Ansley Fellers, executive director of the Nebraska Grocery Industry Association, said the state’s food industry is in “an interesting position.” Although it is large, the eastern side is the most populated, with the western side being very rural.
Fellers said a recent study by the Nebraska Grocery Industry Association to gauge how many independent grocery stores were closing year over year showed the rate was a little lower in the state than the national average. She did note that the state’s grocery industry is struggling with owners who are “aging out.”
“We’re seeing a lot of stores that are up for sale,” she said, adding that the NGIA is working with the university to “make sure that those communities and the store owners know what their options are if there’s nobody there to take over the store.”
Those options include a group of investors or the community buying the store, or a young family coming in to take over. In addition to the hard work involved in operating an independent, Fellers said the overall cost of doing business in the state can be challenging.
“The increase in mandates, like wages, especially on top of other increases in costs … We just talked to someone today about how much insurance costs are going up for everyone,” she said.
With a very low unemployment rate, workforce also is a struggle for grocers.
Fellers said the association is pushing in this year’s legislative session for some relief for retailers, especially in rural areas, related to the state’s minimum wage hike. She said the increase is the biggest challenge facing independent retailers.
“Nebraska is going to be a little bit of an island here in a couple of years. We’re going to have a $15 minimum wage. That takes effect in January 2026. And then, every year after that is slated to increase by the Midwest inflation rate,” she said.
A ballot initiative also has been circulating to provide paid leave for every employee – full and part time and temporary, which begins accruing at 30 hours. Fellers said the association is monitoring that initiative to see if it will obtain the number of signatures needed to move forward.
“Anything the legislature can do to soften the blow of these mandates is really helpful, and we continue to work on that.”
A program providing grants or revolving loans for grocers targeting fresh food expansion or investments also is supported by the NGIA, although Fellers noted it is hard to get funds for such programs in the middle of a budget cycle.
“We’d like to see it funded. We think it’s a good idea, but it’s not a very big program … The cost of doing business is going up so rapidly that there isn’t enough money in grant programs like this to help people stay afloat.
“So anytime you talk about a grant or revolving loan program, we also have to talk about how to make it more affordable to do business. And we definitely support that. But also, we understand there just isn’t enough money to really go around, considering how many independents we have out there. We’re trying to work on both ends of that.”
The state is continuing to lower income taxes. Fellers said there was a good deal of property tax relief legislation passed last year.
“They used a lot of state funds to try to bring down local property taxes. It didn’t go as planned last year, so the governor is back in the capitol looking for ways of generating revenue to put state money into those local taxing authorities to bring down property taxes,” she said.
This has the grocery industry on high alert, as she noted the legislature is looking at possible taxes on candy and soda, along with increasing the tobacco tax and possible levies on games of skill that are becoming more popular in grocery and convenience stores.
“They’re not necessarily talking about eliminating the exemption overall on food and food products, but the candy and soda factor is a big one here,” Feller said. “We don’t really want to put our independent grocers in the position of having to police that.”
In other states with a candy and soda tax, the retailers have to task an employee or work with a third-party administrator to monitor labels.
“We’re going to work really hard to keep that off, but it seems to be kind of low hanging fruit right now,” Fellers said.
Inflation also is impacting independent retailers, along with higher bottom line costs.
“When you’re asking these independents to absorb a really steep jump, it’s a lot harder for them to absorb it and not pass it along … It’s eating into what is [already] a tight profit margin.”
Retail theft remains an issue for grocers. Fellers said the incidents of retail crime vary throughout the state, with the organized crime variety being more prevalent in areas along the interstates.
The association is part of the Midwest Organized Retail Crime Association, which works with police departments. Initially starting in Omaha and Lincoln, the MORCA is expanding to other areas of the state. With involvement from the Nebraska Attorney General’s office, even if there is no legislation passed to address the issue, Fellers said “hopefully we’ll have some action, and there is some interest there from our Attorney General in looking at some of these larger rings.”
Among the many resources the Nebraska Grocery Industry Association offers to its members, Fellers said she is excited about its new foundation. The goal is to become more of a partner to its retailers and help them take advantage of federal incentives for SNAP and other programs.
“We want to help put them in a position where they can take advantage of some of the programs that should really be a win-win for hungry people in their communities,” Fellers said. This would include help for stores in rural areas to establish an online presence to enable them to reach more customers.
The association also hosted its first statewide grocery industry summit in 2023. The primary focus was the resources available for independent businesses, especially grocers, such as technical assistance or seed funding for expanding food access. A second summit is scheduled for August.
The association is continuing its lobbying and advocacy efforts to lower the cost of doing business and reduce regulation. It also is working to oppose any legislation that would make it more difficult to hire students, which Fellers said has happened in some neighboring states. It offers webinars and other educational opportunities to its members.
The NGIA also partnered last year with the University of Nebraska Cooperative Development Center, and Fellers said she is hopeful they can continue that partnership this year.
“I really appreciate having them as a resource. They are there to help establish cooperatives. They also have experts that can help communities or store owners look at all different options and understand that a cooperative might not be the best idea in every situation. They’ve been really helpful.”
Fellers is optimistic on the industry outlook for Nebraska for 2024.
“We are going to work to try to ensure our state legislature doesn’t inadvertently increase the tax burden in trying to lower local property taxes. That’s a concern right now, and I just don’t think that would be good for businesses overall,” she said. “I think we definitely understand our businesses could benefit from property tax reduction, just like they would benefit from income tax reduction, but making sure that it’s actual tax relief is really tough right now.”
Read more association news from The Shelby Report.
