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2011 Montana Profile: Independents Fighting Back With ‘Fair Prices, Friendliness’

Lake McDonald Montana
Nine IGA retailers operating in Montana were named 2011 IGA Five-Star Retailers, bettering the state’s performance of 2010, when seven of the state’s independent grocers earned the distinction.
[gn_note color=”#66cc66″] The 2011 Montana Profile originally ran in the July 2011 edition of The Shelby Report of the West. Due to reader requests we will be posting our Profiles from each edition of The Shelby Report. The profile will be published on theshelbyreport.com one month after it has run in print. [/gn_note]

by Katie B. Davis/staff writer

Nine IGA retailers operating in Montana were named 2011 IGA Five-Star Retailers, bettering the state’s performance of 2010, when seven of the state’s independent grocers earned the distinction.

The 2011 honorees include: Big Horn IGA in Hardin, owned by Reese LeaVesseur and Ray O’Loughlin; Everyday IGA in Great Falls, owned by Richard Chadwick; Gary & Leo’s Fresh Foods in Conrad and Florence and Gary & Leo’s IGA Plus in Havre, owned by Gary Leland; Milligan’s in Absarokee, owned by Jerry Gardner; Reese & Ray’s in Laurel, owned by LeaVesseur and O’Loughlin; Vans IGA Great Falls East in South Great Falls, owned by Paul VanderJagt; and Walter’s in Sheridan, owned by Bob Walter.

“Montana has a lot of small one-store towns,” supermarket industry analyst David Livingston told The Shelby Report. “Independents make up a lot of these operations. URM, Supervalu and Associated (Food Stores) of Salt Lake supply a lot of these stores. They are in the business of feeding the rural population.

“The population density in Montana is very low. There are no large metro areas of dense population. Walmart is naturally going to have stores in many of the county seat cities, then perhaps a few conventional stores here and there.”

According to VanderJagt, who owns seven supermarkets in the state, the biggest challenge for independent retailers in Montana are the scattered Walmarts and Albertsons they compete with for residents’ grocery dollars.

Currently, Wal-Mart Stores has 11 Supercenters, two discount stores and two Sam’s Clubs in Montana employing approximately 5,014 people, while Albertsons has 46 locations.

In the last year, Walmart remodeled its stores in Billings, Bozeman and Helena.

Also, the Arkansas-based mega-retailer spent nearly $1 billion—$99,933,560—for merchandise and services with 656 suppliers in the state of Montana in FY 2011 according to data compiled by Dun & Bradstreet.

However, the competitive edge goes to the independents in VanderJagt’s mind ­because of three things: service, quality and friendliness.

“Nobody can beat (Walmart) on price,” VanderJagt told The Shelby Report. “So we just concentrate on the three important factors. We just want to keep upgrading and promoting, and giving the customer a nice place to shop with fair prices.”

VanderJagt’s stores feature bakery, floral, service, deli and seafood departments, gourmet cheese bars, meat smokehouses, pharmacies, ATMs, pet sections and photo and video centers.

Fair pricing is exactly what the Blackfeet Tribe in northwest Montana had in mind when it finalized plans in early May to go into the grocery business in Browning.

Browning is also home to Teeples IGA, which has been in business for more than 70 years and is part of a family-owned chain of six stores based in Helena.

Blackfeet Tribal Business Council executive secretary T.J. Show said to the Great Falls Tribune that Glacier Family Foods—the new store’s moniker—should mean lower prices.

“We feel prices are higher at the other grocery store because they’re the only game in town, a monopoly,” Show said. “The people are the ones who are going to benefit from the stiff competition.”

According to the paper, the store will be about 28,000 s.f. and employ 30-60 people. Glacier Family Foods will carry Western Family products.

Building the new tribe-owned store is expected to cost between $5-$6 million. According to the Tribune, groundbreaking is slated for June and construction is ­expected to be complete around December.

“We’re hoping with the price of fuel, people will start shopping locally again,” Show said to the paper.

