Last updated on January 27th, 2023 at 10:01 am
The 2011 Kentucky Profile originally ran in the September 2011 edition of The Shelby Report of the Southeast. 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 Katie B. Davis/staff writer
Despite it being what Kentucky Grocers Association (KGA) Executive Director Ted Mason termed a “quiet legislative session,” an ongoing battle is being taken to new heights by the grocery industry in the state.
“We’ve tried to have an initiative for several years to change the law to allow wine in grocery stores,” Mason told The Shelby Report. “We’ve taken that to a federal lawsuit now instead of continuing to bang our heads against the legislative walls.”
Of Kentucky’s 120 counties, 46 percent are completely dry, which is a far cry from the state’s Southern brethren. For example, 4 percent of Alabama’s 67 counties, 6 percent of Georgia’s 159 counties, 5 percent of Florida’s 67 counties and 10 percent of North Carolina’s 100 counties are dry.
“I guess there’s still a lot of an anti-alcohol (mentality) in the state, even though we’re a big bourbon producer,” Mason said.
It’s estimated that of the bourbon consumed worldwide, 95 percent comes from Kentucky.
“It’s hard for people to get out in a positive way and talk about the benefits of alcohol just from the heritage of Kentucky and the history of alcohol in the state, because it’s not a very popular thing to do.
“There have been legislators that have been with us and for us, but it’s a tough issue for the legislature, as any alcohol bill is,” he added.
The lack of community and legislative support led to the grocery industry taking matters into its own hands.
The Food with Wine Coalition, a nonprofit organization of grocers from across the Commonwealth that was formed to fight the wine battle, filed a complaint in January in federal court in Louisville seeking an injunction against enforcement of the statute that prohibits Kentucky grocers from obtaining a wine and spirits license.
According to current Kentucky law, which combines liquor and wine licenses while beer licenses are altogether separate, if an establishment sells more than 10 percent of staple groceries, it cannot obtain a liquor/wine license.
Coalition members believe that the current statute is unfair to Kentucky’s grocery shoppers and that it is actually unconstitutional.
“We believe the current statute to be a violation of the equal protection clauses of both the U.S. Constitution and the Kentucky Constitution,” said Franklin Jelsma in a press release. Jelsma is an attorney for Wyatt, Tarrant and Combs, the firm representing the Coalition.
According to the grocers associated with the Coalition, wine is by far the most requested item by grocery shoppers in Kentucky. Thirty-four other states currently allow grocery shoppers to select a bottle of wine while they shop for their food; this includes six of Kentucky’s seven border states. The conclusion that can be drawn from that statistic is that Kentucky is forfeiting tax revenue to its neighbors.
“Kentuckians deserve the same convenience. The current laws go all the way back to Prohibition; it is time that they are updated,” said Mason.
Changing what some consumers and grocers consider an outdated statute would generate millions of dollars of tax revenue annually for Kentucky—an estimated $83 million. Expansion of wine and spirit sales in food stores would occur only in stores where beer is already being sold. According to the Coalition, dry counties would not be impacted whatsoever by the expansion of sales.
Kentucky ‘faring’ well economically; independents competing
“It’s interesting to report that (during the fiscal year), our state was able to have a balanced budget that actually had a $192 million surplus,” Mason said.
On the jobs front, The Bluegrass State has gained about a third of the jobs lost from the recession, adding about 1,500 a month.
The unemployment rates have gone from a high of over 11 percent to, as of June, 9.6 percent, according to the Bureau of Labor Statistics.
“I think the broad spectrum is that we have fared a little better than some of our surrounding states and many other states across the country economically through the recession,” Mason said. “If you cascade that down to the food retailing industry … the independent grocers have hung in there. They’ve figured out how to compete against the big-box stores and the chains that are doing well.
“I haven’t heard a whole lot of complaints about the business from folks, so they seem to be doing pretty well,” he added.
Doing well, or simply getting help from friends instead of associations?
According to a May article on the Kentucky news website Kentucky.com, residents of Wilmore worked tirelessly at the start of spring to save the town’s lone grocer: Fitch’s IGA on Main Street.
It had operated in the town for 55 years, and volunteers took time in early April to put a fresh coat of paint on the walls inside and out in an effort to draw more customers so owner Leonard Fitch wouldn’t have to close his doors.
According to the article, “Fitch’s father bought the IGA in 1956, and Fitch and his brother took over in 1990. He said it has been tough running the store since his brother had a stroke two years ago.
