The Wisconsin Grocers Association (WGA) is reporting a positive outlook for the state’s grocery industry, despite ongoing challenges such as workforce shortages, rising costs and increasing competition.
According to Mike Semmann, president and CEO of the WGA, the Wisconsin economy remains surprisingly stable, with the state seeing higher collection numbers and a rebound in workforce interest to near pre-pandemic levels.
While there are some clouds on the horizon, Semmann is optimistic about the industry’s prospects.
“The competition for talent in Wisconsin is still fairly robust. However, it’s not what we’ve seen over the last two or three years. We’re starting to see a comeback in breathing room in terms of attracting and retaining talent,” he said.
The grocery industry continues to be competitive, particularly in the independent sector, which remains the backbone of Wisconsin’s grocery stores. Semmann noted that there has been an increase in mergers and acquisitions this year, a trend he expects to continue.
“We’re going to be interested to see what the next six months holds, and if that’s going to help people make decisions in one way, shape or form,” he said.
Semmann pointed to the state’s competitive marketplace and the recent elimination of the personal property tax as factors that will benefit grocers.
“Wisconsin’s a pretty fiscally conservative state and has a lot of competition,” he said. “By some of the national websites that you’ve seen, depending upon the measure and the website, Wisconsin consumers are in a pretty good vantage point in that they don’t have to spend as much on groceries here on a weekly basis as they would in other states.”
Challenges ahead
While the outlook for the state’s grocery industry is positive, Semmann acknowledged that there are significant challenges. Pricing, workforce, retail crime and food safety are among the top concerns facing grocers.
“Pricing is always going to be an issue that grocers are going to be talking about,” Semmann said. “And with the elections just around the corner, we’ve seen a fair amount of attention on prices, which is having a little bit of an echo chamber effect within the stores from consumers.”
He also noted that workforce is a constant issue and will remain so for the foreseeable future.
Semmann also emphasized the importance of addressing retail crime and ensuring the safety of customers and employees. He went on to praise the grocery industry’s response to the recent listeria outbreak from some Boar’s Head deli meat, highlighting the importance of transparency and collaboration.
The outbreak was “a good example of how well the grocery industry on the retail side can be nimble when it comes to food safety and making sure the interest of the customer is put first. I think in many cases, Wisconsin grocers want to be – and are – very transparent about their stores within their own community. And while that can be a double-edged sword, I think that builds up customer loyalty in the end. “
He added that because the independent grocers in the state acted so quickly and transparently, it will benefit consumers and retailers in the short and long term.
Semmann said the WGA was on the phone daily with the Wisconsin Department of Agriculture, Trade and Consumer Protection.
“Like every other trade association around, we tried to act as swiftly as possible with factual information and connections to agency resources, industry resources and institutional resources that can help members,” he said.
Legislative victories
The WGA was “very pleased” with the 2024 state legislative session, according to Semmann.
Among the victories celebrated was the elimination of the personal property tax and updates to the state’s alcohol laws. He said removing the tax, which has been in effect “essentially since statehood,” is going to have a big impact.
“Now the corollary to that is we’re seeing municipalities try to make up for those additional funds, and they’re looking for different revenue. So we’re going to be focusing a next step on municipal assessments and seeing where that’s going.”
Eliminating the tax could have a material impact for certain stores on their bottom line.
“It’s tough to quantify numbers. I’ve seen single-store operators that could save $2,000, and I’ve seen single-store operators that could save six figures. It just depends on when you invested in those certain types of assets.”
The state’s alcohol laws went through a “generational rewrite,” Semmann noted. One change is issuing a statewide operators’ or bartenders’ license.
“That would make it, hopefully, easier for grocery store employees who are moving stores to not necessarily have to apply for a new license,” he explained.
There also was “some taxation cloudiness” when it came to ready-to-drink beverages that was cleaned up, “which will have a pretty significant impact on sales and prices of certain products.” Also, legislation was passed to take advantage of federal funds pertaining to electric vehicles. This should help retailers who want to offer charging stations.
The WGA also worked on quality-of-life issues related to workforce. Semmann said the state created a new hotline that will help with those hiring or working with “justice-involved individuals.”
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Looking ahead
As the WGA prepares for the 2025 legislative session, Semmann said members are looking forward to additional alcohol legislation, including delivery and decisions on alcohol containing certain levels of THC.
“Within Wisconsin, marijuana is not legal in any recreational or medical form. Yet we have a hemp law that allows for that 0.3 percent THC. And there are products, of course, that are available that fall under that 2018 Farm Bill, and we’re looking at some regulation of those types of products to create clarity in the marketplace,” he said.
Semmann said the association will continue to advocate for quality-of-life issues that deal with workforce, childcare, housing and “how that works into our communities. More rooftops are a good thing, and we’d like to see that expand. We’d love to have a population surge in Wisconsin. That’d be great.”
On the housing front, he said the WGA supported a bill that would allow funds for the conversion of commercial buildings into residential.
He also pointed out that planning for the next two years will be “predicated on what happens in November.”
