaining Madison's anomalous grocery monopoly, will we be able to identify practical action (marketing, incentives, a local food co-op) to overcome those forces? Or have the majority of Madison shoppers already identified an easier solution: gassing up and driving to Brookings and Sioux Falls?

38 Comments

  1. shane gerlach 2011.06.29

    As a Hy-Vee employee I can confirm the no compete clause with Sunshine markets. Sunshine completely is revamping looking at Markets like Madison, Tea, Brandon etc.

  2. John Hess 2011.06.29

    Our grocery problem is the same as other retail. They know Lake County residents already travel so they aren't gonna build unnecessarily. One of the smaller stores that isn't in Sioux Falls or Brookings may provide the answer. Sunshine could also build a larger store and capture more local business but they are probably happy with the current arrangement. Another possibility is a smaller specialty food store with health food, bulk staples, etc, to augment the things we're missing.

  3. It is pretty clear from that press release that they have a strategic relationship with Hy-Vee and that there is a non-compete of some sorts. Maybe when that non-compete is up, Sunshine will completely sell out to Hy-Vee?

    At any rate, we need to think of other great grocery stores.

    Maybe SuperValu chain? A Cub Foods or Albertson's? How about a Piggly Wiggly or a Safeway?

    There is a complete list of possibilities here:
    http://www.dmoz.org/Business/Food_and_Related_Products/Retail/

    -----------

    By the way - thank you to everyone that attended last night. It was a great meeting filled with lively discussion and open minds. I hope we can do it again soon!

  4. In all reality, we need to find a chain that is already established in the upper Midwest and that has distribution chains close to Madison. Since Hy-Vee is out and many object to the practices of Walmart... how about a Coborn's?

    Coborn's Inc. operates Cashwise, Coborn's and Save A Lot stores. They have many stores in Minnesota, with some in North Dakota and South Dakota. Coborn's just built a new store in Montevideo, MN. They also have stores in Pipestone, Huron, and Mitchell. Looks like we are close to their current trucking route!

    According to their website "Today, Coborn's, Incorporated owns and operates 38 Coborn's and Cash Wise Foods grocery stores in the upper Midwest." They also trying to become "green" stores to promote environmental friendliness.

    All of their stores are open 24 hours a day! Wouldn't that be nice Madison?

    Last night, we said we wanted a great grocer that values employees and has sound judgement. Looks like Coborn's is employee owned, environmentally friendly, and just big enough to bring some good values and selection.

    What do you say to Coborn's?

  5. Troy Jones 2011.06.29

    Ashley: I'm not seeing what you see with regard to a non-compete, especially for Madison. Shane's comment absolutely denying a non-compete gives an opposing view with more information. This said, Cory asks a great question.

    There are possibly many free market reasons Madison only supports on grocery store:

    1) Retail leakage: This is a problem of many bedroom communities. One needs to understand the % of people who commute to work outside town vs. those who commute in.

    2) The preponderance of second homes in Madison might be a factor.

    3) The number of people who eat institutional meals (i.e. at the college including students employees who might eat on campus.

    4) The size of the existing store might offer a broad enough line to make it difficult for another store as well as their pricing strategy (do they charge monopoly prices?)

    5) Whether Madison is seen by neighboring communities and farm families as their primary trade center or do they go to Brookings, Mitchell, or Sioux Falls?

    6) Availability of a prime grocery location.

    7) Wholesale distribution efficiency. For one of the chains Ashley mentions, it is likely they need to have other stores in proximity to efficiently distribute to this store.

  6. Michael Black 2011.06.29

    Brookings only has two grocery stores: Hyvee and Walmart. Brookings has significantly more people than Madison. It's Food Pride store closed quite a while ago.

    Could it be that our population base is not great enough for another chain to invest the dollars to build a new store in Madison?

    I am old enough to remember the Red Owl store downtown and Piggly Wiggly as well as Carr's. They are all gone as well as the many services stations that dotted Madison.

