Maryland’s unemployment rate fell to 3.9 percent in September, its lowest point since April 2025 and below the national average of 4.2 percent. Even so, the head of the state’s retail trade group says grocers are operating under strain.
“I would describe Maryland’s grocery industry today as resilient but under tremendous pressure,” said Cailey Locklair, president of the Maryland Retailers Alliance. “The demand for groceries isn’t going anywhere, but we need to make sure Maryland remains a place where grocers of all sizes, especially independents, can afford to operate, compete and grow.”
A year ago, Locklair told The Griffin Report that tariffs, thin margins, regulatory costs and inflation could lead to more consolidation in Maryland’s grocery market. She said many of those pressures continue, with rising costs for labor, utilities, transportation, regulatory requirements and goods weighing on retailers that operate on profit margins of 1 to 2 percent.
“I wouldn’t say consolidation is inevitable, but it’s certainly a concern, particularly for independent grocers who don’t have the same purchasing power or resources as larger chains,” Locklair said.
She added that independents continue to find opportunities by knowing their customers and communities.
“They can be more flexible, offer specialty and locally sourced products, provide personalized service and respond quickly to what their customers want. Many are also serving communities where larger chains may not see the same opportunity.”
Economy steadies
Maryland’s labor force participation rate remained at 63.7 percent in September, well above the national rate of 61.8 percent. The same estimates showed the state lost 8,800 nonfarm jobs during the month.
The Maryland Department of Labor said employer-based job estimates have swung in both directions in recent months and that it believes the swings reflect data collection challenges rather than real changes in employment.
The department also noted that fewer Marylanders filed unemployment claims in September than in August, and fewer than the previous two Septembers.
Through the first eight months of the year, Maryland added 20,100 jobs, a growth rate of 0.7 percent that outpaced the national rate of 0.4 percent.
The state is still recovering from federal workforce reductions. A Comptroller’s office analysis published by Brookings found that Maryland lost 29,200 federal government jobs between January 2025-April 2026. As of the second quarter, total employment remained about 1 percent, or 26,500 jobs, below second-quarter 2025 levels.
“Maryland is particularly vulnerable to changes in the federal workforce because so many of our residents work for the federal government or businesses that rely on federal contracts,” Locklair said. “When people lose their jobs or are concerned about job security, they naturally become more cautious about spending.”
She said grocers are seeing that caution at the register.
“While everyone still needs groceries, we’re seeing consumers become increasingly price-conscious. They’re looking for discounts, choosing store brands and being more selective about what they purchase.
“It’s difficult to attribute those changes solely to federal workforce reductions, particularly with inflation and other economic pressures, but the uncertainty certainly doesn’t help.”
Gap looms over 2027 session
The state budget is expected to dominate the 2027 session, which opens in January. Lawmakers will face a projected structural budget gap of about $3 billion for fiscal 2028. Executive branch agencies have been told to prepare budget requests with reductions of about 3 percent, and two dozen cabinet-level agencies have been asked to plan for cuts of up to 10 percent. 
Locklair said that during the 2026 session, “while we were able to avoid some of the proposals that would have directly impacted retailers, the larger fiscal challenges haven’t gone away.”
“For grocers, it’s not just about one particular tax. It’s the cumulative cost of doing business in Maryland,” she said. “Between labor costs, energy, transportation, regulatory requirements and other operating expenses, those costs add up quickly in an industry that operates on extremely thin margins. Any additional taxes or fees ultimately make it harder for stores to invest, expand and keep prices competitive for consumers.”
Heading into 2027, MRA is watching for proposals that would increase business taxes, expand sales taxes or create new fees and mandates on employers. Locklair said the group also is concerned about costs being shifted to local governments, which can lead to more taxes and fees on businesses at the county level.
“There are meetings occurring looking at localities and their ability to assess delivery fees and a variety of additional taxes,” she said.
Legislative wins, unfinished business
Locklair said several proposals the grocery industry was concerned about in 2026 did not pass, including bottle deposit legislation, additional warning label requirements and a number of labor-related mandates.
“Those bills would have added costs and operational challenges for an industry already dealing with extremely tight margins, but they will return,” she said.
MRA also worked on Gov. Wes Moore’s Protection From Predatory Pricing Act, which took effect Oct. 1. The first-in-the-nation law bars large food retailers and third-party food delivery services from using certain dynamic pricing practices or consumer surveillance data to charge individual shoppers higher prices.
Consumer groups have criticized the law’s exemptions for loyalty programs, subscriptions and consent-based pricing. Locklair said the law doesn’t dramatically change how grocery stores operate “because the industry wasn’t using personal consumer data to increase prices on individual shoppers in the first place.”
She noted the original proposal was written so broadly that it could have restricted loyalty programs, digital coupons and other promotional pricing.
“I understand why consumer groups have raised questions about the exemptions, but there’s a fundamental difference between using someone’s information to charge them more and using it to offer them a discount,” she said.
Retailers also gained a cash-rounding law, passed as an emergency measure that took effect May 12. When exact change isn’t available, merchants may round either the final price or the change due on a cash transaction, but not both, to the nearest 5 cents.
“From an operational standpoint, the biggest challenge is making sure checkout systems and employees handle the rounding consistently, particularly when customers use different payment methods,” Locklair said. “We haven’t seen evidence of widespread customer problems and do not anticipate that occurring.”
“We would absolutely welcome a federal standard. Grocery chains operate across state lines, and having different rounding requirements in different states creates unnecessary complications.”
Beer and wine sales in grocery stores remain at the top of MRA’s list after the Alcoholic Beverages Modernization Act of 2026 stalled again.
“We were disappointed … particularly given the overwhelming consumer support for allowing Marylanders to purchase beer and wine while grocery shopping,” Locklair said.
She said MRA has spent the interim meeting with legislators and stakeholders to address concerns about existing license holders and the distribution system, and it will be introducing “our most thoughtful piece of legislation yet, reflective of these meetings.”
“We’re not walking away from this issue and have made an extraordinary amount of progress. We’ve built a strong coalition, and we’re going to continue pushing for meaningful legislation in 2027,” Locklair said.
“This is about convenience, new revenue and jobs, competition and bringing Maryland in line with what consumers can already do in nearly every other state.”
SNAP and retail crime
“We’ve seen some stabilization since the shutdown, but I wouldn’t say every store has fully recovered,” Locklair said of SNAP-related sales disruptions last year. “Independent grocers and smaller stores in underserved communities are especially vulnerable because they don’t have the same financial cushion as larger retailers.”
Maryland is expected to pay 15 percent of SNAP benefit costs because its federal fiscal 2025 payment error rate of 13.08 percent topped the 10 percent federal threshold. The cost-sharing requirement begins in October 2027.
“If households lose assistance or receive less each month, that means less money available for groceries and potentially fewer sales for stores already operating on extremely thin margins,” Locklair said.
“We don’t want changes to SNAP to unintentionally make existing food deserts worse,” she added.
Maryland’s organized retail crime law, which MRA worked on for a decade, has now been in effect for a year.
“It’s still relatively early to measure the full impact, and I wouldn’t say we’ve seen a dramatic reduction in theft across the board,” Locklair said. “But getting this law on the books was an important first step, and we have seen a variety of prosecutions involving the new law.”
MRA’s advocacy this year also secured additional criminal penalties related to gift card fraud. Its 2027 priorities include protections against predatory lending practices, fair reimbursement for pharmacies and stronger efforts to combat organized retail crime and protect employees.
“Ultimately, our goal is to make sure Maryland remains a place where food retailers of all sizes can afford to operate, grow and continue serving their communities,” Locklair said.