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2011 Rhode Island Profile: Local Marketing Goes Over Big

Rhode-Island
Even though Rhode Island is the smallest state in the union, it makes up for that with independent forward-thinkers and a progressive mentality

Last updated on August 16th, 2012 at 12:08 pm

[gn_note color=”#b1cbde”]The 2011 Rhode Island Profile originally ran in the August 2011 edition of The Shelby Report of the Northeast. 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 Ashley Bates/staff writer

Even though Rhode Island is the smallest state in the union, it makes up for that with independent forward-thinkers and a progressive mentality that is found in industries across the state, including the grocery industry.

Rhode Island—with just over a million residents—is led in numbers by the large chain supermarkets but actually dominated by independent grocers like Dave’s Marketplace, Brigido’s Marketplace, McQuade’s Marketplace and Clements Marketplace, among others.

The larger chains have followed the independents’ example over the years by offering local and organic items and catering to their customer base.

Steve Arthurs, president and CEO of the Rhode Island Food Dealers Association (RIFDA) in East Providence, said that the ­thriving stores pay attention to their demographics.

“It really seems to me that the markets that have been successful are the ones that have merchandised to the demographic and ­provide a difference (from) their competitor. In Rhode Island, a lot of the independents look at what the chains do, and they don’t necessarily compete on price but show value.

“Give people what they want, give them options, give them ­service.”

Arthurs, a native of Rhode Island, added that the state is really a unique and nice place to live.

“On most days it’s, if you can sit back and enjoy it, really quite beautiful and has a diverse cultural community, universities and is a good place to live,” he said. “You can go from one state to another in little over an hour but we also are densely populated. You can go to the beach. It offers up a lot of different things to a lot of people.

“Unfortunately right now, between the unemployment and some of the economic ­issues, it’s hard.”

Market share in the state, he said, “is kind of proportionate as it is in neighboring states in regards to bigger entities like Stop & Shop and Shaw’s, but Rhode Island independents are specific to the clientele and the shopper, and I think that is where they are uniquely different both in the most successful ones and those that market to their ­individual customer base. In Rhode Island you see a very strong independent such as Dave’s Fresh Marketplace. They are expanding their stores and they go after a ­particular demographic. Rhode Island is unique because of the clientele and the shoppers and their wants and needs. It’s more than ethnic and socio-economic; it’s the way they like to see things. I think those that have been most successful are the ones that market to the area and market to the demographics.”

The dominant chain store is in Rhode Island is Stop & Shop with “25 stores, maybe 26, and they’ve added stores in the last few years that are very successful,” according to Arthurs.

Shaw’s now has 10 stores in the market but closed five stores in February. Two were in Rhode Island, in Johnston and Warwick; the other three were located in Massachusetts. Shaw’s, which is owned by Minneapolis-based Supervalu, still has 10 stores in Rhode Island, the Providence Journal reports.

The Rhode Island-owned and-operated Dave’s Fresh Marketplace that Arthurs praised operates nine stores.

“They’ve been gaining market share and opening stores; they are very successful and they go after a very particular demographic,” Arthurs said. “They put their stores in the areas, they do their homework, and they do that very, very effectively. They are big in home meal ­replacement and things of that sort; they have differentiated themselves that way from the bigger chains.”

Other independents are Clements’ Marketplace (in Portsmouth), McQuades Marketplace has three stores and Brigido’s also has three stores.

“The independent base is stronger than what it is in other states that are dominated by chains,” he said.

‘Uneventful’ legislative session completed

This year the legislative session was fairly uneventful in terms of the grocery industry, but Arthurs said there are still several issues affecting the industry.

“The session just finished two weeks ago with the passage of the budget. The legislature is going to convene for a special session that will deal only with the pension issue,” Arthurs said. “So the pension issue does override every other issue because bottom line is, the legislature and the government is looking for more revenue. Unemployment is still high, I think we are at currently at 10.9—it was over 11 for the last couple of years…What we looked at this year were those measures that would ­either tax additional products and/or raise revenues and fees.”

The measures looked at during this year’s legislative session included a beverage tax, interchange fees and landfill fees, among others.

“The beverage tax was very prevalent for us … we spent most of the session dealing with that. There were two bills—one in the House and one in the Senate; there were hearings, news in the media. We lobbied.”

The bill would have added a 1-cent tax increase on soft drinks and juice drinks with sugar, corn syrup or other “high calorie sweeteners,” the Providence Journal reported.

“It’s just another added tax, under the guise that it’s health education or education against diabetes,” Arthurs said. “It’s a good diet, exercise and a healthy lifestyle that controls diabetes.”

The proposal came from companion House and Senate bills sponsored by Rep. Edith H. Ajello (D-Providence), and Sen. Rhoda E. Perry (D-Providence). The bills say the money raised by the tax, to be paid by distributors, manufacturers and wholesalers, would go to the Department of Health for “public health efforts and programs focused on the goal of eradicating obesity,” according to the report.

“There was an amendment submitted (to lower fees) but it did not come to fruition. The realities of what the Fed has come out with are higher fees than what was intended,” Arthurs said. “Legislation at the state level would have put state controls (on the fees), and that will come back next year and that is something that we will support.

“Vermont is the only state that has actually passed legislation; the Rhode Island bill was similar to that. The state will look at it again next year because the preliminary ruling is that the fees are twice that of what was originally proposed. It is a step in the right direction.”

All in all, Arthurs was happy with the session but is still uncertain about the state’s stale economy.

“The economy is very slowly improving … Usually when an economy or a local ­economy turns around, it starts with the smaller businesses and startups,” he noted.

Employers that have adjusted their payrolls down during the recession “are very slow to adjust back up and I think that is what you are seeing,” he said. “In Rhode Island, we are trying to ­support legislation and programs that will help the smaller ­business owner, because they are the ones that provide incremental jobs …The consumer spending (decrease) is a direct result of the unemployment. The economy has improved but it’s still pretty bad; a lot of people are still very conservative with their purchases and very cost-conscious.”

Unfortunately, Rhode Island has some of the highest fuel costs in the country, which is hurting residents, but Arthurs said tourism seems to be on the rise.

All and all, “it’s very slow and (has) a very long way to go,” he said.

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