  7. Troy, I agree that many of your questions need to be answered.

    1. We need to update our zoning and plan for the next retail area in Madison. That could be at HWY 34 bypass and Washington Ave., downtown after removing some buildings and or buying housing and removing it, or along the west side past Pizza Ranch... but this is a discussion we need to have in this town and figure out where we want to grow our next great retail area.

    2. We are indeed experiencing "outshop" and "cannibalization" of retail sales to other regional hubs like Brookings, Mitchell, and Sioux Falls. It is my belief that we need to become our own regional hub to help drive growth in population and employment.

    3. We definitely have a large number of people who travel outside of Madison for work everyday. We do need to focus on bringing more jobs to town and keep people here more often. Retail is only one part of a strategic plan to keep Madison moving forward, but it is a big part. Many feel that retail growth is not being addressed in our community.

    I read Shane's comments differently, I think he is saying I confirm the "No-Compete Clause". I think he is saying there is a clause that is in effect. Shane... Can you clarify?

  8. shane gerlach 2011.06.29

    I did not deny a non compete I confirmed it. Thus typing "I can confirm the no compete clause..."

  9. Jarris Wentzel 2011.06.29

    I've lived here for just about 30 years. I used to do 90% of my shopping in Madison now probably 15%. I get two fliers in the mail Pamida and Campbells Supply and that's where I do most of my shopping. If you don't buy "the paper" you don't get the ads. Has anybody heard of "The Leaderland"? I think that's the name of the weekly paper. I and retailers have been trying to get my name on "the list" for as long as I've lived here but they won't give it to me. If you live in the country most of it is old news by the time you get the daily. I got the paper for awhile and they didn't even give me the Black Friday sales fliers. Living in the country is even worse than in town. Madison doesn't seem to want my business so I buy most of my stuff on the internet now. Amazon has free shipping and it's delivered right to my door in just a few days. I've called Ace to see if they had what I wanted to buy and if they didn't they would get it for me and at a price pretty close to the internet price so I'd buy from them. Compared to 30 years ago Madison seems to have declined is most aspects while surrounding communities of comparable size seem to have been growing.

  10. shane gerlach 2011.06.29

    Fareway foods would be who I would personally pursue. They attempted to set up here in Yankton but Hy-Vee effectively kept them out with their influence on the City Council.

    http://www.fareway.com/

    I think you should also look at Alco. They have one in Flandreau and it is way nicer with better product then the Madison or Pipestone Pamida's. Madison's size is perfect for them (Lead, Chamberlin, Miller, Sisseton, Wagner being some of the South Dakota store locations)

    http://www.duckwall.com/

    Look into this site

    http://www.allbusiness.com/

    Best of luck to you all. I may not live there anymore but Madison captured my heart and I care for her.

  11. troy jones 2011.06.29

    I stand corrected. I read Shane's comment wrong thinking it said a non-compete clause didn't exist.

    Shane, is it for the SFalls market only or all areas of Sunshine? If is the latter, Sunshine did a good job of negotiating.

  12. shane gerlach 2011.06.29

    All areas of Sunshine Troy. What happened was Sunshine was in negotiations to sell to Fareway. Hy-Vee hates Fareway as they are a discount grocery chain. Hy-Vee doesn't mind Whole Foods or others like that as they have no interest in driving prices down. Fareway does.

    Hy-Vee came in and went OVER...way over the top on the offer to Sunshine. Sunshine had to give up one store that they didn't want to lose (12th and Kiwanis) to Hy-Vee. This was a major sticking point. So much that had the deal NOT gone through Hy-Vee was ready to give K-Mart a blank check for their land there and build a superstore directly in front of Sunshine.

    The plays were not all clean but in the end both parties got what they wanted. Sunshine got a no compete from a very aggressive successful company and Hy-Vee kept Fareway out of one of their markets.

