Louisiana and Mississippi Show Signs of Recovery, But Economy Remains Soft
by Kristen Cloud/staff writer
Both Louisiana and Mississippi are seemingly on the mend. Following the devastating effects of Hurricane Katrina in 2005, coupled with the recession and the BP oil spill, the Gulf Coast states are finally seeing some real signs of recovery on the economic and development fronts.
“The Louisiana economy is holding steady,” Jessica Elliott of the Louisiana Retailers Association (LRA) tells The Shelby Report. “The unemployment (rate) is 7.2 percent and has a track record of steady economic performance throughout the difficult period of the last few years.”
Jay Campbell, president and CEO of Associated Grocers of Baton Rouge, notes that Louisiana’s petrochemical base has allowed it to fare somewhat better than its neighbor Mississippi, where unemployment sits at 8.7 percent—a bit above the national rate of 8.2 percent.
“…The petroleum and natural gas is doing fairly well with exploration but so are the chemical companies that are coming back because of the low cost of natural gas,” Campbell said of the Louisiana market. “There has been a lot of redevelopment in the chemical business, and Louisiana’s economy was built on petrochemicals.”
In addition, tourism—hampered greatly by both Katrina and the oil spill—is rebounding, with both states continuing marketing efforts targeted at potential visitors.
Baton Rouge, for instance, officially changed in May the name of the Baton Rouge Area Convention and Visitors Bureau to “Visit Baton Rouge.”
“It’s a lot easier when we are answering the phones, and it’s a lot more direct impact on what we are trying to do,” says Paul Arrigo, CEO of Visit Baton Rouge. “And it tells more what we do—Visit Baton Rouge, the official source of travel and information.”
The Gulf Coast tourism campaigns are exceeding expectations, too.
Hotel occupancy in New Orleans jumped 3 percent and average room rates shot up 13 percent just in the first quarter of this year, according to Reuters.
Not out of the woods yet
Despite promising signs, the Gulf Coast economy is still “soft,” according to Campbell.
This is especially true as it relates to grocers and retailers.
It’s “an economy that you have to be very competitive on your pricing and special promotions because the consumer is still watching their budget,” he says. “I would think that the lowering of gas prices has been favorable, but they are still quite high from a comparative standpoint.”
To offset the high price being paid for gas and other items, consumers are trading down to AG of Baton Rouge’s private label, Shurfine, as well as its value label, ValuTime, according to Campbell.
Challenging times, Campbell says, gives his organization even more reason to help its independent grocer members.
“We try to do everything within our power to assist them in being successful on the retail level…It’s not about making our company successful, because we, in our view, aren’t successful unless our customers are successful,” he says. “It’s not about just garnering volume as a wholesaler; if it was just about garnering volume for the wholesale business, to keep the wholesale business alive, we could do that tomorrow. We could go out and seek volume from any and all sources. So our focus is not about keeping Associated Grocers in business—it’s about keeping the retailers in business, which we believe keeps us in business and gives us purpose for existing. It’s more of a mindset of being targeted on the success of the retailer, not on the success of the wholesale entity.”
Pete Mercier, Save-A-Lot’s license development manager based in Madison, Miss., agrees. He tells The Shelby Report that the economy in both Louisiana and Mississippi continues to struggle, even though it has improved in recent months.
“People are looking for work and are moving out of some of the smaller towns, trying to make ends meet,” he says. “Gas prices, although they are starting to fall, some have been very high and impacted the working people of Louisiana and Mississippi in a large way.”
Save-A-Lot’s hard-discount format, he adds, is “well accepted in Mississippi and is starting to gain the same reputation in Louisiana…making a big difference during hard economic times.”
Save-A-Lot, a Supervalu banner, currently has 23 stores in Louisiana and 24 in Mississippi, all of which are supported by the company’s Hammond, La., distribution center.
But those numbers should get larger. Save-A-Lot officials reveal Louisiana and Mississippi are key states for future store development.
“We are aggressively looking for locations in the Louisiana and Mississippi markets,” Mercier says. “Both states are strong for Save-A-Lot growth potential. They each have areas that may be over-stored and areas that are under-serviced. We can definitely fit into both markets.”
