Last updated on August 16th, 2012 at 12:08 pm[gn_note color=”#ff3333″] The 2011 Arkansas Profile originally ran in the August 2011 edition of The Shelby Report of the Southwest. 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
Edwards Food Giant, based in Harrisburg, has been in business for 51 years. The chain has come to be known as “The Meat People,” Paul Rowton, VP, GES Inc., Edwards Food Giant, told The Shelby Report. It’s a label the company’s customers bestowed on it.
“Meat has been our strength. That’s been very important to us as we grow and entered the Little Rock market in 2009,” he said. The company opened two stores that year, one in June and the second in October. In September 2010, a third Little Rock location opened.
Edwards Food Giant also has locations in Forest City (the first store for the grocer), Marianna and Harrisburg, and recently signed a lease for a location in Bryant where a grocery store previously occupied the space.
A growing population drew Edwards Food Giant to Little Rock, Rowton said.
“The areas that we’ve been in, the population has been declining for a number of years,” he said. “So it’s exciting for us to be in Little Rock, and the Little Rock community has been very receptive to us.”
The company has been built on old-fashioned service.
“We still carry out bags,” Rowton said. “I tell our employees all the time: ‘Anybody can sell a can of corn. It takes somebody going the extra mile in the service areas … and trying to provide the customer with the best shopping experience.”
Rowton also keeps the employees focused on the customer they are serving.
“Customers these days are busy. They don’t have an hour and a half to go grocery shop,” Rowton said. “They’re in and out and they need to get the items they want.”
Edwards Food Giant Stores has expanded its “heat n’ eat” and prepared food items. Popular items include spaghetti and chicken. Several of the stores have a smoker onsite, where the grocer prepares ham, turkey, pork tenderloin, ribs and Boston butt.
“They’re in a case and they just come in and pick them up and take them home,” he said. “We’re seeing (growth) in both the cold and the heated prepared foods, so we’re actually remodeling some of the stores to incorporate more of that into our deli/bakery.”
That really appeals to mothers with hectic schedules.
“A lot of times, the mother may have been working all day and then at soccer practice for an hour, and she still plans on putting a meal on the table, so prepared foods are a big item for us,” Rowton said.
While the prepared meals category has been a “tremendously fast-growing area” for Edwards Food Giant, produce is taking center stage, he said, especially locally-grown produce.
“There’s a big demand for something that’s grown locally,” he said. “For instance, in Arkansas, it’s Arkansas tomatoes that are a big item for us. When the season comes in, that’s a big item for our stores, just trying to provide what the customer wants.”
The produce departments in Edwards Food Giant stores are growing in variety and size.
“Customers want it fresh. They want it colorful and they want it accessible,” Rowton said. “That’s maybe an area we may not have been as good at in the past as we are trying to be today, and that has to do with the focus on health for a lot of consumers—a lot of customers who, in my opinion, decide where to shop based on the perishables departments, and more specifically the produce department and the variety you carry, how fresh it is.”
Locally grown produce is important to consumers, to retailers and to the state’s economy. In many ways, the state’s agricultural base has helped blunt the impact of the recession.
The University of Arkansas Division of Agriculture released a report early this year that showed that the state’s economy actually expanded during the national economic recession because many Arkansas companies specialize in food production. Agriculture accounts for more than one in six jobs in Arkansas, and provides more than 15 percent of the state’s labor income.
Other important economic sectors are tourism and outdoor activities like hunting and fishing. Approximately 100,000 people hunt waterfowl annually in the state, ranking Arkansas second in the nation for participation. Edwards Food Giant knows how to capitalize on that, too. Edwards Food Giant’s Harrisburg store is unique in the company because in addition to being a traditional supermarket, it also has a dine-in restaurant, a full-service bank and pharmacy, a True Value Hardware store—and a full-line sporting goods store, where guns and ammo are available for purchase.
“Duck hunting is a huge part of the economy in northeast Arkansas,” Rowton said. “We have a lot of people who come in and duck hunt in northeast Arkansas, so we’ve just kind of built that niche.”