  13. Roger Elgersma 2011.06.29

    Sioux Falls has 160,000 people and at least five large HyVees, two large walmarts and one medium sized family owned, one Sunshine and a few small corner stores like there used to be. Do the math. I do not know the population of Madison, but it does not take a huge amount of people to have two stores. Competition can keep you from feeding at all Sioux Falls stores. My neighbors might not like me saying this, but it does help Sioux Falls two percent sales taxes if you stay dumb on this.

  14. shane gerlach 2011.06.29

    Sioux Falls has two specialty markets that survive despite all of that Roger in Looks and Cleavers. Madison could, would and should support a specialty market in the old Drug Store.

  15. Douglas Wiken 2011.06.29

    Pamida sells groceries here in Winner, SD. There sale items are often good buys. Some of their stuff is inedible junk and I don't quite see how it can cost less to ship jam and jelly in from China. Mainly they are a convenience if the other grocery stores are closed.

    Despite this, Winner is listed as a grocery desert.

  16. Linda McIntyre 2011.06.29

    Was it the consensus that the only new retail wanted was a grocery store? I still would prefer a Walmart which would sell items that one cannot obtain now in Madison and which would also sell grocery items. I don't see that a second grocery store would keep more shoppers in town. People would still drive to Sioux Falls for work or movies or all the things that they can't find in Madison, and while there still buy their groceries at the same time.

    In the old days when Madison had four or more grocery stores etc, there were a few other factors to consider. Madison area had many smaller farms with those consumers who considered Madison, not Sioux Falls, a shopping hub. People didn't consider driving 50 miles just to shop; today we don't think twice about it.

  17. caheidelberger Post author | 2011.06.29

    Hi, Linda! Let me clarify: I did not hear a consensus that the only new retail wanted is a grocery store. Some people want a big-box retailer; some think it's just not feasible. Some people see some practical difficulties to drawing a second grocery store. But when folks said, "Madison could use more groceries," I didn't see anyone rising in opposition.

    When I look at the county population, I see our county population down 9% since the peak in 1940. So the change that would support only one grocery store instead of the five successful Gene Hexom say here in his youth wouldn't be that 9% population change; it would be more about that cultural shift in attitudes toward driving you mention.

  18. Lauri 2011.06.29

    Sioux Center also has WalMart and Culvers, and I think DSU and Dordt are about the same size schools.

  19. shane gerlach 2011.06.29

    Lauri one thing you need to look at is the metro area. Madison unfortunately falls in 2 Metro areas for sure (Sioux Falls and Brookings) and possibly a third (Mitchell).
    Yankton is lucky as we are an Island. Over an hour to Sioux Falls, Sioux City, Mitchell or Norfolk. We are the retail center of the area. Madison is not and will not be that.
    This is why I think it would be beneficial for Madison to become a Niche retail market. I mentioned this in the last thread.
    The reality is you are not getting a Wal Mart in Madison with Stores in Brookings, Watertown, Sioux Falls and Mitchell.

    You are also not getting a Hy-Vee as it is HV corporate policy not to intersect metro areas where they already have stores (This is also why Canton, Beresford, Brandon, Harrisburg and Tea won't get them unless they are over taken by Sioux Falls city limits.)

    What you can get is small businesses focused on specific items.
    Besides the businesses I listed above in this thread (Alco and Fareway) I would pursue and Dunhams sports store.

    http://www.dunhamssports.com/

  20. Sarah 2011.06.29

    Glad that the meeting went well last night. I didn't find out about it until it was already going on or I definitely would have come. Glad to see that people are talking about the lack of good retail establishments in town. I would personally like to see another grocery store in town that stocks a great variety of food items. I'm appalled at the lack of many things in the Sunshine. We are a college town with many international professors and students. I have been living across from campus in a small apartment since 2008. The first two years all the neighbors on my floor were graduate students from India. There are quite a few graduates and professors from Middle Eastern countries yet Sunshine sells virtually no middle eastern food other than couscous. The line about people being able to special order food is ridiculous. I'm aware about this, but many people in town are not aware of this option. It is not well advertised and many international students may not feel comfortable doing this. Several of my co-workers at the hospital are into organic and health food items but have to go to Brookings or Sioux Falls to get it. Dan Roman is a fat cat who has a monopoly and sees no reason to stock foods to meet the needs of the community. That truly is a shame.

