THE SOURCE: The Arctic Sounder

Ukpeaġvik Iñupiat Corporation has announced it plans to enter into a new contract with Begich Capital Partners to operate Utqiaġvik’s local grocery store starting this fall.

That means a move away from Alaska Commercial (AC) Company, which has managed the store for many years.

“This will be an exciting relationship amongst Alaskans who are committed to increasing access to fresh, affordable groceries in rural Alaska,” wrote UIC and Begich Capital Partners in a joint release.

The switch is expected to happen on Nov. 1, with store closures lasting no more than 48 hours for the transition and overhaul.

“As soon as we know any of the details of what that timing is, how long it will be, what it means, we will make sure to work with folks in the community to make sure everyone is aware,” said Rachel Barinbaum, a spokesperson for Begich Capital Partners. “What we don’t want are any surprises.”

The announcement comes after UIC put out a request for proposals to take over store operations. AC, which has overseen the store for more than a decade and a half, put in a proposal, as did Begich Capital Partners.

“We saw from our firm’s perspective, especially over the years of work I’ve done in rural Alaska, it seemed the price of food and other products in Alaska — especially rural Alaska — seemed to be expensive, out-pricing what it should be,” said Mark Begich, chairman of the board for Begich Capital Partners and president and CEO of Northern Compass Group. “We started thinking of a new idea, a creative way to approach the delivery of food service foods in rural Alaska and other products.”

Begich said they plan to partner with vendor JB Gottstein, which is backed by Albertson’s, for the store’s products.

“We thought we had a different model where we can give (UIC) a fair rate of return and a decent rent, but also lower the cost of goods,” he said.

Begich said he couldn’t discuss details of the business plan at this point, but hoped prices for some essential food items could be 25-30 percent lower than they currently are.

“We believe that we will be able to bring lower-cost essential goods. And what I mean by essential is things like milk, bacon, bread, pilot bread,” he said. “We will utilize the Women, Infants and Children (WIC) list as a guideline, because that gives you a good list of products that are deemed to be nutritional and important for people to be able to live. But we will also augment that with what we consider essential goods for rural Alaska, which might not show up on the WIC list — a good example is pilot bread. So, we’ll use those and what we’ll do is we’ll add just a small percentage above the cost to get them there in order to lower that cost down.”

He said the group also plans to focus on community engagement during the transition period and once the store is open. They plan to reach out to the community for helping naming the store and plan to have areas dedicated to local arts and crafts within the space, once it opens.

“(We want to) give them some dignity and display and marketing to help move local products created within the community to a broader market,” he said.

When asked if there was a store or chain after which the group was modeling their business plan, Begich said not really.

It stemmed from personal frustration about the way grocery stores are managed throughout rural Alaska, so he said he hopes this will become the model for future stores.

“In Alaska, because the market has been pretty much controlled by a couple groups, what we’ve come up with is what we’d consider a community-based model. It is a business. It will make some money. But it will really be focused on how do we engage with the community to make sure they have the products they want, but also the community store is part of the community, not just there extracting dollars out but actually contributing and participating in the community,” he said. “There’s no real model like this, to be frank with you.”

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