Gary Huddleston has a rich history in the grocery business, serving nearly 45 years as director of consumer affairs at Kroger and today continuing his service as a grocery industry consultant for the Texas Retailers Association.
TRA represents retail companies across Texas, including national, regional, state and main street grocery, mass, home improvement, pharmacy and fashion retailers. He provided The Shelby Report of the Southwest with the following insights about West Texas and the rest of the Lone Star State.
What insights on the West Texas grocery market specifically could you share?
The West Texas market revolves around the health of the oil/gas and ranching industries. Overall, the West Texas economy is strong and growing, especially in Lubbock and Amarillo. The market is competitive with large grocers like Walmart, H-E-B, Costco and United.
E-commerce continues to grow, both with curbside sales and home delivery. Amazon is a competitor in the home delivery space. Grocery distribution has become easier in West Texas; however, the market does not have some of the large distribution hubs like Houston, Dallas and San Antonio.
The fluctuation of the oil/gas market not only impacts sales but affects labor based on whether the price is going up or down.
How is the economy in Texas in general? What kind of population and employment trends are you seeing?
The economy in Texas remains strong, with more than 612,000 families moving to Texas last year. More families equate to more sales for our Texas grocers. We see this trend continuing.
Employment is a challenge for our Texas grocers, finding qualified staffing. Many individuals begin their working careers at grocery stores. The grocery industry hires many high school students and provides scholarship opportunities.
What is the general sentiment among Texas grocers regarding the newly installed president? Immigration and tariffs come to mind as two issues Texas grocers could feel impacts from maybe more than any other state.
The grocery industry has a number of regulations impacting profitability; thus, the industry is encouraged by the new administration’s comments regarding reducing business regulations.
Examples include refrigeration requirements put into place last year and food traceability rules to be implemented next year. In many stores, refrigeration costs equal the second-largest expense.
Credit card fees continue to be a big challenge; as sales increase, so do credit card fees.
It is premature to determine any impact regarding immigration and tariff policy.
How would you characterize the overall health of the grocery industry in Texas? How is the health of independents in particular?
The overall health of the grocery industry is very strong in Texas. The market is very competitive. Thus, many grocers have implemented loyalty programs tied to fuel rewards and electronic coupons.
In-store pharmacies continue to drive sales. Other additions include sushi, in-store dining, kitchen areas, casual clothing, Starbucks kiosks and juice bars.
Many grocers are focused on local products, especially produce. We have some exceptional produce suppliers in Texas and great food producers like Blue Bell.
Most grocers have embraced nutrition labeling, especially tagging gluten-free products. Grocers are utilizing social media more and discontinuing the traditional newspaper flyer.
Are you seeing growth in grocery store numbers? Areas with more growth than others or areas where store numbers are shrinking?
The number of grocery stores continues to grow. Texas has some of the best grocery operators in the country. This gives Texans many options for their shopping preference.
The growth in Texas is wide, and we do not see any areas where the number of stores is shrinking.
WinCo has plans to enter the Wichita Falls market (in North Texas, near the Oklahoma border). [Groundbreaking for the 84,000-square-foot store on Wenonah Avenue was Jan. 29, with projected completion late summer/early fall, according to local newspaper reports.]
Also, many grocers are investing heavily in remodels and replacement stores to serve customers better. The cost of a remodel has risen greatly, from an average of $750,000 five years ago to $4-8 million.
SNAP and WIC sales continue to grow about 10 percent more than last year. There are about 23,000 grocers accepting SNAP benefits and about 3,000 accepting WIC. Combined sales equal more than $700 million a month.
Grocers are investing in technology like self-check, robotics in distribution centers and AI in call centers.
What are the greatest challenges facing your association’s member grocers in 2025?
Organized retail crime is the No. 1 issue. We have a coordinated effort to prevent, apprehend and convict organized crime [perpetrators].
The Texas Retailers Association, along with the Texas Organized Crime Prevention group, meet regularly to share best practices. Gift card fraud continues to grow and is a concern.
Credit card fees – the fee banks charge the merchant every time a credit card is swiped – have increased. Our retailers even pay a credit card fee on the sales tax we collect for the state. TRA is working with the Texas legislature to develop rules to reduce these fees.
The inventory tax retailers pay at the end of the year on inventory sitting on shelves, backrooms and warehouses is another big issue. Our grocers pay inventory tax on perishable products like milk, produce and bakery that may or may not sell. They also pay an inventory tax on products like food that the state does not collect a sales tax [on].
Grocers can sell beer and wine but are excluded from selling the new ready-to-drink beverages, which are alcoholic beverages with more alcohol content than beer but less than spirits (examples include High Noon and Captain Morgan Spiced).
We are working with the state legislature and the Texas Alcoholic Beverage Commission to develop changes so grocers will be able to offer this new product.
What is the primary grocery-related legislative concerns this year? Bills the association supports and/or opposes?
TRA continues to oppose any restrictions to SNAP. We believe the SNAP customer deserves the same choice as the non-SNAP customer.
Just because a customer is using SNAP as a form of payment does not preclude them from buying the products they believe are best for their family.
TRA supports nutrition labeling and allowing customers to decide whether the product is a good choice for their families. However, if individual states require certain warnings or labels, this proves problematic for nationwide products.
TRA supports voluntary recycling of plastic bags and bottles. Any mandatory programs would add more cost to a grocer’s operation. Most grocers have receptacles to recycle plastic, and most communities have excellent plastic bottle recycling programs.
Anything you would like to add?
Our industry is exciting and feeds Texas families and supports local food banks – a great place to work. Many come for a job and stay for a career.
[RELATED: H-E-B, Other Independent Grocers Investing In Texas]