  21. Dan 2011.06.30

    Madison will never have a Walmart. At least not for another 50 years. I think you just need to drop that idea and move on. As someone with their MBA, I can tell you that they will never open a store here. It falls along the same lines as why JC Penney closed.

    "it would be more about that cultural shift in attitudes toward driving you mention"

    Good luck changing that. I'd like to see them stay in town but I highly doubt that is possible.

  22. caheidelberger Post author | 2011.06.30

    So, any recommendations for practical action, Dan, or do we just accept the status quo?

  23. Dan 2011.06.30

    I'd go for a Coburn's(or any new grocery), but I feel Lewis and Pamida fill the need for most household items. I think if the commuters were truly honest with themselves, they aren't saving as much as they think on their weekly purchases by going to Sioux Falls. I just wish people were more supportive of their communities, even if it is 5% more for the same thing. As far as downtown goes, structurally they are pretty screwed unless they start demolishing buildings.

  24. Nichole 2011.06.30

    5% more on products? Are you kidding me? I am a fellow commuter and I save TONS of my by shopping at Walmart. I hate to say it, but it's true. One day I was running low on my Arm & Hammer Carpet cleaner stuff. Normally I pay around $1.60 for a box at Walmart (yes.. I said the W word). I ran to Pamida, and they had it for over $3(unfortunately, my carpet cleaning waited a day)! Sunshine was over $2. Thankfully for Dollar General they were around $1.85 (no, I didn't do all of this checking in one day). Dog food... I save about $8/bag at Walmart (I am comparing brand per brand). Not to mention, if you have a Sam's Card, you can fill your car up for a meager $3.15/gallon!

    It surprises me at all of the Walmart haters there are around here, because you would be shocked by all of the 43 license plates you see at the Walmart parking lot. You know who you are because we have talked... ;-)

  25. I am not happy with the status quo. This is why I started this effort and this is why 150 people have joined our facebook page. We have had hundreds vote in our polls and even more page views. I have received numerous calls at home and people stop me on the street. The citizens of Madison want this, they just don't know how we make it happen. Madison WANTS more retail development. I am ready to stand up and ask the tough questions and help make the retail sector better. Will you stand with me?

    I will not stop until we do everything possible to recruit new businesses to town. The next 5 years will determine the next 50 years for Madison. We can convince our leaders that we need a strategic plan for new retail growth and downtown redevelopment, or we can vote them out and defund the powers that be.

    I understand that some believe it will not happen, others do not believe we can support more stores, and others just want to protect their own selfish interests.

    I, however, believe that Madison benefits greatly from an expanded retail sector. From job development to sales tax revenues, it impacts the future of our community.

    I do not want to be 6500 people for the next 70 years, like we have for the last 70. Can we strive to get to 10,000 in town and 20,000 in the county? I want to grow our towns in Lake County and see us compete with our neighbors. I will not submit to the power of Sioux Falls and Brookings while watching our streets fall apart and schools fall apart because we pay sales tax in other communities. Yes, Sioux Falls is taking your money and building stuff like an Events Center, while we have to hassle over getting our roads and schools fixed here in Madison.

    This isn't a Republicans vs Democrats vs Independents type of issue. This is Madison vs. our neighboring communities. Survival of the fittest, right? Everytime we shop in another community, we are giving up resources to them that we could use here in Madison to better our town. Do you live here and want your community to be successful? If not, WHY DO YOU STAY HERE? Complaining does not bring stores to town, we must make plans and take action.

    Now, I am guilty of shopping in Sioux Falls and online. But, I would prefer to do all of my shopping in Madison. This means we need more retail stores and more competitive prices. That is the heart of this movement.

