The Alabama Grocers Association partnered with Auburn University in 2022 to conduct an economic impact study of the grocery industry in the state. Total grocery industry employment is more than half a million people, with an annual payroll of over $2.5 billion, said Ellie Taylor, president of AGA.
Total state tax revenues are more than $1.1 billion per year, with a total economic impact for the state of more than $12.1 billion.
“Knowing this data is critical in conveying to lawmakers the impact of our industry,” she said.
Taylor shared that the AGA has four top legislative priorities in 2023.
“Those include ready-to-drink legislation for low-ABV spirit beverages, the Organized Retail Crime Bill, which will create specialized felony levels related to shoplifting, updates to the grocery curbside delivery legislation and the removal of the 4 percent state tax on groceries,” she said.
With the Alabama legislative session starting March 7, Taylor said the AGA will monitor pre-filed bills and those filed throughout the session that would have a negative impact on the industry.
Economy strong
The economy in Alabama has come out of the COVID-19 pandemic in a show of strength, with a $2.7 billion overage in the Education Trust Fund, according to Taylor. She said state lawmakers are in the process of deciding how to distribute those funds back to residents.
“The ideas being circulated right now include rebates for taxpayers, modest tax cuts, one-time investments in education and a change in the way Alabama funds K-12 education,” Taylor said.
According to the Alabama Business Center for Business and Economic Research, Alabama’s economy is expected to increase by about 1.1 percent, with employment growing at 2 percent in 2023, she added.
In the grocery industry, Taylor said Alabama operators are continuing to face pandemic-related challenges with supply chain and labor. There does seem to be some improvement in the supply chain, she said, with fewer items having shortages.
During the pandemic, the AGA collaborated with Alabama Labor Secretary Fitzgerald Washington to provide resources to its members.
“In January, ADOL announced a 54 percent unemployment insurance tax cut, which will drop the state to the lowest rate in the tax schedule. This is great news for Alabama companies,” she said. “Money from federal ARPA funds was used to fill the gap in the unemployment fund caused by the pandemic. Currently, Alabama has a 2.8 percent unemployment rate.”
Taylor said transportation continues to be an issue, as well, but AGA is hopeful that the legislation passed last year, which allows 18-year-olds to obtain CDL licenses to drive intrastate, will help.
On the topic of inflation, Taylor said the U.S. Inflation Calendar reported the average price of food in the United States increased by 10.4 percent in 2022. Factors including the labor shortage, supply chain disruptions, energy prices, severe weather events and the war in Ukraine all have contributed to these rising prices, Taylor said. Most recently, the avian flu has “caused havoc” in the egg and poultry industry.
“As consumers are starting to feel the pinch in prices, they are having to make tough decisions for their food dollar spending. We hope that this will incentivize consumers to eat at home,” Taylor said. “As discussed in our economic impact study, with inflation hitting the highest levels seen in the last four decades, the vast majority of Americans are citing groceries as their top concern. Families across Alabama are looking for ways to navigate rising prices that can cut into their pocketbooks.”
Taylor said food costs from sit-down and fast-food restaurants are projected to rise 6-7 percent, but Alabama’s grocery industry offers a cost-effective alternative that saves hard-working families money. While restaurant customers are limited to menu items, she said grocery shoppers have a variety of ways to save money, such as buying in bulk, purchasing generic brands and switching from meat to plant-based alternatives.
Working for members
Taylor said the AGA takes pride in listening to the needs of its members. Each year at its annual convention, the association offers educational sessions that “are on the pulse of the needs of our industry.”
In 2022, AGA highlighted the labor shortage, logistics and the supply chain, cybersecurity, cryptocurrency and best practices for the grocery industry.
This year’s convention is set for July 9-12 at the Sandestin Beach Resort in Destin, Florida. “This event cultivates community within the grocery industry through networking experiences, educational seminars and showcasing at our exhibit hall while enjoying entertainment at a top-notch venue,” Taylor said.
The AGA also has developed programs to help its members, such as the Association Health & Wellness Trust, which provides affordable health care costs to members. It also has worked with the Alabama Community College System to develop a program for meat cutters throughout the state. The pilot for this program will roll out soon, Taylor said.
Also, through its Alabama Grocers Education Foundation, the AGA offers scholarships and tuition reimbursement to help alleviate the rising cost of education. To date, the foundation has awarded more than $1.4 million in scholarships.
