Lisa Bednar, president of the Arizona Food Marketing Alliance, took time out of her busy legislative season to respond to questions from The Shelby Report of the West’s Lorrie Griffith about what’s happening in the state’s grocery industry.
We’re coming out of a year that saw a new administration in the White House, a government shutdown, tariffs, immigration enforcement and more. What impacts did these have on your members and the Arizona grocery industry as a whole?
Tariffs are effectively a tax on Arizona’s food supply chain, raising costs on key imports, which then show up as higher grocery prices, thinner margins for retailers and pressure on jobs in logistics and distribution.
Because Arizona’s produce supply chain is deeply integrated with Mexican growers and cross border logistics, sudden tariff hikes can rapidly disrupt volumes and pricing for retailers.
As imported items become more expensive, consumer demand often shifts toward domestic and private label alternatives that can be priced more competitively. While Arizona has seen limited interruptions to our supply chain, on-again, off-again tariffs disrupt planning, amplifying the likelihood of supply gaps as trade becomes less predictable.
Our retail partners work diligently to ensure Arizona communities have access to the products they require and have adjusted pricing strategies as quickly as possible with targeted discounts, enhanced loyalty offers and promotional pricing focused on customer needs – all of which have a heavy cost for the industry.
As always, our customers remain our top priority, and we remain committed to providing the products they rely on every time they shop with us.
What is the grocery industry outlook for 2026?
Arizona population growth remains one of the strongest in the country, which directly boosts grocery volume. Metro Phoenix saw a surge of new store openings in 2025, and we see that trend continuing this year.
We expect to see competitive intensity with new communities expanding into our fast-growing suburb areas throughout the state.
I see a focus on ready-to-eat, healthier-for-you options and multicultural offerings becoming increasingly relevant.
What are your top grocery-related legislative concerns in 2026?
Credit card swipe fees, SNAP benefit restrictions and addressing the penny shortage are our top three legislative items for 2026.
[RELATED: Grocery Development Continues Around Cities Across Arizona]
There were a number of new food stores that opened in Arizona last year, including Sprouts, Aldi, Trader Joe’s and Sacaton Market (a retail development within the Gila River Indian community), and we just finished a special project with Vallarta Supermarkets, which is opening its first store in Arizona this month. And your first Buc-ee’s is under construction in Goodyear, set to open in June. What are some of the reasons stores are growing their presence there?
Arizona’s continued population gains and new construction growth, both housing and commercial, create fresh trade areas that can support both additional full-line supermarkets and specialty stores.
Another new banner for Arizona, Seafood City, is planned for a mall in Chandler, according to a news report. A realtor in the area said in an Instagram post that ethnic markets opening in mall spaces is a trend. Do you find that to be true as well? Other examples you can share?
I can see the pull for Arizona malls to reposition empty big-box or department store spaces. These locations already have built-in traffic and parking infrastructures and can provide high visibility to a new store concept, drawing from their current customer base and bringing in new, curious customers.
Many traditional grocery stores may not carry specialty ingredients needed for specific recipes, and an ethnic store format can expose new customers to authentic prepared foods that they aren’t accustomed to.
As more and more shoppers are trying to cook more often at home, learning about new cuisines can give them more ways to vary their ingredients and try new menus while still keeping an eye on their budgets.
Are there areas of the state where stores are closing, and are food deserts a major concern in Arizona?
Arizona has not seen widespread grocery store closings recently, but food deserts remain a concern here, particularly in certain low-income neighborhoods in Phoenix and Tucson, rural areas and tribal communities. Statewide, more than 700,000 Arizonans live in census areas classified as food deserts.
What are the current population and employment numbers and trends in Arizona?
Arizona’s population is large and still growing, but at a slightly slower pace than in the last boom years. Growth remains concentrated in metro Phoenix, while Tucson and Prescott are growing at slower rates.
We have an estimated 7.6-7.8 million residents, making us roughly the 14th most populous state. Some rural counties, including Apache, Cochise and Greenlee, have seen a population decline since 2020.
Arizona’s labor market is slowing from its post-pandemic surge but is still growing overall with around 1 percent annual growth for 2024-2026. The seasonally adjusted unemployment rate has recently risen to about 4.3 percent, the highest since the immediate post-COVID period but slightly below the national average.
Health care, social assistance and construction jobs lead the way as the largest new job drivers, with Maricopa Country projected to account for about 80 percent of new jobs in the state.