    I have had many opportunities to leave this town over 31 years and I have stayed because I believe it will continue to be a great community. We can overcome the powers that be and defeat the status quo. We can reach across party lines and work for the majority of us in this town that want to see improvements and more progressive efforts to increase retail options.

    Our group sincerely believes we need at least a new grocery store and a downtown redevelopment program. We would also like to see a large retailer of some sort. If you believe in the same things, please join us. http://www.facebook.com/madisonsd or MadisonSouthDakota@gmail.com

    If you do not believe in the same things, we have an open ear and would love your feedback as well. Maybe someone out there will start an opposing group? Citizens against Madison Retail Development? I wonder how that group would be portrayed.

    At any rate. Thank you for participating in the discussion. I hope we can all come together to move Madison forward!

  26. Michael Black 2011.06.30

    Dan Roman is not the enemy. He is a local business owner that provides groceries and jobs to Madison. I've seen him working at the store. His kids are in activities in the community. I don't see him as a "Fat Cat".

    Having your own business is not a lot of fun most of the time. It can be very rewarding, but it comes with headaches and nightmares, obligations and responsibilities. We work monster hours trying to make everything come together only to see things beyond our control turn life upside down.

    I have many friends that are business owners in Madison that have stuck their neck out and invested in the future of the community by expanding their operations and hiring more people.

  27. I don't think anyone is calling Dan Roman the enemy. He does, however, have a monopoly on many of the grocery items in Madison. Sure, you can buy some boxed goods, milk and bread at other places. But, when it comes to full grocery services, Sunshine is our only choice.

    Dan has purchased one of his competitors in the past and shut it down. There are also rumors (unconfirmed) that he purchased the land between Montgomery's and Lewis to either build a new store and or keep a new store from building there.

    Dan has been very successful at keeping his (perceived or real) grocery monopoly in effect for the last 10 years.

    Many at the group meeting on Tuesday night agreed that competition is a good thing and helps give the appearance that businesses are competing for your business, rather than running up prices because they are the only option in town.

    I would love to see one of our local media outlets interview Dan Roman and the Sunshine owners. We need to find out how much ownership is still local, how much is controlled by the Sunshine group, and what efforts are being made to keep prices and selection competitive.

    Unfortunately, Sunshine is an advertiser and you won't find any local media questioning the people that pay their bills.

    It is up to the citizens to raise our voices and get the answers.

  28. Jim 2011.06.30

    I want to thank Nichole for sharing her "Arm & Hammer carpet cleaner stuff" story. From what I read, she spends a lot of time driving and checking prices for $2 products. I wish I had that much spare time on my hands.
    I commute to work 5 days a week. I purchase 99% of my gas in Madison. My wife buys 90% of our grocery and household items in Madison, the remaining we spend at Hy Vee or Walmart, IF we happen to be in Brookings or Sioux Falls attending one of our kids activities. My wife does a good job of coupon watching, etc, and we feel we are getting a "decent" value here in town. What we are missing out on is a decent selection. There is not a single store in Madison that gets me all excited to frequent. Too many times we have had to settle with what was offered in Madison to get us by until we were able to check the options outside of town. Let's face it, most Madison retailers feel that since they bought it, stock it, and sell it, we must buy it.

    Cory-I am very curious to know where the pre-built house companies are buying the materials they use to build the houses they sell that Madison gets to tax, of which we give 50% back to only one of the companies. Have you been able to dig up anything?

  29. Jim 2011.06.30

    By the way, the owner of Sunshine is Dan Roemen, not Roman.

  30. Dan 2011.06.30

    also, I am not Dan Roemen if anyone wants to try making that connection. I can't blame his parents for picking an amazing first name.

    [CAH: This is why I strongly prefer that, even if I know who the commenters are by first name, we all use our last names or at least an identifying URL well to avoid any confusion or uncertainty.]

