Economists familiar with New Mexico report that rising inflation, particularly in essential food categories, continues to place a considerable strain on household budgets, making price sensitivity a key consumer driver in the state.
For some time, significant portions of the state, particularly rural areas, have lacked easy access to affordable and healthy food options. This food desert phenomenon, economists note, limits consumer choice and drives higher prices for essential goods.
Statistics tracking the cost of food in New Mexico would seem to support this assertion. New Mexico ranks sixth in the nation for having the highest weekly average grocery bill, $286 per household, making it about $15 more than in neighboring states. Studies show Hispanic and Latino consumers are among those spending the most – in part because they tend to shop in smaller stores where prices often can be higher.
New Mexico’s high poverty rate continues to impact consumer spending, forcing many households to prioritize essential needs over discretionary spending on groceries. Experts note this has created a greater reliance on lower-cost, less nutritious food options for its more than 2.1 million residents.
Calling the grocery business “a steady but slowly declining industry in the state,” New Mexico Grocers Association Executive Director Henry Sandoval said most retail growth is coming from the convenience channel.
“While we haven’t seen much change in grocery store count in quite a while, we are seeing the number of c-stores grow and gain market share. New c-store chains are starting to invest in New Mexico,” he said.
Among the key issues impacting members of the Albuquerque-based association, Sandoval cited supply chain challenges, cost of goods and pressure from e-commerce retailers. As for consumer concerns, he noted that inflation is a major problem, particularly SNAP benefit customers.
“Those independent grocers who are doing well are focusing on providing the best customer service on every visit,” Sandoval said. “Many of our independents go out of their way to take care of the neighborhoods they operate in and that means a lot to the people here.”
Gov. Michelle Lujan Grisham has been a staunch supporter of legislation curbing organized retail crime in her state. During a speech at the New Mexico Organized Retail Crime Association’s annual conference in September, she shared that she had personally witnessed retail crime over the past two years.
Grisham said she hopes that House Bill 234 will help stir change and punish those who steal. The legislation empowers prosecutors to aggregate the retail value of merchandise stolen across multiple shoplifting incidents. If the combined value exceeds $20,000, prosecutors can charge the suspect with a more severe second-degree felony.
A complex and challenging retail environment is requiring New Mexico grocers to adapt their strategies to meet the diverse needs and budgets of their customers or risk going out of business.
[RELATED: Led by Lone Star State, Southwestern U.S. Ripe For Grocers]
In the past year or so, Albuquerque has seen its fair share of transition, with several key retailers leaving the area and a few new ones entering.
After Walmart, Walgreens and Family Dollar closed, the lone remaining food store in the International District – Sais Food Mart – was shuttered following a fire.
Local resident Hussein Nimer has set out to change the neighborhood’s status as a food desert, recently opening 505 Supermarket. Having grown up in the area, Nimer was aware of the challenges operating a store in this part of the city entails.
“We are glad to play a role in breathing some life back into the community,” he said. “We want to make this a store locals want to shop and are working with our customers to make sure we carry the items they want find the shelves.”
Last summer, it was announced that Albuquerque’s South Broadway neighborhood also would be getting a new grocery store. The community lost its previous food store, Sol Supermarket, a year ago.
For this district, in which many residents lack transportation, store closures have made access to fresh, affordable food a challenge. The Bermudez family bought the site in June and announced plans to rebuild the venue and open El Mezquite Market.
Add Comment