On Aug. 29, the 4.5 percent Oklahoma state sales tax on groceries was eliminated. The bill was passed in February during the state legislative session.
It is the largest tax cut in state history, according to an Aug. 26 press release from the office of Senate Pro Tem Greg Treat, R-Oklahoma City, which said the tax cut is part of a broader effort by the state legislature to address rising costs and promote economic relief across the state.
“The grocery tax cut will provide immediate relief to families struggling with the increased cost of living and inflation,” Treat said. “This legislation reflects our commitment to making life more affordable for all Oklahomans.
“The grocery tax is a regressive tax that impacts everyone every time they buy groceries. While this tax cut represents the largest tax cut in state history, it also supports the well-being of our citizens. I am proud to have supported this tax cut for many years and am proud to finally getting it across the finish line.”
U.S. Census Bureau figures indicate that the typical Oklahoman spends nearly $300 per trip to the grocery store. Sen. Dusty Deevers, R-Elgin, citing recent data, says the new law will save the average family of four in Oklahoma about $60 per month.
The tax cut, which passed with strong bipartisan support, applies to food and ingredients, to include bottled water, candy and soft drinks.
The zero rate does not apply to alcoholic beverages, dietary supplements, marijuana products, tobacco or prepared food.
Prepared food is defined as “food sold in a heated state or that is heated by the seller, two or more food ingredients mixed or combined by the seller for sale as a single item or food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins or straws,” according to the Sales Tax Institute.
Deevers noted that in addition to eliminating the grocery tax, the new law prohibits cities and counties from raising local grocery tax rates until July 1, 2025.
The law is so new that its impact on grocery shoppers isn’t clear yet. Angela McDermott, COO of Super C Mart, operating eight grocery stores across southern Oklahoma, said her company hasn’t yet seen changes related to the tax cut.
“Right now, it’s just more trying to educate the consumer, because there’s still a lot of questions as they’re coming in and they still see that small tax on the bottom of their receipt,” she said. “But we do know that, ultimately, over a year’s time, hopefully they’re going to see household savings of about $600 to $650 a year.”
State gaining population, jobs
Oklahoma WorkTrends 2024, a publication of the Oklahoma State University Center for the Future of Work in the Spears School of Business, reported that Oklahoma’s population was 4.05 million in July 2023, having grown 1.9 percent over the five-year period from 2017-22.
Between 2022-23, Oklahoma added about 50,000 residents from other U.S. states – the No. 12 highest level of domestic migration in 2023 – primarily driven by residents moving from Texas and California. This caused some racial makeup changes in the state, adding to the Hispanic, native Hawaiian/Pacific Islander and Asian populations.
It also caused the state to have “brain gain,” with new residents increasing the number of people with a bachelor’s degree or higher, according to a May presentation from the Oklahoma City Branch of the Federal Reserve Bank of Kansas City, adding that the growth was found in both cities and rural areas of the state.
“Since 2020, many non-metropolitan areas of Oklahoma and nearby states experienced net inflows of new residents for the first time in two decades,” the report said.
As of October, Oklahoma’s labor force participation rate was 60.8 percent, according to a report from the United States Congress Joint Economic Committee. The national average is 62.7 percent.
Labor force participation is the percentage of the civilian noninstitutional population age 16 years and older that is working or actively looking for work, as defined by the Bureau of Labor Statistics.
Oklahoma’s unemployment rate, according to the October report, is 3 percent versus the national rate of 3.7 percent.
A June report from the Oklahoma Department of Commerce, citing statistics from the U.S. Bureau of Labor, said the state is ninth in the U.S. for job creation. That’s based on jobs created over the past five years. Economists attribute the ranking to the state’s long-term investments in industries such as aerospace, healthcare and financial services.
The state’s low cost of living also is cited as a key factor in attracting newcomers.
Stores of all shapes, sizes opening
New food stores are popping up in the state, including a couple of formats designed to get groceries to customers in different ways.
JackBe, described as a curbside drive-thru grocer, opened its first store on North May Avenue in Edmond in January 2023. Another location, on Mustang Road in Yukon, is in the works, though the company said it does not have a timeline yet on when it will open. The initial funding for JackBe came from individual investors, investment firms and a WeFunder campaign.
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Customers order their groceries through the JackBe app and pick them up at the store, which features a covered drive-thru.
With the ability to fill as many as 200 orders an hour, the 17,000-square-foot store carries the most frequently purchased grocery products. Among the thousands of items are national and local brands, “from toothpaste to fresh hamburger and everything in between,” according to a press release.
In an emailed statement, JackBe CEO Alex Ruhter shared what he described as some “staggering” customer survey results from the past 18 months.
