Second business boosting grocery sales during economic downturn

By Robert Williams

Editor

Aside from stocking up for holiday dinners, the end of the year is somewhat of a slow season for Frazee Family Foods. The grocery store does a lot of work with area organizations to help people in need as the holiday season approaches.

“The school and Mahube-Otwa do some giveaways for families that can’t afford food that we help out with and the churches do a lot,” said Owner Heath Peterson. “The churches are a big thing right now with their help with food because of everything that is going on.”

Some churches are making pre-made dinners and others utilize vouchers through the grocery store to assist families.

“Money is just not out there right now; it’s tough out there,” said Peterson.

Price tags in grocer and other stores can be a frightening sight for families trying to get by, but that problem is nearly the same for those running the stores.

“I 100 percent agree and I feel so bad for them,” Peterson said. “We have to do what we have to do to pay the bills and right now this is probably worse than we went through the recession in 2008.”

The current state of the economy is experiencing mixed signals, with positive gross national product (GDP) growth in the second quarter of 2025 but concerns about inflation, consumer sentiment, and a potential “two-tier” economy. Recent data shows GDP grew at a 3.8% annual rate in the second quarter, driven by a decrease in imports and increased consumer spending. Consumer confidence has hit a three-year low and inflation is accelerating, especially for lower-income households.

Peterson has seen big changes in what customers would consider basic staples of a grocery store. Those changes are due to both production issues and the adverse effects of governmental influence on markets.

“Coffee, if you look at it, has doubled over the last year; it’s a combination of things—there’s a shortage of coffee beans and tariffs. I don’t care what people tell you it does trickle down to the customer,” Peterson said. “For us, this is probably one of the hardest years we’ve had since we opened the store. We’ve had to make a lot of changes to how we do things and try new things.”

The turbulent economy is affecting more than just small town businesses.

“What scares me more than anything is even Target is way off expectations; even your big boys—Walmart won’t talk about it,” Peterson said.

Heath and his wife Laura have made major changes to keep groceries in Frazee in the past few years, including closing their store in Osakis, upgrading the refrigeration and freezer sections of the store and future plans include interior improvements like new flooring. The biggest change they made was opening Lucky Bubble laundromat as a complementary business to the store.

That decision had a much bigger and positive impact than the Petersons expected.

According to Peterson, the laundromat is helping to keep the grocery store afloat.

The Bubble is open 24 hours, has 10 washers and dryers available for use as well as laundry detergent machines, and a coin machine.

Another positive aspect is the new additions in the East Main Avenue retail building that has brought more traffic to that side of the main drag.

“That’s been nice to see, just seeing Main Street full most days,” Peterson said. “You can tell Mondays and Tuesdays when the bakery isn’t open. There are a lot less cars.”

Peterson is also Chairman of the Frazee Economic Development Authority where he continues to push for more housing projects in the area as a means to improve the local retail climate for his business and Frazee as a whole.