Independent grocery stores play a vital role in rural communities, but inflation, competition from big-box retailers and other challenges are putting increasing pressure on their operations. Blake Schwartz, owner of Hometown Market in St. Paul, Nebraska, said labor issues specifically are greatly impacting independents in his state.
With Nebraska’s minimum wage set to rise to $15 per hour in 2026, the financial strain on small businesses is mounting.
“There’s a ripple effect to that whenever minimum wage goes up,” Schwartz said. “Once 2026 rolls around, when it goes to $15 an hour, I think it’s probably going to be about a 65 percent increase in minimum wage from where it was in 2022.
“I’m all for paying people. We are absorbing most of those costs right now and not so much focusing on passing anything on to the customer. But that being said, at some point, when do we start thinking about those things? 
“Again, it’s a ripple effect. Everybody’s going to be dealing with it. By no means am I crying about it, but it’s definitely something that affects operations.”
Schwartz also expressed concerns about the additional costs associated with mandated paid sick leave. While he supports the idea, he noted the operational challenges that come with it.
“There’s a cost to it,” he said. “I think some people may not realize how much it actually takes to run one of these things,” he said. “There’s minimum hours you have to schedule. Certain shifts have to be covered.
“And if you’re not increasing sales or whatnot, you’re kind of flat. We’re a little flat compared to last year. Labor’s a concern. I’m not going to sugarcoat it. But we’ve just got to work around it. It is what it is.”
Hesitancy toward self-checkout
While many grocery retailers have turned to self-checkout to mitigate labor costs, Schwartz remains skeptical about its benefits for a small, independent store like his.
“I don’t intend to put any self-checkouts here. I’ve heard the last couple years there’s been some horror stories,” he said. “There’s some retailers out there that have backed away from self-checkout, even some of the larger box stores, with concerns with theft.
“You probably have to have somebody out there to man it anyway because some customers just don’t like them. I know it’s become more of the norm the past few years, but I just backed off of that thought. ”
While Schwartz acknowledged that self-checkouts can reduce labor costs, he questions their effectiveness in smaller stores.
“I know it does save on labor costs. I know that’s probably the underlying reason most retailers are putting them in their stores is to save from having to schedule a checker to stand up there. But is it really saving that much in a small store like this? I don’t think so.”
Struggles of independents
The grocery landscape in Nebraska’s small rural communities remains challenging, with some stores closing due to economic pressures.
“There’s a couple of communities that I know have struggled. We’ve had some stores close up,” he said. “But for the most part, I think a lot of them are staying afloat, too.
“I mean, it’s easy to focus on the ones that are closed down, but I think you’re talking about very small communities. I know St. Paul is about 2,500. I think any community that’s probably less than 1,000 or so maybe are struggling.”
At industry events, Schwartz hears similar concerns from other independent grocers.
“I see some retailers at the food shows that I speak with, and most of their concern is the same as all of ours – inflation, labor.”
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Call to legislators
Schwartz strongly believes in the importance of independent grocers for the survival of small communities and urges lawmakers to recognize their value.
“It’s extremely important. I would tell them that these independents out there, they’re really the backbone of these communities. People don’t know what they got until it’s gone.
“I feel really bad for these communities that are losing their grocery stores. I don’t know if that’s just the way of the land right now, the way the world is in regard to grocery retail. But if there’s anything that the legislative people could do to help us out, that would be great.”
Potential impact of LB 375
One piece of legislation that could provide relief to independent grocers is LB 375, a bill introduced in the Nebraska legislature to assist small grocery retailers with technology upgrades and operational improvements.
“The bill basically is to help incentivize grocery stores investing in technology upgrades, like electronic shelf labels, which we don’t have here. I think it would help save us on labor costs,” Schwartz explained. “And also, the POS systems up front, to update those. I think those things can help.”
LB 375 specifically aims to provide financial assistance to independent grocers through grants that would offset the costs of upgrading store infrastructure. This includes modernizing checkout systems, implementing digital price labeling and integrating new inventory management technology. By alleviating some of the financial burden, the legislation hopes to make rural grocery stores more competitive and sustainable in an evolving market.
Despite the challenges, Schwartz remains committed to his business and community.
“Again, it’s just tough to run one of these things – and we’re fighting against the big box stores, too, the Walmarts of the world,” he said. “But I know what sets us apart is that we have a good connection with the local community.
“It’s more of a family connection, more so than what you’re going to get in these bigger cities, I believe. We really cater to the community. And again, these grocery stores are the backbone of these communities, and we’ve got to keep them.”