North Dakota’s grocery industry is navigating changes, shaped by population growth, economic shifts and evolving consumer habits, according to John “Jiggs” Dyste, president of the North Dakota Grocers Association.
“We only have some 700,000 people in the whole state,” Dyste said. “I think as far as growth, we’re probably in the top five for people moving in. And that’s based on percentage, but it’s mostly into what we call the urban areas.”
Fargo, the state’s largest city, now has about 133,000 residents, and the majority of population increases have occurred in the state’s largest communities.
Despite the growth, North Dakota’s economy faced several challenges in 2024. The state’s real gross domestic product (GDP) decreased by 2.3 percent in the third quarter, marking the most significant decline among U.S. states during that period, according to the U.S. Bureau of Economic Analysis.
This downturn was influenced by factors such as wildfires, which disrupted oil and gas production, leading to an estimated reduction of 60,000 to 90,000 barrels per day.
However, the state’s financial position remained strong. Revenues for the biennium ending June 30, 2025, were 11 percent ($392 million) ahead of forecasts, according to a Dec. 4, 2024, report from North Dakota state government. In addition, North Dakota’s assets under management in various funds doubled to $32.6 billion since 2017.
As for 2025, the economic outlook is cautiously optimistic. Gov. Doug Burgum’s proposed $19.59 billion budget for the 2025-27 biennium anticipates high oil production and stable prices, supporting workforce development, education and infrastructure.
The spending plan also includes a $95 million package to improve housing affordability, accessibility and stability during the 2025-27 biennium, and an additional $54 million for workforce-related programs, including childcare support, to continue addressing the state’s workforce shortage – all with no new taxes.
North Dakota’s grocery industry includes a mix of big-box retailers and independent grocers. 
“All the larger communities have the Targets and the Walmarts. Aldi is one that’s moved in, in the last … three to four years. And of course, Dollar General has opened up stores all across the state,” Dyste said.
However, he noted that smaller, independent grocers dominate the market.
“We don’t have a lot of communities that can support a Walmart or a Costco,” he said.
A key trend in the state is the consolidation of independent grocery ownership. He noted an example of a grocery retailer with 11 stores.
“All those were independents, probably 10-12 years ago. Every one of them had an independent owner. Now they’re owned by one. And that’s what you’re seeing, a consolidation of stores.”
One of the biggest challenges for independent grocers, particularly in rural areas, is product distribution.
“The problems of the smaller towns, it’s getting product. The manufacturers and the delivery people – milk and bread and chips and all them – are looking at these small stores. And if they’re off the beaten track, they’re saying, we’re not going there.”
To combat these challenges, North Dakota has implemented programs to support rural grocers.
“Two years ago, the legislature set aside $2 million to try to set up programs such as what Diana [Hahn – see related article on this page] and her group have done. So they’re putting seed money out there to try to set up more of these co-ops. Cooperative buying is really what it is. They’re trying to group these smaller stores in an area,” Dyste said.
There are also discussions on improving energy efficiency for grocery retailers.
“North Dakota has been kind of lacking on helping with energy programs to put in new grocery freezers that are energy efficient. Part of the argument through the years has been that our electricity rates are so low that they didn’t feel that there was a need to do it. There’s some talk about that this year.”
Dyste emphasized North Dakota’s pro-business environment.
“North Dakota is very business friendly. It’s basically a one-party state, from the governor all the way down – even our U.S. representatives are all the same party – and they are very business friendly. Our regulations, there’s really no burden to them. I was in the grocery store business for 40-some years, and there was nothing overtly punishing that the state has ever done.”
One unique asset is the state-run Bank of North Dakota.
“North Dakota has the only, I believe, state-run bank. It’s been around since the time they started the state almost,” Dyste said. “They have loan programs for smaller businesses.
“They’re kind of like the lender of last resort, but they work with local bankers and can make things happen. I personally used some of their programs a couple times when I was building stores.”
Looking ahead, Dyste remained cautiously optimistic but acknowledged ongoing challenges.
“I think it’s really difficult for the smaller stores, and I worry about the medium-sized stores now that are in the medium-sized towns. They’re getting pressured now.
“For a rural state, it’s nothing to go 100 miles to the doctor or to a shopping center. And when times are tough and money might be short, then it affects the smaller towns. I worry about that. I don’t know what the answer is.”
He noted that online shopping and major retailers continue to impact local grocers. “You’ve got Amazon and Walmart and those that will ship directly to the home. It’s a whole different world than when I started. I do worry about that.”
Despite these concerns, he points to an important lesson from the COVID-19 pandemic.
“I think the one thing that the communities found out during COVID was, hey, their grocery stores were there, and they were doing a good job of supplying product and fresh product. It was hard to get sometimes, but they were there.
“People responded, and they shopped locally. But now, as time has gone on, it’s just kind of slipped back to the same pattern.”