Wisconsin’s grocery industry is holding steady, but independent grocers are closely watching labor, inflation, consumer confidence and regulatory and legislative issues, according to Mike Semmann, president and CEO of the Wisconsin Grocers Association.
“I think the economy right now is fairly stable in Wisconsin,” Semmann said. “From an industry perspective, we’re hoping to make sure that we help bolster consumer confidence so that they can feel good about going into the stores and having the experience that they want and being able to create that market basket that suits each one of their needs.”
While the state’s workforce remains strong, grocers continue to vie for employees.
“Grocers are having to compete for a lot of talent. That’s nothing new in our marketplace,” Semmann said. “We’re keeping a close eye on wage growth and consumer confidence, especially heading into Q4 and that holiday season.”
Shoppers continue to prioritize value, and tariffs are adding another layer of complexity, although the consumer impact is difficult to gauge.
“Is it having an impact on Wisconsin consumers? Yes. Are we able to quantify what that exact impact is? I don’t think we have a good idea yet,” Semmann said. “Pocketbook issues are still top of mind with consumers.
“After having just faced back to school, now they’re going to be going into the holiday shopping, so we’re going to be really keeping a close eye on what that means for Wisconsin’s grocery industry and independent grocers in particular.”
Wisconsin’s Supplemental Nutrition Assistance Program, FoodShare, has been more efficiently administered than in many other states, which Semmann said has softened the immediate effect of federal cuts.
“Anecdotally, there are a couple of grocers who are telling me that SNAP is holding steady in their stores to even having a slight increase … but they are definitely keeping a close eye on it,” he said.
Semmann said a bill has been introduced in the state to take a look at a SNAP waiver on the nutrition side. “We’re concerned about that because of the nature of how that fits in Wisconsin. Just like all of the other states that have raised this issue, Wisconsin is no different.
“It’s funny, if you take a look, root beer is bad. But a root beer float is OK in Wisconsin, because it’s got dairy. The Twix bar has always been the example there, too.”
He added that the association is working closely with its coalition partners to help make sure nothing happens when it comes to a SNAP waiver.
Independents holding steady
Despite national consolidation trends, Semmann said independent grocers remain strong in the state.
The Schnuck family, owners of Missouri-based Schnucks grocery stores, recently announced the acquisition of Wisconsin-based Skogen’s Festival Foods and Hometown Grocers Inc.
Semmann said this reflects the strength of the industry and its competitiveness.
“I think that just means that people are looking at Wisconsin as a highly competitive but potentially attractive marketplace. And from that aspect, that might mean that Wisconsin’s an OK place to do business,” he said.
[RELATED: Schnuck Family To Purchase Skogen’s Festival Foods, Hometown Grocers]
Semmann also noted that for a state of its size, Wisconsin still has a large number of independent grocers.
The consolidation trend of grocers and other small businesses, from a business perspective, is something he said needs to be discussed because it has such a direct impact on communities. “What that means is both the thought leadership and community leadership of those small business owners is going to be something that we’re going to have to replace somehow. And how do we do that? And that’s, I think, the bigger issue that I want to keep in mind.”
He emphasized the community role of grocers: “The grocery industry is so connected to their community. It’s the first place that people turn in many cases, and it’s the first place that will reach out if there is something that’s happened to a family in the community.”
Semmann added that he is hopeful that grocery stores, big or small, that have a community focus are going to continue to be successful.
“But we also think that that’s the secret sauce – if you’re a grocery store or small business or large business that has a community focus, Wisconsin residents seem to really support those types of entities,” he said.
Semmann sees early signs of growth, including calls from warehouses and other stores asking about site selection.
“While we’re in this fourth quarter, obviously we’re keeping our eyes on it,” he said, adding that heading into the next few years there could be cause for optimism for community-focused grocers.
Competition remains strong, with national chains such as Aldi expanding and Wisconsin’s convenience store sector robust. Dollar stores, while having a presence, have not dominated the market, he said
Labor challenges remain a top concern. Semmann noted that grocers are balancing wage pressures, inflation and workforce retention with the need to keep prices competitive for consumers.
“The good news is, [independent] grocers have historically been very nimble, and I think that’s to their advantage, he said. “Those store owners who are keeping a close ear to the ground and listening to their customers very intently, focusing on what they do well in their communities and trying to amplify that – that’s kind of the sweet spot.”
Managing consumer expectations for commodity pricing is also part of the equation. Semmann highlighted beef, citrus and seafood prices leading into the holidays as areas where grocers must balance cost and quality.
“We’re trying to consider how to best manage the expectations of consumers going into this holiday season and make sure that they still have the confidence to go into those independent grocers and be able to look for really high-quality products at competitive prices,” he said.
“And you know that independent grocers are going to be able to compete on service seven days a week. So those are the things that we’re trying to think about.”
Retail theft and organized retail crime, while maybe a little more regional, continue to pose challenges in the state. At the same time, regulatory issues concerning hemp-derived beverages, alcohol modernization and cottage foods remain top of mind.
“I think that you’re going to see something very soon related to hemp-derived beverages that’s going to have a pretty significant regulatory impact in the state,” Semmann said. “We feel that there should be very strong guidelines as Wisconsin grocers to help with that issue. We need it.
“We want to make sure that food safety is top of mind in the state of Wisconsin,” said Semmann, adding that the WGA is working closely with the state Department of Agriculture, Trade and Consumer Protection on these issues.
Legislatively, Wisconsin’s fiscally conservative budget policies have helped maintain stability. Modest tax cuts and increased spending on education benefit communities, while grocers continue to engage with policymakers on issues concerning the industry. Semmann also noted the open governor’s seat and active candidate landscape as important to the sector’s future.
Commitment to community
Even amid economic uncertainty, Wisconsin grocers remain deeply committed to their communities. Semmann noted that food security is “a big issue, still.”
He said Feeding America Eastern Wisconsin and other food banks in the state have seen their business grow tremendously.
The Wisconsin grocery industry and its partners, in donating to state food banks, have “fed the equivalent of every Wisconsinite for at least a couple of days this year,” Semmann said. “It’s probably closer to 30 million meals that have been donated … and that has a major impact. That gives you the size and scope of how connected we are with those food banks.”
The state’s grocers continue to step up and make sure that their communities are whole.
“That’s a story I wish we could get more attention on, because it’s such a core component of who they are. And the grocers don’t like to talk about that,” he said. “But they really are doing a great job, especially as consumers are feeling more pinched, and seniors are feeling more pinched, families are feeling more pinched.”