The town of Honor, in northern Michigan, doesn’t have too many places to shop for food. The only grocery store in town is Honor Family Market, one of a shrinking number of independent grocers left in the United States.
Because it’s the only market in town, it has an outsize role in this community of 330 residents. The 12,000-square-foot store, its shelves filled with local products like honey, baked goods and homemade bratwursts, is not only a place where people — in Honor and elsewhere in Benzie County — go to buy meat and produce. It’s also where they can go to get free — or at a reduced cost — food and supplies for community events like football games or the annual National Coho Salmon Festival in the summer.
The store has nine full- and nine part-time workers, and hundreds of Honor’s high school students have worked their first jobs there, sweeping the well-worn linoleum floor, stacking groceries in the narrow aisles or bagging at the three checkout lanes.
The store is “paramount for a healthy, living, breathing community,” said Ingemar Johansson, a resident and president of Honor Area Restoration Project, a nonprofit business development group. “Everybody shops there. You run into somebody you know every time you go.”
Honor Family Market’s place in the community, though, is more uncertain now than it has ever been since the four siblings who own the market bought and took over the business in 1992. Tim Schneider, Patrick Schneider, Marilyn Edginton and Helen Schneider, who all work at the market year round, are now in their 60s and 70s and ready to retire. They hope to keep the grocer independent, a herculean task during a time of industry consolidation that have pushed up grocery prices.
Keeping it independent requires a buyer who is willing to not only take on the tight margins of a small business but also compete against the giant chains. Already, there’s a chain next door, the Dollar Tree, that Honor Market competes with for sales of toiletries, paper goods, detergent and snacks.
Those challenges have made it hard for the Schneiders to find a buyer. Since they put the grocery store, now listed for $1.1 million, up for sale in 2021, they have hired and fired three real estate brokers, and the lone potential buyer failed to show up at closing in 2023 because of a lack of funds.
Their story is echoed by other small businesses that have felt the blow of powerful headwinds in and outside northern Michigan, including consolidation in the grocery sector, tight lending for low-margin businesses, the difficulty of selling small businesses in rural towns and competition from discount chains known for undercutting local grocers.
From 1990 to 2015, the number of independent grocery stores in the United States dropped 39 percent, to 2,648, with an average of 30 store closings a year, according to a 2021 report by the U.S. Department of Agriculture. That suggests there are roughly 300 fewer stores today than in 2015. Virtually all operate within tight margins in a hypercompetitive, $846 billion industry in which a significant portion of all grocery sales goes to just four companies: Walmart, Kroger, Costco and Albertsons.
“It’s a big challenge,” said Rial Carver, who directs the Rural Grocery Initiative at Kansas State University. “Rural grocers are at a competitive disadvantage with supercenters and discount retailers. If you’re operating on net profit margins of 1 percent, there’s barely any room for error.”
Curtis D. Kuttnauer, managing director of Golden Circle Advisors, a Traverse City-based investment bank that specializes in selling small businesses, said that “three-quarters of all businesses put on the market don’t sell.”
“What makes rural businesses more difficult to sell is that most need to be operated locally,” he said. “Being rural limits the pool of buyers.”
There’s also the question of how new ownership could affect the town’s residents. If the store is bought by a bigger chain, that could lead to higher grocery prices.
The Schneiders know firsthand how consolidation affects prices. The number of wholesale food distributors that served their grocery in the 1990s has diminished from seven in the region to one in Grand Rapids, owned by Spartan Foods, which owns and operates two Family Fare chain stores in Benzie County and 79 other grocery stores in Michigan. Honor Market is captive to its pricing.
“Walmart doesn’t want to sell to me; Meijer only does its own stores,” Mr. Schneider said, referring to the Midwest grocery chain. “Spartan is pretty much it.”
The industry’s concentration, economists have said, was allowed to happen largely by decades of weak enforcement of antitrust laws, particularly the Robinson-Patman Act of 1936, which forbids price discrimination that could wipe out competition in an industry.
“For the next almost 50 years, the Federal Trade Commission vigorously enforced the law,” said Stacy Mitchell, an expert in monopolies and a co-executive director of the Institute for Local Self-Reliance, a nonprofit group that provides technical support to communities for sustainable development. “For all those decades, the market structure was about half independent grocers and about half chains.”
But that started to change in the 1980s, when the F.T.C. “suspended enforcement,” Ms. Mitchell said, because the Reagan administration and several other administrations that followed saw improving efficiency with larger groceries as a priority over ensuring competition.
That’s when the Schneiders bought their first grocery store, in 1980, in Copemish, a similarly tiny town, 20 miles south of Honor. The siblings had learned the grocery business from their father, Leroy Schneider, a supermarket manager in northern Michigan. They bought the store in Copemish, for $175,000, and the one in Honor in 1992, for $400,000.
After managing the Copemish grocery store for 41 years, the siblings, eager to retire, put both stores on the market. Unable to attract a buyer in Copemish, the Schneiders closed the 15,000-square-foot store but retained ownership of the building, which now serves as a vehicle storage center for Crystal Mountain Resort, the county’s largest private employer.
They’ve encountered similarly feeble interest in the store in Honor, but despite the challenges, Marilyn Edginton is convinced that the Honor store will have a different outcome from the one in Copemish. The reason: The sturdiness of the economy in Benzie County and across the rural northern Michigan counties close to Lake Michigan.
Widely known for its tart cherry orchards, tall Lake Michigan sand dunes and lakefront cottages, Benzie County is experiencing a surge in population and jobs. The county is home to about 18,400 people, a nearly 15 percent jump from 2000. Many of the new residents arrived during and after the pandemic. Since 2019, the county has added nearly 400 jobs, an 8 percent increase, a growth rate that is among the five fastest in the state, according to the Bureau of Labor Statistics.
Honor Market has reaped the benefits of that growth. The grocery store brings in about $3.45 million annually, and earns a 2 to 4 percent annual profit, Mr. Schneider said. Its location in a small shopping plaza along U.S. 31, the county’s major highway, makes the market convenient to hundreds of workers who commute between Benzie County and Traverse City, the region’s largest city and business center.
Not that long ago, household incomes in Honor were under $45,000 a year, most residents were graying and the largest building in the worn business district was an abandoned turn-of-the-20th-century Masonic Lodge.
The village now is a display of the stronger economy. The dilapidated lodge is gone, replaced by town homes. A 52-acre, $1 million town park — paid for with state, foundation and donor funds — opened last summer along the banks of the Platte River, which flows through the village. In September, TrueNorth, an Ohio-based company, opened a gas station and convenience store, and a new coffee shop, Weldon Coffee, also opened. In November, Sleeping Bear Motor Sports, a motorcycle and recreational vehicle dealer, moved to a newly renovated building in Honor.
As Mrs. Edginton baked fresh bread for the lunch crowd on one October day, the choreography of operating a rural grocery store was on display. Tim Schneider stacked packaged goods in one of the seven aisles. Patrick Schneider tended to customers from behind the spotless glass of his meat counter with prime cuts of beef and various homemade jerky and sausages. The digital cash registers, which Helen Schneider manages, chirped at the checkout lines up front.
“We’re staying until we sell — we’re agreed on that,” Mrs. Edginton said. “The next owner is going to have new ideas and things they want to do when they buy this store. It’s really not that hard. Stuff comes in the back door. We put a price on it, move it to the middle, send it out the front, and hopefully we make some money.”