Last updated on September 6th, 2024 at 12:00 pm
Experts tracking the supermarket industry agree that the past year has been a challenging one for Louisiana grocers. The rising cost of food and other essentials is squeezing their profit margins and consumers’ budgets.
Responding to this, Louisiana grocery stores are working hard to absorb some of these cost increases to keep prices affordable.
“Many factors have impacted the grocery business this year. The increased expenses of running a household, rising cost of utilities and insurance have impacted consumer spending,” said Pete Tortorich, VP, retail operations/merchandising and business development for Associated Grocers Inc. of Baton Rouge.
“As the overall cost of goods has increased, consumers are trading national brands for private label as they seek ways to stretch their dollars.”
In addition, Tortorich noted how the number of new restaurants – as well as those that reopened in the past year after having been closed since the COVID-19 pandemic – has taken dollars away from grocery stores. He also pointed out that online shopping continues to impact grocers’ sales volume.
“Then there’s the continuing challenge of new competition in the market, such as Aldi opening locations in the state, and the unknown future with its acquisition of the Winn-Dixie stores,” he said.
Tortorich also pointed out how dollar stores and big box home improvement retailers continue to expand their offerings of food, drinks and snacks. To compete, grocers are having to find opportunities to create excitement and keep consumers coming back. These efforts include incorporating promotional activities and special pricing.
“One-day sales, 48-hour sales, three-day sales, hot buys, meat sales and loyalty giveaways are all proving to be effective ways for grocers to bring consumers into their stores and help them save money,” he said.
Other promotional events, such as a steak night and burger night, are also drawing in customers.
“It can be difficult to compete if you don’t continue to look for new ways to attract the customer, thus it’s important that independent retailers remain forward-thinking,” Tortorich said.
Hispanic population growing
The state has seen marked increases in the number of Hispanic residents during the past two decades. With this population shift has come an expansion of Hispanic-inspired stores.
One of the more well-known Hispanic retailers, Ideal Market, has opened two Louisiana stores in 2024 – this spring in Kenner and June in Gonzales. In addition, it has announced plans to build a store in Avondale, which is considered a food desert.
Ideal Market has made its reputation by providing high-quality, authentic Hispanic food items at competitive prices. The company takes pride in its customer service, product quality and authentic flavors.
The first Ideal Market opened post-Hurricane Katrina in 2005, after the owners witnessed the influx of Hispanics during New Orleans’ rebuilding phase. Ben Castro, marketing director, said the goal was to create a full-service store where customers could find everything they need – from a way to send money home to familiar cuts of meat, produce and baked goods found in their home countries.
Today, each Ideal Market includes a pharmacy, hot food section, agua fresca bar and authentic bakery.
Stores expanding
Rouses has been making good on its expansion plans this year. In January, the Thibodaux-based retailer opened its fourth location in Lafayette. Just weeks earlier, it debuted a new location in North Baton Rouge, bringing an end to a long-recognized food desert in the capital city.
The 44,000-square-foot store employs about 200 people and features a hot food bar, serving breakfast, lunch and dinner, as well as additional bars offering hot soup and fresh salad. Other store highlights include sushi, poke bowls and a Mongolian grill with rice bowls and teriyaki; chef-inspired, fresh, ready-to-eat and -heat options; and full-service bakery, floral and seafood departments, as well as a butcher shop with USDA Prime and USDA Choice beef, and steaks, roasts and chops sliced in house.
The seafood department has an in-house boiling room, with seafood delivered from all over the Gulf Coast and around the world.
Super 1 Foods, owned by parent company Brookshire Brothers Co., unveiled its third store in Lafayette this past May. Located on Ambassador Caffery Parkway near Dulles Drive, the site once housed a Winn-Dixie and later a Shoppers Value, which closed in 2022.
The new store created 150 new jobs and features a bakery, deli specializing in hand-crafted sushi and meat department.
It also offers beer and wine, floral and produce departments. The store has a “Wall of Values” display, which features low prices on a selection of everyday items and “Super Shocker” pricing on key items.
In announcing plans to build the store, BGC Chairman and CEO Brad Brookshire said: “We have served Lafayette since 1996, and this new store serves as a testament to our company’s plans for growth and commitment to outstanding customer service. Our mission is to create and deliver exceptional shopping experiences and value to our customers, and we can’t wait to serve Lafayette with this new location.”
Over the years, BGC has strived to be an employer of choice by offering professional development and comprehensive health benefit plans along with paid time off, stock ownership, a 401(k) retirement plan, incentives, educational scholarships and an emergency relief fund.
Aldi will be opening a new store in Baton Rouge this fall, its third in the area and its 15th in the state.
In a deal that was completed in March, the German discount grocer bought some 400 Winn-Dixie and Harveys Supermarket stores owned by Southeastern Grocers Inc. and has begun the process of assimilating them across the South.
According to Aldi, the store conversion process will be conducted in phases. About 50 locations are expected to be in the thick of the transition during the latter half of this year, starting in mid-summer. The majority of these will open under the Aldi banner in 2025.
However, Aldi has said that it continues to anticipate that a “meaningful” number of Winn-Dixie and Harveys Supermarkets will retain their banners. The full conversion process is expected to take several years, according to Aldi.
Analysts note that Aldi’s focus on budget-friendly staples likely will align well with Louisiana’s price-conscious consumers.
[RELATED: Focus On Local, First-To-Market Approach Sets Rouses Apart Along Gulf Coast]
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