Last updated on August 16th, 2012 at 12:08 pm
[gn_note color=”#FFCC00″]The 2011 Ohio Profile originally ran in the June 2011 edition of The Shelby Report of the Midwest. Due to reader requests we will be posting our Profiles from each edition of The Shelby Report. The profile will be published on theshelbyreport.com one month after it has run in print.[/gn_note]by Terrie Ellerbee/associate editor
According to Dun & Bradstreet data, there are 7,951 retail grocery stores* in Ohio. They generate $5.6 billion in economic activity and sell more than $18.5 billion worth of food and beverages to Ohio consumers.
This information is included in an impact study conducted by John Dunham and Associates for the Ohio Grocers Association (OGA).
The report also shows that Ohioans rely on grocers not only for food, but jobs, too. Nearly 110,000 people are employed in the retail grocery business in Ohio, and most of them, approximately 76,600, are full-time workers. The annual payroll is more than $2.3 billion, and the average salary is approximately $24,600.
Grocery retailers also pay a lot of sales taxes into The Buckeye State—$721 million—and they pay nearly $350 million in federal taxes, the impact study states.
These are all direct impacts made by the retail grocery industry.
Retail grocers in Ohio also indirectly impact other economic activity when they buy goods and services from local or regional suppliers. Supplier companies in Ohio generate more than 13,000 full-time jobs and pay more than $610 million in wages, and, in turn, their operations create $1.75 billion in economic activity.
When the indirect impact is added in, Ohio retail grocers are directly or indirectly responsible for $1.08 billion paid in state and local taxes and $772.8 million paid in federal taxes, as well as for 126,510 (full-time equivalent) jobs in the state that generate $3.73 billion in wages.
All told, the grocery industry in Ohio is responsible for $9.78 billion in economic activity, or a little more than 2 percent of the state’s gross product.
Wal-Mart is the state’s largest private sector employer, with approximately 53,000 employees. Kroger is the largest employer with headquarters inside the state. The Kroger Co., headquartered in Cincinnati, employs approximately 36,500 people.
Ohio attracts new players
The number of grocery retailers and their impact in the state certainly will grow. Among factors attracting them to Ohio are dense populations in a number of metropolitan areas.
“Ohio is a well populated state,” Tom Jackson, president and CEO of the OGA, told The Shelby Report. “We’re the seventh-largest state in the country. We have 11 million people plus. We’ve got several major metropolitan areas. You’ve got Cleveland, Columbus, Cincinnati, to some degree Toledo in juxtaposition to Detroit. And Dayton, certainly in juxtaposition to Cincinnati.”
The latest retailers to feel the attraction of Ohio are Earth Fare and Bottom Dollar. Earth Fare is coming to Akron and Cincinnati, and a Bottom Dollar store will open in Youngstown.
Earth Fare will soon open it first Ohio store in the Akron suburb of Fairlawn, and in August will open a 27,000-s.f. store in Cross Pointe Shopping Center in Centerville, according to the Dayton Business Journal. It also reportedly is looking for a location in the Cincinnati area.
Earth Fare sells local and organic foods and doesn’t carry products containing high fructose corn syrup, trans fats, artificial colors, synthetic growth hormones or unnatural sweeteners. It is based in North Carolina and currently operates 21 stores in the Southeast.
Bottom Dollar is a subsidiary of Delhaize America, a Belgium-based corporation that operates more than 1,000 Food Lion grocery stores in the southern and Mid-Atlantic regions of the U.S. Bottom Dollar is its discount banner, and the stores carry a limited assortment of 6,500 to 8,000 items.
Jackson sees these smaller stores as growth vehicles.
“I think the smaller store does have a future,” Jackson said.
He ties the appeal of the smaller format in part to an aging baby boomer population.
“They’re starting to retire now. This older population appreciates convenience and ease, so I think that’s one thing that will help support the smaller store format,” Jackson said.
Jackson’s family ran a small, upscale grocery store in Canton. He sorted pop bottles for his dad, beginning his grocery career when he was just 10 years old. Jackson not only sees the small format coming full circle in some ways, but also sees the importance of merchandising to reach the right consumer.
“Today I think what we’re seeing is really a little bit of a change in that concept from the standpoint that now it’s organic, now it’s natural … and, of course, local,” Jackson said. “I think that they’re merchandising the local aspect better probably than we did. We probably took the local thing for granted and now they’re merchandising it and now they’re tying it into energy costs and those kind of things.
“I think things have changed from the standpoint that the gourmet shop used to be a rarity and now it’s a little more plural (because) there are a lot more people catering to that demographic,” Jackson said. “We have larger stores now that are trying really to cater to a lot of demographics across the board.”
Retailers expand, bring new formats to Ohio
Kroger continues to be the market leader in central Ohio. It is building Marketplace stores across the state, opening new Kroger banner stores and renovating stores in several metropolitan areas.
Over the past year, The Kroger Co. has announced plans to build a new $20 million, 135,000-s.f. Marketplace store in Centerville. It opened a second Marketplace store in Miami Valley last Dec. 1.
Marketplace stores sell home goods, furniture and Fred Meyer jewelry stores. The Centerville store also will have a baby department.
Kroger is building a new 56,400-s.f. store in Columbus just south of Ohio State University (OSU) to replace an older store. The new store will feature a beverage center and a selection of prepared foods, as well as a larger pharmacy.
Kroger opened a new store in Waterville last October with an expanded Nature’s Market and a Cupcake Shoppe.