“We have a 4.9 star rating on Google, and a Net Promoter Score is currently 82,” he said. “It is clear that what customers want is convenience and affordability.
“Since we are a small grocery chain (right now), we have struggled to compete with brands and supply chains, but we see JackBe as a solution to the digital grocery conundrum that grocers face all over the country.”
Ruhter said the company is doing its best to optimize processes and customer experience.
“By opening JackBe, we’re introducing a new way for customers to shop that provides convenience, value and great quality with no substitutions,” he said. “We have studied customers’ needs and created a shopping experience that’s designed specifically for busy people.”
Another innovative concept is Bazar, an automated grocery store that will sell local fresh produce and other items in the Dawson neighborhood of Tulsa, an area that has been called a food desert. Ground was broken in April; recent reports say it could open in October.
Bazar members will be able to access the solar-powered store using a credit/debit card, SNAP benefit card or prepaid Bazar card. A vending system will account for inventory shifts and deduct purchases from user accounts. In addition, food trucks will be parked nearby to provide a daily meal to school children in kindergarten through 12th grade.
According to Fox 23 News, Tulsa Metropolitan Ministry received $220,000 in American Rescue Plan Act funds from the city to support the opening of Bazar.
TMM says of Bazar: “We collaborate with small farmers locally/worldwide, providing them with a highly efficient micro-retail store for communities needing food supplies. With Bazar, a multi-faith food movement, you can be confident that your support will contribute to a unique and exciting initiative with a significant global impact.”
Last October, Oklahoma grocer Crest Foods opened a new store at 2933 N. Sooner Road in Edmond, marking its 10th location in and around Oklahoma City.
Chain grocer Albertsons broke ground last November on a store in Ardmore that is expected to open before the end of this year. It is the grocer’s first Oklahoma store; it will be served by Albertsons’ North Texas distribution system, an Albertsons spokesperson told KTEN News in November.
The 50,000-square-foot store will be located at Market Street Plaza on 12th Avenue.
On May 2, Natural Grocers, the Lakewood, Colorado-based organic and natural grocery retailer, opened its relocated Oklahoma City North May store at 5903 Northwest Expressway in Warr Acres. It replaced the store at 7013 N May Ave.
“Natural Grocers has been proudly serving the state of Oklahoma since 2013 and is excited to be moving to our new location in Warr Acres,” said Raquel Isely, VP of Natural Grocers, at the time. “This was our third store in the region, and it enabled us to build a strong connection with customers.
“After almost 10 years at this location, we are ready to move into a bright, beautiful building, only a few miles away. We believe our store in Warr Acres will further our passion for supporting the health of humans and the health of our planet, with that ‘neighborhood grocery store’ feel you can depend on.”
The interior of the new store is brighter, with a more contemporary floor plan, the grocer said, adding that the new store has been upgraded with sustainability in mind, using non-toxic building materials and 100 percent LED lighting.
Natural Grocers partnered with the Regional Food Bank of Oklahoma for its “Bring Your Own Bag Program” to serve residents facing hunger. Each time a customer brings their own shopping bag, Natural Grocers will donate five cents per shopping trip to the food bank.
“Oklahoma is one of the hungriest states in the nation. Most people served by the Regional Food Bank are chronically hungry children, seniors living on limited incomes and hardworking families struggling to make ends meet,” noted the Natural Grocers press release.
It added that the Regional Food Bank distributes about 50 million pounds of food each year through 1,300-plus community organizations in 53 counties in central and western Oklahoma.
“Natural Grocers is a great long-term partner of the Regional Food Bank. The Bring Your Own Bag Program has had a tremendous impact on the fight against hunger in Oklahoma, raising nearly $90,000 over the past 13 years,” said Stacy Dykstra, the food bank’s CEO. “We are so thankful for Natural Grocers’ support and look forward to continuing to work with them to help provide meals to Oklahomans.”
Convenience store retailer Yesway announced Oct. 1 that it has expanded its operations in Oklahoma with the opening of four new Allsup’s stores. They are located at 1640 E. Main St., Davis; 416 N. Jefferson Hwy., Atoka; 101 Meadow Ridge, Elk City; and 623 S. Garfield Avenue, Kiowa.
The new large-format stores, at 6,277 square feet, operate 24 hours daily. They offer a variety of products, including Allsup’s World Famous Burritos, Yesway and Allsup’s private label snacks, fresh Allsup’s bread, milk and eggs.
Most locations also feature a beer cave, Western Union services and ATMs, to include those for cryptocurrency and digital currency.
These new locations join stores in Altus, Broken Bow, Frederick, Guymon, Madill and Thackerville.