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As small towns lose grocers, Palubicki's seeks to build new store in Fosston

FOSSTON, Minn.--As Leah Palubicki strode through the grocery store that bears her family's name, she noted one of the aging building's deficiencies: The aisles are too narrow.

James Wark stocks shelves recently at Palubicki's grocery store in Fosston. photo by Eric Hylden/Grand Forks Herald
James Wark stocks shelves recently at Palubicki's grocery store in Fosston. photo by Eric Hylden/Grand Forks Herald

FOSSTON, Minn.-As Leah Palubicki strode through the grocery store that bears her family's name, she noted one of the aging building's deficiencies: The aisles are too narrow.

"They're about five, five and a half feet," she said.

That will be just one of the improvements the new Palubicki's Family Market will have over its old location. The grocer is building a new, 43,000-square-foot store next door to its current building on Fosston's main drag, more than doubling its existing square footage.

Palubicki said a new building will give the grocer more space and help it keep up with the times.

The store will include a Caribou Coffee shop, an expanded deli and bakery, two dedicated aisles of natural and organic foods, a bistro for sandwiches, and it will offer shoppers a glass of craft beer or wine to socialize on otherwise routine trips for groceries. A pharmacy and a liquor store will also be part of the new Palubicki's Family Market.

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The plans may seem ambitious for a town of roughly 1,500, but Palubicki said she's drawing people from nearby communities who have the option to travel to Wal-Mart stores in Crookston and Bemidji, Minn.

"We compete with them in price every day," she said.

Palubicki anticipates an early December opening. Meanwhile, she's in talks to convert the old store into apartments.

Palubicki's currently employs 70 to 80 people and is poised to add workers with a larger store.

Michelle Landsverk, Fosston's economic development director, pointed to Consolidated Equipment Group's opening in the city's industrial park in 2013 as a sign of healthy business growth that she expects to continue.

"I think now we'll be able to support this large and quite nice grocery store," she said. "I anticipate that there will be more businesses that will want to locate in Fosston as well.

"We've got a bit of momentum going."

Growing big in a small town

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Palubicki's new store goes against a trend of smaller towns losing their local grocers.

The number of grocery stores with employees in Iowa was almost cut in half between 1995 and 2005, according to a 2010 report from the Nebraska-based Center for Rural affairs. Meanwhile, that state saw the number of "supercenter" grocery stores such as Target and Wal-Mart increase by 175 percent during that 10-year period, the report said.

Palubicki, a fourth-generation grocer who purchased the store from her parents in 2006, said some small-town grocers have shuttered because they became a "convenience stop" for shoppers who otherwise go to the big box stores.

"If you just come in and pick up a loaf of bread or a gallon of milk, we're not going to survive on that," she said. "(It's) the same thing with the hardware store. You can't just go to the hardware store and buy a hammer and nail when it's an emergency need."

The Center for Rural Affairs pointed to declining populations that leave a small customer base for rural grocers. The average population needed to maintain a grocery store in 2000 was 2,843 people, which grew to 3,252 five years later.

Jamie Pfuhl, president of the Minnesota Grocers Association, said rural stores are trying to find their niche. That could be by offering hardware supplies to a community that has lost its hardware store, or it could be improving their deli selection.

"The grocers that are surviving and thriving in those rural communities are coming up with inventive ways to have more offerings to the consumers," she said. "Those that are staying viable and expanding are finding unique ways to diversify within their communities."

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