  31. Nichole 2011.06.30

    Wow! I state a plain fact, and get jabbed at. No wonder people sit back and don't say anything. No.. I don't have a lot of time. In fact, I have a really tight schedule. That is why I shop at WAL-MART(not only do I save money, but I can get pretty much everything done in one shot)!

    Just because I think there needs to be some changes around here, doesn't mean that I don't help support our local businesses. I just don't have the bank account to pay their local prices all of the time. W is my main shopping choice and I know what I pay for everything! Is it wrong that while I am cruising the toy isles with my kids, that I happen to go through grocery sections of our local establishments and see how they compare or to see if I can get a good deal? My only purpose of posting was to dispute your comment that the commuters that shop W aren't saving as much money as they think they are. You would be surprised at the money I save. I know that Madison wouldn't be able to support a store the size of the ones in SF an Brookings, but I heard they are trying to spin off a smaller version to communities like ours.

    I don't run a grocery store and I don't know how they determine their prices. Having lived in other communities that had a Sunshine, I can only say they are all about the same when it comes to prices. Typically I have found them to be higher in prices, no matter where they are at. I am not sure if that has anything to do with the Sunshine brand? Or if it is driven by the local owners. I can only assume that the individual store owners have their prices dictated to them. If I am wrong, I am sure someone will speak out.

    I was talking to a neighbor (who makes a weekly trip to SF or Brookings) about this meeting and they expressed concern for people on fixed incomes and the elderly. There are a lot of residents in Madison that can't go to a Wal-mart and are forced to pay these high prices on their limited income and it's sad how little they get.

    Oh.. did I mention that I am a commuter :-) ? Why do people commute from Madison to Sioux Falls or Brookings? Because there are no jobs around here. Maybe bringing in a larger retailer will create jobs and allow people to work where they live and keep some of those commuter dollars local. But of course, people would have to be accepting of change...

  32. caheidelberger Post author | 2011.06.30

    Nichole: Don't let the jabs get you down. You're absolutely right: you just stated facts, which realy backed up the studied facts that Daryl offered at the meeting: people can save money, even after gas, shopping elsewhere.

    And as my wife said at the meeting, don't feel guilty about where you shop. In the free market, you have every right to shop for the things you want/need at the price you can afford. If Madison businesses are failing to meet those wants/needs, then Madison businesses should feel guilty, not consumers.

    Jim, I haven't gotten to look into the lumber suppliers. I wonder: where would a guy start looking? Could we ask Custom Touch and Superior? Would they tell us? Do you know some guys out there?

  33. Jim 2011.07.01

    I was not jabbing Nichole as mush as I was trying to point out the $2 purchase she made caused her to run around town looking for the elusive good deal. We have found that if you NEED something in Madison, you have to be ready to pay their prices.
    My thoughts have always been that unless you add the gas expense to the total price of your shopping trip, you never really know if you came out ahead.
    If a person that drives a vehicle that gets 20 mpg drives to Sioux Falls for the sole purpose of shopping, they will need 5 gallons of gas to make the round trip. At today's prices that equates to around $18. Of course there are the times when you feel the need to eat while there also. Unless you spend enough to recoup that money in total savings, AND allow a little something for your time, are you really getting a good deal?
    So, what it boils down to is just what does Madison need? If the stores in town lower their prices, will the people buy here? All they are doing is lowering prices on items we are saying we don't want in the first place because we want selection. OK, then to have selection the stores need to stock more, which costs money and takes more room. Will the people buy the products then? If some entity decides to open a store in Madison that stocks only items other stores do not offer, but the buyers feel they need as an alternative, how big will that store need to be, and will they offer low prices? Really seems like a merry-go-round to me.
    If I need something specific, that a store in town does not offer, I go elsewhere. If an out of town grocery chain has such a great sale that the external costs are more than covered by savings, I go there. Yes, Nichole, even Walmart gets some of my money.
    Today I plan on checking Madison for some specialty items I need. If I find them and feel the price is tolerable, I will buy them. If not, I will get online and check elsewhere. Madison does not, can not, and will not, offer everything that can be offered. Simple fact, in my humble opinion.

