BETHEL -- The lone big grocery store that will be operating in this Western Alaska hub community after Friday won't raise its prices but does expect a boost in business with competitor Swanson's closing, an executive with Alaska Commercial Co. said Tuesday.
The reasons behind the closure of Swanson's haven't been explained. Neither Omni Enterprises Inc. -- the employee-owned company that ran the store -- nor Bethel Native Corp. -- builder and owner of the modern new building that Swanson's moved into last summer -- responded to requests for interviews Monday and Tuesday.
Is Bethel too small for two full-scale grocery stores? Did Swanson's fail to lure enough customers at its new location? Was it overextended because of lease payments to both Bethel Native Corp. for the new space and to Sea Lion Corp. -- the village corporation for Hooper Bay -- for the old grocery store building now being used for storage?
And what will happen to the modern new Swanson's space?
As Bethel searches for answers, the AC Value Center is making plans to increase its inventory to accommodate the competition's customers. Contrary to fears expressed on Facebook and in the Swanson's checkout line, AC doesn't have a new, higher price list ready to go, said Walt Pickett, Alaska Commercial's vice president of operations.
"We have absolutely no plans of raising prices due to the change in the competitive situation in Bethel," Pickett said Tuesday.
He spoke to the Bethel store manager Tuesday and plans to make his regular monthly visit to the community Wednesday. The AC store is fully staffed but is taking applications, he said.
"If the business warrants, we will for sure be adding to our staff," Pickett said.
When the new Swanson's opened June 30, the AC store initially saw a drop in business -- but not for long, he said.
"Within a month we had regained our business," Pickett said. After that, it grew, he said.
Alaska Commercial Co., part of Canada-based The North West Company Inc., owns its building. The AC store expanded and renovated its space last year, and GCI as well as the electric utility, the Alaska Village Electric Cooperative, moved in, joining longtime tenant Alaska USA Federal Credit Union. All of that helps bring in customers.
The AC store is in the heart of Bethel, and one complaint has been that inebriates sometimes gather there. That's been addressed, Pickett said. The store has hired two security staff members.
Operating in rural Alaska is expensive, with energy and transportation costs that keep rising. At the AC store, electric bills last year amounted to about $750,000, and the heat bill another $200,000, Pickett said.
David Gottstein, whose family started the grocery wholesale business in Alaska that later joined with the Carr family retail side, said Tuesday that grocery store success generally depends on the cost of rent or mortgage payments, and the volume of goods that must be sold to support the business.
While he's been out of the business since 1988, he remembers the challenges, even in Anchorage.
"Thirty years ago, we opened a Carrs store at Dimond and Jewel Lake," Gottstein said. "We were the first out there then."
Competitor Safeway then moved into rented space nearby, in a new building. "They closed within a year," Gottstein said, "because they could just walk away."
Years ago, Calista Corp. -- the Alaska Native regional for-profit corporation for the Yukon-Kuskokwim Delta -- was an investor in a regional wholesale food cooperative, Western Alaska Villages Enterprises. It aimed to buy food and goods in bulk to bring better prices to village stores.
"The Costco concept," said Calista spokesman Thom Leonard. But the effort, which wasn't run by Calista, faltered and ended after a few years.
In Bethel, AC is interested in taking over part of the soon-to-be-vacated Swanson's, Pickett said. It could operate a convenience store in the space with essentials like bread and eggs. Swanson's is across from the hospital in Bethel's medical district, and that part of town needs a store too, he said.
Pickett said he hopes Bethel residents "trust us … that we're not going to go in there and suddenly raise every price in the store."
Omni plans to continue to run other Swanson's ventures in Bethel, including the hardware store, furniture store, lumberyard and snowmachine dealership, said Casey Cruz, manager of the Swanson's grocery store. And the movie theater in the Kipusvik complex that included the new Swanson's will remain in business, according to its manager.
On Tuesday, the name changed for a Bethel Facebook group created to monitor retail prices between the two main stores and two smaller ones.
Now it's just "AC vs Sammy's vs Corinas." Swanson's is no longer on the consumer watch list.