Life for small rural stores has always been tough, but with the economic crisis hitting jobs, prices and consumer spending, traditional stores in rural areas are operating against one of the most challenging backdrops in recent times and many are failing to keep their heads above water.

Rural stores are closing at a rate of almost 300 a year, leaving many communities without easy access to groceries, services and, most importantly, a heart.

However, under the surface a retail revolution is stirring. A new and rapidly growing generation of stores, owned and run by unpaid local people, is rising to the challenge.

There are now more than 210 community owned stores in Britain alone, 20 of which are new this year, and that's just that start of it.

Retail industry experts predict that unless better support for independent rural stores is secured, the number of community-owned outlets will balloon over the next decade as more commercial units are driven to the wall.

The demand for community owned stores is already so high that social enterprise support group The Plunkett Foundation has extended its specialised funding programme for community stores until 2012.

The Village Core programme allows communities to apply for a grant of up to £40,000 to establish their own shops.

"These types of stores, which have minimal start-up and labour costs, but provide such a valuable service for the communities they serve, really could be the future," says Plunkett's Elizabeth of Mar.

In more than 60% of cases, less than £50,000 is needed to get a community store up, running and profitable and they can crop up literally anywhere. There are shops in former stables, churches and even a converted bus shelter in the case of an award-winning shop in East Knoyle, Wiltshire.

Old idea

The concept of community owned stores is not a new one. The first stores to be funded by ViRSA (now known as Rural Community Shops) appeared on the scene in the early 1990s.However, today's community owned stores are a different breed. While most are still staffed by unpaid volunteers, they are now supported by computer systems, training schemes and business plans that the most experienced retailer would be proud of.

"It would be wrong to dismiss people running community stores as amateurs," says Ken Parsons, chief executive of the Rural Shops Alliance. "Volunteers often receive good training and provide at least as good a service as the assistants in some commercial shops on national minimum wage."

"This is certainly not playing at shops," adds of Mar. "In order to be sustainable they need to be properly run and have a detailed understanding of retail processes."

And when run efficiently, these types of stores can certainly turn over impressive amounts.

Just ask Alun Evans, chairman of the Almondsbury Community Shop Association in Bristol. With the help of local people, former retail management consultant Alun opened a new community store in March. Seven months on and sales are "flying". The 300sq ft store has already turned over more than £130,000, with a gross margin of 27%. It has a comprehensive range of groceries with competitive price points, thanks to the establishment of a local buying group. "We recognise that promotions are important and run a number of these," says Alun.

And with almost 50 unpaid volunteers on the store's rota, Alun has also recognised the need for a comprehensive human resources strategy, as well as training courses. "We are also about to install a new till system and full epos," he adds.

However, Alun is one of the first to admit that running a community owned store is far from a walk in the park. Organising the weekly rota for a team of 10 paid staff is challenging enough, but organising 50 different people to work on different days, at different times and for no money, really does want to make you reach for the aspirin.

And that's only a small part of the headache. Community owned stores exist to benefit the community and that involves its local producers as well as residents.

"Community owned stores are the best medium through which local producers can market their wares," adds of Mar. "About 15% of the stock in an average community-owned shop is local, compared with a far smaller percentage in the average supermarket."

For this reason many community owned shops have become destination stores in their own right. But stocking a wide range of local products throws up its own set of challenges. "Small local suppliers are often not set up for big production, meaning that it can be difficult to ensure continuity of supply," Alun says. "We know we can get some excellent organic beef from a farm near us, but often we can't get enough of it, which is frustrating for us and customers."

And, of course, stores have to remain competitive. Even the most loyal customer won't keep paying above the odds for products they can buy for less at the supermarket.

"We know how important it is to offer competitive prices so we have to work doubly hard to buy well and be at the top of our game," says Alun. "We look at all of our invoices in great detail, checking the wholesale price against our margins. If it shoots up then we take our business elsewhere. There's no room for complacency."

One of the biggest challenges that community owned stores face is keeping up the excitement and support. "Community owned stores exist because local people have cried out for them. However, the fact that they were wanted in the first place doesn't give them licence to just sit back and relax," explains Alun. "We have to work tremendously hard to engage with the local community and shout about all that we've done from the rooftops. Self-promotion is vital, whether you are a community owned store or a commercially-run business."

So what do independent retailers in rural parts think of their community owned cousins? Well, the general consensus is bitter sweet.

"The key point is that community shops run only when the commercial operation in the village has disappeared, or is under threat," says award-winning rural retailer Alec Gardner. "Community owned stores do a fantastic job and really do benefit the areas they serve, it's just sad that it takes the closure of a commercial store for people to appreciate their local shops."

Expert opinion

Ken Parsons, chief executive of the Rural Shops Alliance

"The way forward is for the government to recognise the immense social and environmental value of village shops a community with a shop is a very different place from one that has lost it.

"Since responsibility for supporting the sector was transferred from the Countryside Agency to the Regional Development Agencies a few years ago, support for rural shops has collapsed over much of the country most RDAs do not see it as a priority.

"Rural shops whether run commercially or as a community enterprise are a vital part of the rural infrastructure and need to be encouraged. Unless this happens the number of community run shops will increase massively over the next few years as the pressures on commercial shops in smaller settlements increase."

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