New Orleans recently launched the Fresh Food Retailer Initiative (FFRI) program in order to increase access to fresh foods in traditionally underserved neighborhoods.
“The program will provide direct financial assistance to retail businesses by awarding forgivable and/or low-interest loans to supermarkets, grocery stores and other fresh food retailers,” LRA’s Elliott says.
The program’s goal also is to provide quality employment opportunities, serving as a catalyst for neighborhood revitalization.
“The food desert program is another avenue to ensure savings and nutritional foods are being offered to as much of the population as possible,” Mercier says. “We are exploring these areas and are surely interested in going where the population base can support the program.”
Market sees uptick in new store openings
While there is still room for economic improvement, both Louisiana and Mississippi have seen some recent new store growth.
For example, Ford’s Food Center, with locations in Jonesville, Colfax and Wisner, opened a fifth store at 7255 Prairie Rd. in south Winnsboro last year in an area of the city designated a food desert. Quinon Ford was able to open the 19,500-s.f. store with a Business and Industry Guaranteed Loan from USDA Rural Development. According to the USDA, the $5 million loan allowed Ford to refinance debt on existing facilities owned by Ford Holdings LLC and, in addition to constructing the store, assisted in purchasing machinery, equipment, inventory and other items associated with the project. Additionally, Ford and his operating entities maintain a supply relationship and “Cooperative Purchase Rebate Program” with Associated Wholesale Grocers (AWG), one of the largest wholesale grocery distributors in the U.S. AWG, in fact, has recognized Ford’s stores as one of the leading AWG Brands merchandisers nationally for stores comparable in size;
AWG plans to open its seventh full-line grocery distribution center in January. The 720,000-s.f. facility in Pearl River, La., will carry dry grocery, frozen food, ice cream, dairy, fluid milk, meat, fresh seafood, produce, floral, bakery, deli and supplies. AWG broke ground at the 68-acre site last year.
Market Basket is operating four new locations in west central Louisiana after recently acquiring stores in Many, Zwolle, Mansfield and Toledo Town from Big Star Supermarkets. The new locations bring Market Basket’s two-state footprint to 35 stores.
“The addition of the Big Star stores and associates to our family was a natural fit, and we were pleased to retain most of the former Big Star associates,” Skylar Thompson, company president, tells the Beaumont Enterprise; Albertsons LLC opened a 57,500-s.f. store in Denham Springs, La., on May 4 in the former Winn-Dixie location at 402 South Range Ave. It’s the Boise, Idaho-based company’s second new Louisiana store since Albertsons LLC was formed in 2006 and brings 140 new jobs to Livingston Parish.
The store offers a full-service butcher block, fresh Gulf seafood shipped in three times a week, custom cakes, specialty cheeses and made-to-order party trays.
“We also have an in-store sushi chef making fresh sushi every day and a new hot wing bar that we’re sure our local sports fans will love,” says Wayne Denningham, president of the Southern Division of Albertsons LLC.
In addition, the new Albertsons Market includes a floral department and a pharmacy.
Store Director Mike Leggett says, “The Denham Springs store also has a fantastic selection of Louisiana staples. We’re sourcing some produce from Guidry’s Produce, as well as offering Zapp’s Snacks, Cousin’s Salad Dressings and Manda’s Fine Meats. And we couldn’t open an Albertsons location in Louisiana without offering Community Coffee, Blue Runner Beans, Chef John Folse Entrees and Tony Chachere’s Famous Creole Cuisine.”
Denningham adds that, in the coming months, the company’s Baton Rouge stores will undergo remodeling;
• The Fresh Market plans to open a new store in New Orleans on July 25. Located at the site of a former funeral home and Border’s bookstore on Louisiana and St. Charles Avenue, the store looks to hire about 90 people;
• Also coming to New Orleans is a Winn-Dixie. The Jacksonville, Fla.-based BI-LO Holdings-owned banner will anchor a new shopping complex at South Carrollton Avenue and St. Louis Street in Mid-City that is expected to open in early 2013. The lot—site of the former Bohn car dealership—has sat vacant since Hurricane Katrina, according to bestofneworleans.com.
