Business

High gas prices may boost rural retailers

Residents in once-sleepy Thomasville have started complaining about traffic jams on Route 43, which runs through town.

Much of the new traffic is coming from shoppers, squeezed by $4-per-gallon gas, who are staying closer to home instead of driving 100 miles each way to the nearest malls in Mobile or Montgomery.

“I just don't drive as much,” said Herman Heaton, a 72-year-old retired lumber mill worker, leaning against a Chevy Silverado pickup that now costs him $80 to fill up. “We don't go to Mobile as much as we used to for shopping.” Heaton said he now spends about $600 a month on gas, about 10 percent of his income and about double what he spent last year.

So he's shopping locally.

Many stores in rural towns – from small independent shops to local chains – are starting to enjoy a little life after years of seeing customers bypass them for distant malls. While it may not reverse the decades-long decline of small-town shopping, it could lead national mall developers and merchants to rethink where to build and challenge a basic tenet of retailing: Build, and shoppers will come from miles away.

“The whole retail logic has been to build big mass stores that drew from a huge distance,” said Robert Robicheaux, an economic development specialist at the University of Alabama. “Now, we need to reconsider that.”

Some small shops in Thomasville, population 5,500, report more customers as shoppers check out local options first instead of heading further away.

“We are out in the middle of nowhere, but we are a unique market away from the metro areas,” said Thomasville Mayor Sheldon Day, a former Wal-Mart store manager who is trying to revitalize the town with additions such as a new civic center. He wants to get chains like J.C. Penney and Target Corp. to open locations in town so that residents don't go elsewhere.

Thomasville is already seeing a 5 percent increase in sales tax revenue so far for the fiscal year that ends Sept. 30.

Matthews-based Family Dollar Inc., which operates 30 percent of its stores in rural areas – typical of discount chains – says that its rural locations are outperforming the chain as a whole. And Rita Postell, spokeswoman for the Piggly Wiggly Carolina Co. supermarket franchise chain, which operates 113 locations in Georgia and South Carolina, says that some stores in rural areas near Spartanburg, S.C., have enjoyed a recent rise in sales, after long struggling with declines.

Based on his conversations with store executives, Burt Flickinger III, managing director of consulting firm Strategic Resource Group, said other discount and dollar stores are seeing their rural locations doing better than their overall business.

“Rural retail centers are likely to see a lot more traffic as consumers are not willing to make the long commute to the big city,” said Michael Hicks, associate professor of economics at Ball State University in Muncie, Ind.

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