The town of Erie, Kansas has a population of around 1,500.
The town is quiet and easygoing, and folks say visiting Erie is like taking a step back in time to simpler days.
The pandemic hurt businesses all over the country both big and small, especially mom and pop grocery stores.
That’s because grocery stores operate on thin margins, especially ones that are not part of a retail giant.
That is why in 2020, Erie’s single grocery store was set to close until the local government stepped in.
Most of the town’s residents would be forced to drive 30 miles round trip to the next closest store for grocery shopping.
So, the city’s government took a poll of residents asking if they thought the city should purchase the store.
Over 70% of residents supported the city buying the grocery store.
The idea was that the store wouldn’t have to worry about making a profit now that it was government-controlled.
Folks believed that if the store made enough to cover its operating costs that was all that mattered.
In the end, the city-run grocery store would pass on the savings to the residents – at least that was the hope.
According to city records, the grocery store turned a profit the first few months after the city took it over.
However, after the excitement of the city buying the store dried up, customers returned to shopping at Walmart and other retailers.
In 2022, the city-run Erie Market lost $132,000. It was only profitable for one month. In 2023, the renamed Erie Market was losing money every month.
The store faced competition from Walmart and Dollar General.
So, the Erie Market even slashed prices and opened a salad bar in an attempt to attract more customers.
And even with the store losing money, local leaders refused to give up.
One city council member said, “Without a grocery store, what are we going to do? It would kill this small town and it’s hard enough to keep it alive as it is.”
Now, I’m no math major, but eventually, the city will be forced to close the Erie Market.
I imagine that a small city doesn’t have the budget to continue to lose that amount of money.
Now, Erie, Kansas is not the first city to think it can run a grocery store.
Chicago has launched a study to determine the feasibility of opening a city-owned grocery store to jump-start economic development in low-income neighborhoods.
The city has seen an uptick in grocery stores closing because of low-profit margins and theft.
I’m not sure how the city thinks that owning the grocery stores would fix these problems.
But these socialist ideas don’t ever work in practice.
From the Soviet Union to Venezuela, we have witnessed that governments can’t effectively run grocery stores (or much else for that matter).
Politicians like to think they know better than us, and Erie, Kansas won’t be the last place that governments try to control food.
In fact, aside from trying to run grocery stores, here are a few other ways the U.S. government could attempt to control food (and how badly it could go if they do):
Government grocery stores:
Politicians don’t think in terms of operating a successful business with margins and profits.
When politicians want to spend money, they simply ask for it. Hence, the U.S. is trillions of dollars in debt.
The government is terrible at operating a balance sheet.
Look at the Erie Market. Yes, the city can fund it, until the market bleeds the city dry.
Government-controlled grocery stores will be unprofitable.
They will either lead to government subsidies, or they will have higher prices to compensate, and lose to the free market.
Logistics:
I have two words for you: Hurricane Katrina.
It took FEMA days to get medical supplies to the Superdome. Plus, after Hurricane Katrina FEMA threw away millions of dollars’ worth of unused ice.
Unless it’s the military, the U.S. government is not great at logistics.
Most grocery stores have an inventory of more than 40,000 items. Some of these items such as milk and produce are delivered daily.
Plus, a lot of government purchases have to be put up for bid.
So, let’s say a grocery store runs out of milk and the store needs a new supplier. It might have to go out for bid, and who knows how long it would take.
Production:
The thing is, local governments around the country have passed laws related to diet restrictions such as soda.
For example, in California, restaurants must offer milk or water with children’s meals.
These can only be substituted if the customer requests.
Now, I’m not a huge soda drinker, but diets should clearly be up to individuals and the government should stay out of our way.
If the government controlled the food production, they might only produce the foods that they think are best for society.
Or they could use the means of production to force food choices on people.
Even worse, the government could use food availability to reward or punish people who “fall in line” with their agendas.
We’ve already seen the government weaponize agencies to punish political opponents.
Giving government control of food would be holding a gun to our own heads.
The reality that politicians are floating the idea of the government controlling food is scary.
I bet we will see more local governments try it, which is why it’s more important than ever to be self-sufficient with food production.
You need a supply of long-term food on hand. Start with a one-to-three-month supply and build from there.
The goal should be a year’s supply.