The shopping center is expected to provide 365 jobs and will include Office Depot, Neighborhood Pet Market by Jefferson Feed, Felipe’s Taqueria, Five Guys Burgers and Fries, Pei Wei Asian Diner and the frozen yogurt chain Pinkberry. As of late March, 80 percent of the shopping center’s retail space had been leased.
The new shopping center is expected to boost the local economy—particularly since it will be connected to the Lafitte Corridor, a 3.1-mile greenway that will eventually run through Mid-City to the French Quarter. In December, the city agreed to let Winn-Dixie build a one-way car crossing on St. Louis Street connecting the main parking lot with a smaller satellite lot, which will cut across the greenway, bestofneworleans.com reports Food Depot opened in south Jackson earlier this year at the space once occupied by Brookshire’s, which left the market in January 2010, wlbt.com reports. The 55,000-s.f. store is the 14th for Kosciusko, Miss.-based Food Depot; and wlox.com reports that a new grocery store and shopping center is coming to Waveland, though the developer who recently purchased the 13-acre commercial property once known as “Our Shopping Center” has not said which tenants will occupy the shopping center.
In a separate development project in Waveland, Save-A-Lot will open in the old Home Depot building off Highway 90.
“Save-A-Lot opened four new locations in Mississippi over the past 12 months (including one in Saltillo on April 24),” Mercier tells The Shelby Report. “The company has plans to open a second location in Jackson and a new store in Waveland later this year.
“Save-A-Lot has a new corporate store under construction in Bayou Vista, La.,” adds Mercier, who also mentioned the possibility of selling a few corporate locations to independent retailers in Louisiana, as the company believes the stores would be in better hands with a licensee.
“The expectation is that the retailer continues to operate the store as a Save-A-Lot and have the ability to develop additional new Save-A-Lot stores,” he says.
Waveland had several grocery stores prior to Katrina but, following the hurricane, Walmart Supercenter was all that remained. The spurt in Waveland development, including the soon-to-open, 30,000-s.f. Claiborne Hill Supermarket in the hurricane-damaged Save-A-Center building on Highway 90, has led to cautious optimism concerning the city and state economies.
Rouses’ urban farm adds more innovation to new downtown New Orleans store
After helping to revitalize downtown New Orleans with its new cutting-edge store that opened late last year at the corner of Barrone and Girod, Rouses continues to bring new innovations to its two-state footprint.
The Thibodaux-based company with more than three dozen stores across Louisiana and Mississippi unveiled at the downtown New Orleans store its own aeroponic urban farm on its rooftop—known as “Roots on the Rooftop.” It is the first grocer in the country to develop its own urban farm.
“The flat rooftop on this store is perfect for urban farming,” Donny Rouse, managing partner, says. “And the view of downtown is postcard perfect. I imagine we will do a lot of dinners up here on the farm.”
Rouses’ downtown store sits just blocks from the Superdome, French Quarter and Mississippi River.
The vertical aeroponic Tower Garden uses water rather than soil, and allows one to grow up instead of out. It was developed by a former Disney greenhouse manager, and is used at Disney, the Chicago O’Hare Airport Eco-Farm and on the Manhattan rooftop of Bell Book & Candle restaurant.
“This is very cutting edge for urban farming,” says Rouse.
Chef Louis “Jack” Treuting, Rouses culinary director, first saw Roots on the Rooftop as a way to provide fresh herbs for the food Rouses chefs prepare, but quickly saw potential to expand the program to include retail.
“I knew if our chefs wanted it, so would our customers,” he says.
Treuting worked with New Orleans-based A.M.P.S. (Aquaponic Modular Production Systems) on the Rouses system.
“Aeroponics makes sense for the space,” says Treuting. “It is lighter than soil-based operations, and the towers recycle water and liquid nutrients through their own reservoirs, so they’re sustainable.”
In other Rouses news, the grocer opened its first Mississippi store built from ground up in mid-December. Rouses had been in a 19,000-s.f. store in Diamondhead before constructing the 30,000-s.f. store, reports wlox.com.
The new store features an expanded seafood selection and expanded deli and prepared food section. It also boasts a salad bar as well as an eat-in lunch area.