Kroger has been busy renovating stores and replacing some older locations. In the Cincinnati area, the company set aside $15 million to bring improvements to stores in Westwood, Montgomery and Madeira, as well as a store in nearby Cold Spring, Ky. Work is complete at the Montgomery and Westwood stores, built in 1974 and 1997, respectively. Once the renovation was complete in Westwood, Kroger closed a nearby store that first opened in 1973.
Kroger also plans an $8 million renovation of its store at 5080 Delhi Pike in Delhi Township that will include the addition of 30,000 s.f.
Kroger has been renovating in Columbus, too, where it has more than 60 locations. The company is spending $20 million there to refresh as many as eight stores.
Kroger also opened two fuel centers in Lancaster. In addition, it purchased a closed BP station in Toledo to convert because it lacked the space to build a gas station at its 4630 Monroe St. store.
Grand Rapids, Mich.-based Meijer plans to invest $75 million to remodel 10 of its 195 stores, and two stores in central Ohio are among them. Meijer’s stores on Route 23 in Lewis Center and East Broad Street in Reynoldsburg are slated for renovation. Meijer has a dozen stores in central Ohio.
Jungle Jim’s International Market will open its second location when it transforms a closed bigg’s store in Union Township. The 211,000-s.f. store will be the Fairfield grocer’s second location, and it is expected to open in February 2012.
Giant Eagle Inc. opened its first Market District food store—a 132,000 s.f. culinary, dining and shopping destination—in the state last October in Columbus in the Kingsdale Shopping Center. Market District staffs 600 teams members, and among them are culinary school graduates, cheesemongers and other trained food professionals.
The store features an in-store chef demonstration kitchen with seating for 40, a bar-style seating area, three flat screen monitors and an enhanced sound system. It also has an Asian street food station, a rosti bar, a crepe bar, a sweet shop, handmade gelato, a smoke and fire rotisserie, artisan bread and a beverage bar, as well as fresh sushi. A cheese shop offers more than 400 artisan and imported cheeses. A bulk foods section offers 12 varieties of olive oil and vinegars, 28 varieties of tea, 48 spices and more than 60 bulk foods items.
The Kingsdale Market District also offers the Central Ohio region’s first Ohio State University Medical Center FastCare retail health clinic.
Giant Eagle also has remodeling projects planned in Akron, where it is expanding its Jackson Township and North Canton stores. Last summer Giant Eagle opened discount format Valu King stores in Pataskala and Reynoldsburg.
Marsh Supermarkets Inc. renamed its Ohio stores in February. The Former Marsh Supermarket stores now are MainStreet Market stores. The move was made to “add a much more customized approach for these stores,” said Frank Lazaran, who was Marsh chairman, CEO and president until April this year. Joseph Kelley, formerly EVP with Price Chopper Supermarkets, has replaced Lazaran.
Target Corp. added groceries to its store in Huber Heights and will open a new store in Blue Ash this October.
According to its website, Walmart’s Ohio presence now includes 127 Supercenter stores, 17 discount stores, 29 Sam’s Club stores and four distribution centers.
Recent activity includes “grand reopenings” in Macedonia last November, where it added 46,000 s.f., and last October in Hubert Heights. Last September renovation work was completed on stores in Marion, Grove City and Columbus (on Georgeville Road), and in Lorain, a new store with a full line of groceries replaced a store that originally opened in 1992.
Last fall, the Arkansas-based retailer announced plans to move from Fairlawn’s Rosemont Commons, where it had a store for 20 years, to a site off Rothrock Road in Copley Township, less than a mile away. Walmart plans a 300,000-s.f. complex in Copley Township with a Walmart Supercenter and a Sam’s Club with fuel pumps.
Ohio’s metros lose population, unemployment falls
Ohio is the 34th largest state by area, but the seventh-most populated with more than 11 million residents. The state as a whole added more than 180,000 people over the 2000-’10 period.
The official 2010 Census count shows that the five most populous incorporated places in Ohio are Columbus, with a population of 797,033; Cleveland, 396,815; Cincinnati, 296,943; Toledo, 287,208; and Akron, 199,110.
Of those five, only Columbus gained residents from 2000-‘10, with its population increasing by 10.6 percent. The others saw their populations decrease: Cleveland by 17.1 percent; Cincinnati, 10.4 percent; Toledo, 8.4 percent and Akron 8.3 percent.
In the state’s best showing since January 2009, Ohio’s unemployment rate dropped in April to 8.6 percent, down from 8.9 percent in March. It is a significant drop from the 10.4 percent rate recorded in April 2010.
In April 2009, Ohio’s jobless rate reached double digits, marking 10 percent unemployment. The rate rose as high as 10.6 percent in August 2009 and hovered there until it began to fall in March 2010.
It was April 2008 when Ohio last saw unemployment levels below 6 percent.
Meanwhile, foreclosure activity in Ohio has dropped dramatically, but for the same reason that it has decreased across the country. RealtyTrac reports that in Ohio the number of foreclosures fell 33 percent in April vs. the same period a year ago. Nationwide filings have declined 34 percent, mostly due to delayed foreclosure proceedings.
Still, RealtyTrac shows that Ohio is among the top 10 when it comes to the number of foreclosures, joining California, Florida, Arizona, Michigan, Nevada, Illinois, Texas, Georgia and Colorado. Those 10 states accounted for 70 percent of all foreclosure activity in the country during April.
* The study includes general merchandise stores like Target and Walmart and warehouse club store like Costco and BJ’s, while leaving out other retailers, like drug and convenience stores that also sell grocery items as a sideline business.
