Rural Iowa Shopko Closings Will Mean Fewer Shopping Options

Mar 1, 2019

Retail giant Shopko is closing about 250 stores across the country after filing for bankruptcy in January. Two dozen of those stores are in Iowa, and 22 are Shopko Hometown stores, smaller-format locations designed for smaller cities and towns. Rural Iowa communities fear the closures of these general merchandise stores are going to hit them hard. 

Di Lenz lives about 10 miles outside of Onawa, a city of 3,000 people in western Iowa. She browses the aisles at the Onawa Shopko Hometown store at least twice a week.

“So many times when I go out there I can find whatever I need from shoes to clothes to jewelry to makeup, kitchen goods, housewares,” Lenz said.

On Valentine’s Day and St. Patrick’s Day, Lenz buys holiday decor and window clings from Shopko. The store is even her go-to place for Christmas gifts. She buys everything from trinkets to ceramic mugs to funky socks for friends and family.

“You can find some very unique items out there and people will say ‘Gosh this is great, where did you find it?’ ‘Well I found it at Shopko!',” Lenz said.

When the Onawa store closes for good in mid-April, she will have to drive 45 minutes north to Sioux City to get a lot of those things. Lenz says she’s devastated that the store is closing.

“I work two jobs and I just don’t have time to be inconvenienced to go elsewhere to buy the things that I need,” Lenz said.    

Di Lenz lives outside of Onawa and frequently shops at the Onawa Shopko Hometown. She says nine times out of 10, she finds everything she is looking for.
Credit Katie Peikes / IPR

Lenz is not the only one who is unhappy. More than 1,200 people have signed an online petition to keep the Onawa Shopko Hometown open. There is even a paper copy in the store for people to sign. 

Jenn Collison, the director of the Onawa Chamber of Commerce, is at Shopko picking up one of the copies to send to their corporate headquarters. The petition has a bunch of signatures from a number of nearby communities.

“Turin, Iowa – that’s another town that has a secondhand store and a pop machine, so they have nothing,” Collison said. “Castana, they have a pub…”

Collison launched the petition in January. She says the upcoming closure is crippling – not only for the people who will have to drive farther, but also for the local economy.

“Having Shopko here, I think makes a lot of people stop and do other things in town, spend other money here,” Collison said. “If we don’t have Shopko, maybe they won’t come here to get their medicine filled, to get gas or to get groceries. They may go somewhere else. And that’s going to hit our economy hard.”  

"I do think there's going to be some opportunities on Main Street to fulfill some of those needs." -Bill Anderson, Cherokee Area Economic Development

Shopko is closing many of its less profitable stores, including Onawa. Iowa State University Economist Dave Swenson says these closures are usually the “symptom” of decline in rural economies, not the “cause."

“It’s more that the region is contracting in population, contracting in purchasing power and making decisions to buy goods and services outside of the economy,” Swenson said.

When people leave to shop elsewhere, a “leakage” happens. Swenson says that's when a sale that could have occurred in one town happens in another.

“Rural economies, rural communities try to stem their leakages by maintaining or enticing people to shop locally,” Swenson said.

That’s exactly what another Iowa community where Shopko is closing is hoping to do. 

At Shopko Hometown in Cherokee, a lot of the aisles are empty. The store feels small. This Shopko closes on Saturday, March 2.

Bill Anderson, the executive director for Cherokee Area Economic Development, says it’s a major loss to the city of 5,000 people and the county as a whole. But he’s trying to be positive. He says local businesses have a chance to step up.

“Obviously we’re not going to ask a farm store to carry makeup. That doesn’t fit within their business model. Ladies boutiques downtown could look at carrying a makeup line,” Anderson said. “I do think there’s going to be some opportunities on Main Street to fulfill some of those needs.” 

"The threshold population for them to be profitable is just simply very large." -ISU economist Dave Swenson on whether a chain merchandise store like Target could replace Shopko in rural Iowa.

Anderson is also hopeful the owner of Shopko’s building will find a new tenant quickly that can meet Cherokee’s needs.

It’s unclear what the owner’s plans are. But Dave Swenson from ISU says it’s just not economically viable for larger general merchandise stores like Walmart and Target to exist in communities as small as Cherokee or Onawa.

“They’re not going to because the threshold population for them to be profitable is just simply very large,” Swenson said.

Back in Onawa, Di Lenz says she’ll be able to buy trash bags, paper towels and even birthday cards from her local Dollar General store, but it’s no replacement for Shopko. With the petition to keep Shopko still out there, she’s holding out hope.

“I am very hopeful that this will all be like a Hallmark Christmas movie and there will be a miracle at the end and somebody will show up some day and say, ‘we are going to keep this Shopko open because we understand how much it means to this community’,” Lenz said.

A community that has until mid-April to get its miracle.