Communities throughout Wyoming are adjusting to the changing retail landscape, with the recent announcement that Shopko will go out of business hitting some rural communities hard.
“It’s just a really big impact for those small communities who already deal with a lot of leakage concerns,” said Amy Quick, regional director of the Wyoming Business Council in the Big Horn Basin.
Shopko announced March 18 that it would liquidate its business after being unable to find a buyer. The liquidation is expected to take 10-12 weeks. Including stores that had previously been slated for closure, 13 communities in Wyoming will lose Shopko stores, Quick said: Afton, Buffalo, Douglas, Green River, Greybull, Lander, Mountain View, Newcastle, Powell, Thermopolis, Torrington, Wheatland and Worland.
State and national support
In the Big Horn Basin, stores in Greybull, Worland and Thermopolis had been scheduled for closure before the liquidation announcement, and the Wyoming Business Council had begun efforts to assist those communities that stand to lose important product categories along with jobs and sales tax revenue.
“When they announced all stores were closing, we certainly wanted to include Powell, and now we’re talking about seeing how we can make this a statewide thing,” Quick said.
The Wyoming Business Council is working with the National Main Street Center to provide market analysis and consulting.The effort will begin with data gathering to assess the main product categories Shopko provided and look at the existing business mix in communities to evaluate opportunities to fill the gap. In mid-April, Matt Wagner, vice president of revitalization programs for Main Street America, will meet with business owners and economic and community leaders.
“When we first started talking about this, not every Shopko was closing, but during this conversation, wow, this got bigger,” Quick said. “We certainly want to be able to provide as much support and services to everybody as soon as possible. It’s still in the planning stages, but it’s moving quickly.”
Christine Bekes, executive director of the Powell Economic Partnership, is grateful for the effort.
“This program is exactly what I was hoping to do, and I needed the support,” she said.
She said the liquidation is both a concern and an opportunity.
“I think there’s an opportunity to pick up some of that shopping that would otherwise leave our community,” Bekes said. “While you don’t want to have vacancies, from an economic development perspective, the vacant space does become an asset.”
The Shopko liquidation is the latest in what some have dubbed the “retail apocalypse,” which has seen thousands of stores close nationwide in the past decade, including such chains as Macy’s, JC Penney, Sears and Kmart.
Several Wyoming communities have pointed out that Family Dollar stores are their closest alternative to Shopko for general merchandise. But uncertainty surrounds those stores after Dollar Tree announced March 6 that it plans to close as many as 390 Family Dollar stores this year.
“There is no doubt that competition from the online shopping such as Amazon and big stores like Walmart is probably the main reason for the closure of brick-and-mortar stores,” Wenlin Liu, chief economist with the Wyoming Economic Analysis Division, said in an email. Liu noted that e-commerce accounted for 11.2 percent of total retail sales in the U.S. in the fourth quarter of 2018, up from 3.4 percent 10 years ago.
“To me, one of the opportunities that I see for rural America is supporting and elevating the capacity of our local businesses to do business on the internet,” Bekes said. “Some have figured it out, some are trying and some have not.”
Wyoming has seen a 10.1 percent decline in the number of retail stores in the state, from 2,628 in the third quarter of 2008 to 2,362 in the third quarter of 2018, according to Michael Moore of the Wyoming Department of Workforce Services.
“It’s probably true that rural states are more possible for these stores to get closed, more vulnerable and more susceptible to the closure,” Liu said. “In addition to the rural nature, Wyoming experienced three consecutive years of population declines between July 2015 and July 2018 because of the mineral-driven economic downturn. Since 2013, about 20,000 more people moved out of Wyoming than moved into the state.”
The loss of stores between 2008 and 2018 has cost the state 2,924 jobs. The state’s very low unemployment rate, which is about 4 percent, may take some of the sting out of coming job losses.
Along with job losses, retail closures pose an inconvenience for residents, particularly in rural areas, where older residents may have difficulty driving long distances or turning to the internet for shopping. And the loss of sales tax revenue can be a challenge for local governments.
“Sales tax revenue has dropped considerably over the last 30 years, and this is going to be another hit,” said Holly Borton, executive director of the Newcastle Area Chamber of Commerce. “I don’t think people really comprehend not shopping locally is hurting getting your street fixed in front of your house.”
Newcastle has a Family Dollar store, but the closest Walmart is 90 miles away in Gillette or Rapid City, South Dakota, Borton said. Newcastle’s Shopko store was a Pamida before the companies merged in 2012.
“We are looking at putting together an economic development group for Newcastle. We were looking at that prior to the shutdown of Shopko,” Borton said. “We recognize that economic development is where we really need to put a lot of focus right now. Small towns have to bring all of our resources together in order to really be effective.”
Cindy Porter, executive director of The Enterprise, the economic, business and community development agency in Douglas, said local businesses, including Hardware Hank and Bloedorn Lumber, have made changes such as extending their hours and expanding to meet customer demands. They are among a variety of local businesses that carry some of the same items as Shopko. Douglas also has a Family Dollar store that is “always very, very busy,” Porter said.
“I don’t know if this will encourage people to shop more with those businesses or if they will just take their business to Casper or do more shopping online. It’s hard to say,” Porter said of the Shopko liquidation.
Converse County has seen a spike in temporary workers as a result of energy-related projects, and local businesses have been flexing to meet the increased demand for services.
“There’s a lot of coming and going, so businesses are looking at ways to service their constant customer base, but then they’re also looking at ways that they can accommodate the temporary people that are coming in,” Porter said. “We have gone through a lot of booms and busts in Converse County. Most of our businesspeople have been through this before, so they’re understanding.”
While many of the Shopko stores have been in their communities for years, previously as Pamida stores, the Shopko store in Afton opened about five years ago in a newly constructed building near the Star Valley Medical Center.
“We were fine before they came, we’re glad they came, and I’m fairly certain we’ll be OK after they leave,” said Sarah Hale, executive director Star Valley Chamber of Commerce.
Shopko owner Sun Capital Partners Inc. reached out to Hale recently for leads on a possible occupant to rent the 32,000-square-foot building.
“I’m more interested in seeing local businesses and locally owned businesses. I’m a huge advocate for limiting chain businesses,” Hale said, noting that, perhaps, the medical center could put the building to use.
After Shopko opened in Afton, the King’s Variety Store there closed and a grocery store expanded at the former King’s location. There are three Family Dollar stores in Star Valley, which is a 60-mile region encompassing 13 communities.
Hale said the Shopko Foundation contributed to the local food pantry and Angel Tree programs, and its presence pushed the local business community to be more dynamic with enhanced customer service and products.
“I think if you’re in retail right now, between online shopping and those national chains, you have to be at the top of your game. You have to do something unique,” she said.
It’s too soon to know how the vacant spaces will be filled in each community, with ideas varying depending on location and community needs. Kit Armour, director of the Platte County Chamber of Commerce, said there may be opportunities for communities to work together and recruit a larger business to occupy multiple locations. But her preference, and that of other community leaders in the state, is to promote locally owned businesses.
“The idea I would love is to see a combination of things take place in that building; for example, maybe have part of it be for some pop-up businesses, maybe some home-based locally owned businesses, and maybe have a group share take place,” Armour said.
Community leaders throughout the state are preparing for the challenge.
“I’m always optimistic,” Armour said. “I always want to think that the best is going to happen. I’d like to think that it will have a positive outcome eventually. But I think that it will take awhile. I don’t think that it will be as quick as some of us would like.”