    Cory-I have the believe if a person goes around asking businesses where they get their materials they will show you the door and tell you it is none of your business.

  34. caheidelberger Post author | 2011.07.01

    Fair point, Jim: we're all entitled to offer analysis of how much certain consumer activities really cost. We're all interested in spending our money wisely; there's nothing wrong with pointing out that certain cost-saving measures may not be worth the effort.

    But note that, at Tuesday's meeting, Daryl said he included gas prices in his calculations and found he could still come out ahead shopping in Brookings. Factoring in time is important, but I hear many people factor drive time as a positive thing. They can relax in the car (especially on the quiet Norwegian Boulevard to Brookings), enjoy visiting another town, etc.

    I would indeed expect Custom Touch to show me the door if I ask them where they buy their stuff. Does that mean that the city and local businesses have no business asking us consumers where we buy our stuff... or at least no business making us feel guilty about our consumer choices?

  35. Curt 2011.07.01

    Having more than one grocery store will not make them more competitive if Vermillion is any example. Vermillion is somewhat similar to Madison in that it's location in the middle of what I would term a retail Bermuda triangle. Yankton to the West. Sioux City to the South. Sioux Falls to the North. Outside of weekly specials the grocery prices were, for the most part, a good 20% to 25% higher than in the above towns. Add in the 6% sales tax savings in Iowa and you could really save money. In my opinion these savings were enough to get people to shop out of town. In the mid-seventies gas shortages and other disruptions wouldn't keep people from driving to save grocery money. I even had a grocery store owner tell me that people were fooling themselves if they thought they were saving while spending money on gas. Even if this was the perception folks were still shopping out of town. Now for the kicker and Madison's retail woes. At the time out of town grocery shopping started picking up Vermillion had, downtown, two pharmacy stores, three women's clothing stores, two men's clothing stores, a JC Penny, a Ben Franklin, a store called Newberry's, a couple of hardware stores, two or three shoe stores. None of that is here today. I would submit that grocery prices, savings perceived or real, drove people to shop out of town for everything. "I'm going to Sioux City shopping for groceries so why not take the family down and go to the Mall and make a day of it." There are four shoe stores there that are located within 20 yards of each other and you can be sure they are competing for business. Same with everything else in the above list excluding pharmacy. I was not the biggest fan of WalMart coming to Vermillion however there has been some retail expansion as a result. Not downtown but out near WalMart. If WalMart would release their sales tax figures by city instead of an aggregate we would have a better idea of the impact it has had on retail in Vermillion. We did have a women's clothing store open downtown in the last couple of years. My wife can't afford to shop there. Won't spend $250 on a blouse.

  36. Curt 2011.07.01

    Can I have a do over?

    I forgot to mention that our local shopper would run full page ads extolling us to Shop Local. Then we would run into the owners of the shopper in the Empire Mall. Arms full of purchases. Lovely.

  37. shane gerlach 2011.07.01

    Curt great point on the double grocery in Vermillion. It does help Jones' that Oprah name checked their baker/bread maker. Jones is exactly the size and style shop that Madison needs though.

  38. caheidelberger Post author | 2011.07.01

    Indeed, Curt, great points! Vermillion looks like a really good comparison point for Madison. Penney's, Ben Franklin, women's clothing stores—that's an exact rundown of what Madison has lost, too.

    On the one hand, you show us that the mere existence of a second grocery store doesn't guarantee competitive grocery prices or, apparently, retention of shopping dollars. The owners still have to hustle and offer real value.

    On the other hand, you make a point that combines Linda's observation above about the importance of driving culture with the centrality of groceries to shopping habits. By your thinking, Curt, if we could establish a competitive grocery market, would that re-open the door to re-establish those other retail stores? Or do market forces and perception make that impossible?

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