As of press time, gas prices in Montana ranged from a low of $3.62 at the Costco in Billings to $4.09 at Auto-Tech Services and Cenex gas station in Plentywood.

Average retail gasoline prices in Montana fell 0.2 cents per gallon during a week in late May and now sit at an average of $3.76 per gallon. This ­compares with the national average that fell 3.2 cents per gallon to $3.77, according to gasoline price website Montanagasprices.com.

Gas prices in Montana are still 87.7 cents per gallon higher than the same day one year ago and 11.9 cents per gallon higher than a month ago. The national ­average has decreased 13.7 cents per gallon ­during the last month and stands $1.04 per gallon higher than this day one year ago.

According to Livingston, Show’s hopes might just remain wishful thinking.

“We have this argument about gas prices every two to three years and then forget about it,” he told The Shelby Report. “The theory is that (high gas prices) will benefit the small town stores because people can’t afford to drive to Bozeman and Missoula (to shop).

“But the small-town store will just raise their prices as demand picks up so in the end, it doesn’t make a difference. Over time people adjust, get more efficient cars, and it’s all a wash in the end. Those monthly 100-mile trips to Walmart will continue no matter what, especially in Montana.”

Montana good for business, job growth

Montana had a near record high total of $1.96 billion in exports in 2010, according to a release from Gov. Brian Schweitzer’s office. This is a 33 percent increase over 2009 figures, making 2010 the second highest export year following Montana’s record high peak of $2.06 billion in 2008.

“Montana’s exports continue to show exceptional growth in the worldwide market,” said Schweitzer. “The increase ­represents over $80 million in business for Montana. This is ­positive news for our producers, manufacturers and our overall economy.”

Included in the top 20 exports for 2010 for Montana was bulk wheat ($541.1 million) at No. 1, cereals ($26.6 million) at No. 11 and at No. 20, edible vegetables ($8.7 million).

In accordance with the governor’s released positive economic news, Montana ranks 28th in the annual ranking of the best states for business as judged by 500 CEOs for the magazine, Chief Executive.

Business leaders graded the states on a variety of categories grouped under ­taxation and regulation.

Also, among 243 small cities nationwide and according to a survey by Newgeography.com, Great Falls ranks 48th, Billings ranks 93rd and Missoula 152nd—all lower than last year—as the best cities for job growth.

According to the website, the rankings are derived from three-month rolling ­averages of U.S. Bureau of Labor Statistics “state and area” unadjusted employment data reported from November 2009 to January 2011.

Unemployment numbers high in western Montana

As of April, the unemployment rate in Montana was 7.4 percent; however, several of the state’s western counties continued to have double-digit rates.

According to the Montana Department of Labor, Lincoln County had the highest jobless rate at 19.3 percent, followed by Sanders County at 18.3 percent, with Mineral County and Big Horn County tied for the third highest unemployment rate at 13.3 percent. Flathead County had the fourth highest percentage of people out of work at 13.1 percent.

Granite and Lake counties also stayed among the hardest hit counties as well, with each posting a 12.4 percent unemployment rate in March. Missoula County checked in at 8 percent, with Ravalli County seeing a 10.9 percent jobless rate.

Across the nation, Montana ranks 14th, tied with Wisconsin and Alaska for ­unemployment rates, according to agency records.

“The number of Montanans who are working increased by 1,300 jobs (in April), which is the largest over-the-month job growth since the recession started,” said Labor Commissioner Keith Kelly in a press release. “Nearly every industry posted job gains. However, the unemployment rate remained constant because over 1,100 Montanans have re-entered the labor force and started looking for work in March. Overall, there were 1,300 more paychecks this past month.”

The labor department estimated the number of Montanans working increased by 1,301 jobs and 1,126 people re-entered the labor force and started looking for work.

Also on the rise is the price of goods, the agency ­reported. The seasonally adjusted Consumer Price Index increased by 0.5 percent for the second straight month in March, led by large increases in both food and energy.

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