ARI SHAPIRO, HOST:
Across the country, small-town grocery stores are disappearing, largely due to shrinking profit margins and rising costs. In one small central Minnesota town, a young couple is testing a model that cuts costs and engages local residents. Minnesota Public Radio's Dan Gunderson reports.
DAN GUNDERSON, BYLINE: Alex and Caileen Ostenson moved to the small town of Evansville about five years ago to be closer to family. The local grocery store, in business for more than 70 years, had just closed. That meant at least a 40-mile round trip drive just to get basic groceries. So Caileen says the couple started brainstorming ideas to operate a store sustainably in the town of 600.
CAILEEN OSTENSON: We had just been hearing a lot from people, man, it would be nice if we had a grocery store back in town. That's something we really miss. It is a staple. It's a cornerstone, part of a community.
GUNDERSON: Alex is a diesel mechanic by training, but he likes problem-solving, so he looked to technology for a solution. People who buy a $75 annual membership get 24-7 access to the store through a phone app. Caileen demonstrates the phone app that opens the front door.
C OSTENSON: All you need to do is go up and press the button, and...
(SOUNDBITE OF BEEP)
C OSTENSON: ...It recognizes it. It unlocks, and you're good to go.
GUNDERSON: This small Main Street storefront is tiny compared to a traditional supermarket, but the shelves are filled with the basics, and customers can request special orders on a chalkboard hanging on the wall. Customers can scan items with their phone and pay using the app. There's also a key fob option and a scanner for those who aren't comfortable using their phone. The technology tracks customers and their purchases. Only members using their phone or fob to unlock the door are allowed in. The store also has security cameras, and theft has not been an issue. The store is staffed three days a week, but the focus is on anytime access. Alex Ostenson says the goal was to sign up 50 paying members in the first year. They hit that target in the first week.
ALEX OSTENSON: With the boost of memberships right off the bat, that is what partially funded our first inventory. So, you know, it helped us greatly right at the beginning.
GUNDERSON: Karen Howell and her husband were among the first to buy a Main Street grocery membership. She doesn't mind paying the $75 annual fee because the store saves a lot of 40-mile trips for groceries.
KAREN HOWELL: We don't do all of our shopping here because they aren't able to carry everything that I might want to buy. But we try to support them any way that we can because we are so proud to have them here.
GUNDERSON: Brandon Borgstrom is administrator at the local nursing home. He says with a busy life, the local store is a convenience worth paying for.
BRANDON BORGSTROM: It's nice to go grab milk, eggs, bread. Or, you know, it's Sunday afternoon, and you're sitting down for dinner. You realize you don't have, you know, mushroom soup for the green bean casserole you're going to make - you know, so just those little things that add up.
GUNDERSON: The store plans to expand offerings of local produce and locally produced things like honey and butter. Caileen Ostenson says they've worked hard to overcome the perception that a small grocery is like a convenience store with limited choices and high-cost items. She says first-time customers are often surprised.
C OSTENSON: They realize, wow, these prices are there a lot less than what I expected. And, oh, oh, yep, they have this, and they have that. And we try to make sure to stock the basics for sure and then just grow and go from there.
GUNDERSON: Cathy Draeger studies the viability of rural grocery stores at the University of Minnesota. She thinks this model is a good one to try to replicate.
CATHY DRAEGER: Especially during times when gas prices are going high and there is a worker shortage, I think this is a really great innovation.
GUNDERSON: Alex was recently awarded a two-year Rural Innovation Fellowship through a nonprofit. The stipend will allow him to stop working as a mechanic and now focus on working to expand his self-serve grocery model to other small towns. For NPR News, I'm Dan Gunderson in Evansville, Minn.
(SOUNDBITE OF THE KILLERS SONG, "HUMAN") Transcript provided by NPR, Copyright NPR.