The season usually begins on the Saturday before Thanksgiving, so a lot of families go ahead and celebrate Thanksgiving on that Saturday, Rowton said.
“So that Friday, you‘ve got 600 or 700 duck hunters coming in to get ready to duck hunt the next day, and you’ve got people buying traditional turkey dinner items,” he said. “So it’s a lot of fun in that store.”
Grocery tax cut again, but gas prices impacting economy
On July 1, the latest cut to the sales tax tacked onto grocery bills went into effect in Arkansas. Gov. Mike Beebe won re-election last year on a pledge to continue cutting the grocery tax. The latest cut reduced the tax from 2 percent to 1.5 percent. When Beebe first took office in 2006, the tax on groceries was 6 percent.
“It’s going to mean another half cent off their basic needs of life,” Beebe said about the reduction. “We’ve gone now from six to one and a half, and we’re not through. You’ve got to do it as you can afford to do it. I would have liked to done more than half.”
In 2010, Arkansas’ per capita personal income (PCPI) had the 10th biggest gain among the 50 states and the District of Columbia, according to the U.S. Bureau of Economic Analysis. But though it rose 3.5 percent to $33,150, Arkansas actually fell in the rankings, to No. 46 in the nation. It ranked 44th a year ago. Arkansas’ PCPI is 82 percent of the national average, which was $40,584 in 2010.
The total tally for the state’s personal income was $96.6 billion, up from $93.3 billion in 2009. In 2008, PCPI in Arkansas totaled $93.4 billion.
The state brought in more money than it expected it would in 2010. Its net available general revenues total more than $4.57 billion, which is 5.8 percent more than last year and 2.1 percent more than was forecast. The bump was mainly due to individual and corporate taxes bringing in more than was expected.
That, the state said in a press release, “reflected a recovering economy during tax year 2010 as reported on tax filings in 2011.”
Gross receipts taxes also grew, but below predictions, due mostly, according to the state’s department of finance and administration, to “increased fuel prices (that) impacted taxpayer spending.”
Arkansas had mixed economic indicators in May, the latest figures available at press time. High gas prices skewed some numbers, as did government programs that have expired.
Arkansas’ unemployment rate increased one-tenth of a percentage point to 7.8 percent in May, and that is exactly where it was a year ago. The state’s jobless rate had been 4.8 percent to 5.5 percent or less from January 2006 to September 2008. Since then, it has steadily climbed from 5.8 percent in October 2008 to a peak 8.0 percent in January and February 2010, where it has since hovered.
Home sales in the state were down 20 percent in May vs. the same month last year, reports the Arkansas Realtors Association. That figure is somewhat off because last year there was a homebuyers tax credit that helped sales.
“It is challenging to not only compete with a time period when home buyers were being encouraged to purchase using the tax credit, but it is my belief that, like much of the country, the Arkansas housing market struggled in May due to rising gasoline prices along with the continuing impact of April’s severe weather,” said Amy Glover Bryant, communication director for the realtors association.
Polly Martin, president, Arkansas Grocers & Retail Merchants Association, said high fuel prices have been making a tough time even more difficult.
“It’s a tough time for a lot of working families,” Martin told The Shelby Report. “Fuel prices seem to be coming back down now, but when they started to trend up we had a lot of our customers tell us, ‘Look, it’s not a luxury. We have to put fuel in our vehicles; we’re not taking vacation … we’re just trying to get back and forth to work, get the kids to school.’
“That’s had an impact on the money that was available to spend,” Martin said. “I would tell you, though, that we’re fortunate here in Arkansas. When you look at us compared to other states across the country, as far as our outlook, first of all, I don’t think we had as far to fall.”
Arkansas has benefited economically from “fracking” technology that can reach and extract natural gas from deep in the ground. The Fayetteville Shale stretches across Arkansas from approximately Fort Smith east to well beyond Little Rock and to the state’s eastern boundary. It is about 60 miles wide north to south. Extracting the natural gas from the shale has made some residents there suddenly wealthy beyond their wildest dreams.
Wells used to deposit the fluid used in the process, however, have been cited as the cause for hundreds of earthquakes in the state. After Gov. Beebe put a moratorium on those wells, the number of earthquakes rapidly declined. Extracting the natural gas will continue, but the drilling fluids may now have to be trucked out.
