Nebraska’s rural grocery stores are facing increasing financial and logistical hurdles, but new legislative efforts seek to provide targeted support to sustain these essential businesses. Carlie Jonas, policy associate at the Center for Rural Affairs in Lyons, Nebraska, has been involved in addressing these challenges.
“We worked with one of the senators, Teresa Ibach, at the end of 2023 to introduce legislation to support rural grocery stores because they’re really struggling to stay open,” Jonas said.
Ibach initially introduced LB 1116 in early 2024, but the bill did not advance. In response, Jonas and her colleagues suggested conducting more research.
“We talked with her again about doing an interim study, where we could have some more time to really dig into the issue and find out exactly what challenges rural grocery stores are having and how to best support them,” Jonas said.
That study, detailed in Nebraska Legislative Resolution 374, examined the availability of healthy and affordable food choices in Nebraska communities. It was presented in the fall to the state legislature’s agriculture committee.
Among the findings was that the number of rural independent stores in Nebraska decreased 30 percent from 2016-21.
The study stated that “independent rural grocery stores provide fresh, affordable and healthy foods for their communities, but their presence is at risk. The challenges rural grocers encounter in an increasingly hostile food retail environment have pushed many to close their doors to the detriment of residents living in the community and surrounding areas, as well as other local businesses.”
The information was used to help shape a new legislative effort – LB 375.
Key findings, proposed solutions
While Nebraska’s independent grocery stores fare slightly better than those in other states, they still grapple with significant challenges. Chief among them is the wholesale minimum order requirement. 
“Because our state is so geographically large and there are so many small-town grocery stores, they’re not able to place a large order for trucks to make those deliveries,” Jonas explained. “They’ve had to implement some creative ways to stock their shelves, but it comes at a financial and time cost for those grocery stores.”
LB 375 introduces four grant funding categories to help mitigate these issues:
- Innovative wholesale buying capacity – Modeled after North Dakota’s Rural Access Distribution Cooperative, this initiative would help stores increase their purchasing power.
- Technical assistance for federal grants – Many stores struggle with complex application processes for federal grants, such as the REAP Grant, which requires an energy audit.
- Technology upgrades – Funds could be used to modernize POS systems, implement electronic shelf tags, establish e-commerce capabilities and facilitate digital coupons.
- Business model transition support – Assistance would be available for stores transitioning to a cooperative or other community-owned models, which have proven successful in keeping smaller grocery stores operational.
Economic, social impact
Beyond providing food, rural grocery stores serve as economic anchors for their communities.
“One of the things that we found in our study is just the impact that independently owned businesses have on their economies,” Jonas said. “Those dollars, when they’re spent at an independent store, they stay in the community and go back in to support [its] vitality and health.”
She highlighted examples where new grocery stores revitalized entire streets, spurring the opening of small businesses like coffee shops. Conversely, when a store closes, other merchants often follow suit due to the loss of foot traffic.
Legislative outlook
LB 375 had its public hearing Feb. 4. While the bill remains in committee, Jonas is optimistic.
“There’s been a lot of positive comments about legislation like this, and we are kind of in a difficult budget year because of a predicted budget shortfall,” she said. However, she emphasized the strong support from Ibach, who has been “really great to work with” and is “just as passionate about the issue.”
With its unicameral system, Nebraska provides every bill a public hearing, allowing stakeholders to voice concerns and advocate for solutions. As LB 375 moves forward, proponents hope it will provide the necessary backing to help rural grocery stores not only survive but thrive.
[RELATED: How Rural Nuance Allows Regional Midwest Independents To Thrive]