The boom in the central part of the state, dubbed the “sweet spot” by geologists, is bringing in workers, equipment and money. Not surprisingly, because the fracking technology first began to be put to use in 2002, the population in cities along the Shale increased from 2000-2010: Fort Smith by 7.4 percent; Jonesboro by 21.2 percent; Fayetteville, 26.8 percent and Springdale a whopping 52.4 percent. Little Rock’s population grew by 5.7 percent.
But in the southern part of the state, the Delta, several counties lost population.
Retailers bring new formats to The Natural State
The Kroger Co. opened Arkansas’ first Marketplace store at 16105B Chenal Parkway in Little Rock last Aug. 28.
The 123,000-s.f. Kroger Marketplace store carries a wide assortment of housewares, toys, school and office supplies, baby items, furniture, bed and bath merchandise, home décor and a Fred Meyer Jewelers store.
Last October, Kroger completed renovations on its 614 N. Beechwood St. store in Little Rock. The store shut down in January for the work. Once reopened, customers were greeted by an expanded produce department, a large selection of prepared foods, a sushi station, salad bar, hot soup station, cheese shop, deli, bakery, and seafood and meat counters.
Other remodeling/expansion work was set for Greater Little Rock stores in the Heights, Rodney Parham and Marham.
Employee-owned, Springdale-based Harps Food Stores opened its newest location at East German Lane and Oak Street in Conway last Sept. 1. The new Harps store includes a bakery and deli, produce and meat departments and a pharmacy.
Harps’ cake decorators have won national and international awards for their work, and they can prepare cakes for all occasions. In-store butchers cut all the meat available at Harps.
In addition, its pharmacy promises to fill prescriptions in 15 minutes or less.
In October, Harps closed its Walnut Ridge store. It had served the community there since the early 1970s, but market conditions prevailed. According to its website, Harps now has 48 locations in Arkansas that operate under the Harps Food Store and Price Cutter Food Warehouse banners.
In January this year, Donald Leon Harp, who spent more than 40 years as head of Harps, died at age 83. He was the eldest son of Harps founders Harvard and Floy Harp, who started the family business in 1930 with Harps Cash Grocery in Springdale.
Harps has battled its in-state rival, Wal-Mart Stores Inc., successfully over the years and continues to do so. Last year when The Shelby Report profiled Arkansas, Kim Eskew, president and COO of Harps, explained how he saw Walmart struggling.
“Walmart is desperately trying to find a way to get same store sales up, and so they are firing a lot of shots out there,” Eskew said.
In May this year, Walmart reported its eighth consecutive quarter of declining U.S. same store sales, so the world’s largest retailer is still desperate to find a way to get same store sales up. Its home state has become something of a proving ground for new formats.
In Fayetteville the smallest Walmart in the world opened in the Garland Center on the campus of the University of Arkansas. The 3,500-s.f. store, which includes a pharmacy, opened in February.
In March, Wal-Mart Stores Inc. began construction on its first Express store, a format less than a tenth the size of an average supercenter, in Gentry, near Bentonville. It and a similar store in Prairie Grove opened on June 8. Another Express store is under construction in Gravette and expected to open Aug. 31.
Express stores carry many of the product categories in consumables and general merchandise that a regular Walmart carries. But the 15,000-s.f. stores stock only about 11,000 to 13,000 SKUs vs. about 100,000 items at a typical supercenter. They do, however, feature locally grown produce and local farmers’ picture are displayed inside.
Wal-Mart plans to open about 15 to 20 Walmart Express locations this year in rural municipalities in northwest Arkansas and North Carolina, but also in urban markets around Chicago. They reportedly cost about $1.2 million to build. Express stores have about 75 parking spaces, and just three or four checkout counters.
Walmart could build as many as 300 of these stores in one year.
Meanwhile, the Walmart Visitors Center reopened May 21. The site of founder Sam Walton’s first “5&10” in Bentonville now has on display his pickup truck, office and desk, as well as new interactive digital displays and audio and video clips featuring the company’s history.