“In these difficult economic times,” Fitch told the news site, “sales are lower and expenses higher than they ever have been.”
Thanks, however, to donations from the townspeople, an interior designer volunteering her time to help fix up the store, a new emphasis on daily deals and improved signs, Fitch’s store saw increased sales in late April and early May—the first sales increase the store has experienced in more than a year.
From here on out, there will be one more thing different about Fitch’s IGA on Main Street in Wilmore: There will be more locally grown fresh produce and products made in Kentucky on the shelves, the owner told Kentucky.com.
“I’ve seen some pretty innovative folks that are doing a lot and really tying themselves to the local produce and locally produced food of Kentucky,” said Mason. “They’ve really done a good job of bringing in those locally produced products when they can. We’ve even got folks that run pictures of the actual farmers that produce the products that they’re selling.”
According to Mason, independents like Fitch’s are surviving, and in some instances thriving, because of an old baseball adage: “They’re hitting them where (the big-box retailers) ain’t.
“Our independents are finding those little things that they can do differently and react quickly to and finding new ways to serve that customer base. Retailers big and small have learned lessons in this economy about what it takes to survive. They know they’ve got to serve their customers with fair pricing, great service and homegrown items now more than ever.”
Revitalization giving new life to Louisville
In downtown Louisville, revitalization is the name of the game, and that includes grocery stores.
In November, in the city’s Park DuValle neighborhood, ground was broken on a 20,000-s.f. grocery store.
First Choice Market, a full-service grocery store located at 3030 Wilson Ave., is the first grocer in Park DuValle and will serve an estimated 35,000 citizens of the immediate area and surrounding neighborhoods.
First Choice Market is the first phase of a retail center called Wilson Crossing and will feature a wide selection of fresh fruits and vegetables and offer shoppers a deli counter and bakery to complement an extensive line of grocery items.
The store will be managed by local independent grocery operator ValuMarket, which has five other stores in the Louisville area, and bring approximately 30 jobs once it opens in November.
“There have been some small grocery stores trying to figure out how to get into the urban areas of Louisville and Lexington,” said Mason. “There’s been some things moving back into those downtown areas … Laurel Grocery has been working with folks to provide groceries to the underserved urban areas.
“I’m always optimistic that wherever there is a need for food that there’s going to be either the chains or the independents right there trying to make the math work. I think that’s a bigger thing right now with the food deserts. There are a lot of people wanting to get into these areas, but they have to make the math work in order to open a new store.”
In April, it was confirmed that Trader Joe’s is coming to Louisville. The store will be located in the Shelbyville Road Plaza in St. Matthews.
The store will occupy about 15,000 s.f. in the former “craftsman collection” space at the west end of the center.
The store will have a separate wine shop next door to bypass the wine restrictions placed on food stores.
Trader Joe’s will open its doors in Louisville by the end of 2011.
Walmart has been busy with remodels in Kentucky the last year.
The east Louisville Walmart, located at 1915 S. Hurstbourne Pkwy., and the Madisonville Walmart, located at 1756 E. Center St. held grand reopenings in September.
The Walmarts at 10445 Dixie Hwy. in Louisville and 350 Whitesburg Plaza in Whitesburg reopened in October.
As of June, Walmart’s presence in Kentucky included 76 Supercenters, eight discount stores, seven Neighborhood Markets, nine Sam’s Clubs and two distribution centers.
According to Kentucky.com, a salad bar is coming to the Kroger on Bryan Station Road in Lexington, along with sushi and dishes.
The grocery store began its expansion in July and expects to finish it by the first quarter of 2012.
The company closed its smaller store on nearby Old Paris Road in January.
Kroger spokesman Tim McGuirk told Kentucky.com that the section under construction will house frozen foods, dairy, beer, soft drinks and a pharmacy, which will have a drive-thru. Next will come a sushi counter and an expanded Nature’s Market, with more organic and health food offerings.
The Bryan Station store will hire about 65 people once the expansion is completed.
“I’ve always felt good about the Kentucky grocery industry,” Mason told The Shelby Report. “It’s always interesting to see people looking for that opportunity and I think we’re back to where there are grocers that are looking for opportunities.
“There are some wholesalers that operate in the state that are looking for those good new operators or second-generation operators that can go into a location or spot out a new location and figure out how to make a store work.
“When retailers call me now, the first thing isn’t a complaint,” he added. “I’ve always used that as a measuring stick for how the industry is doing, how our state is doing: What do retailers want to tell me first in a conversation? The lack of complaining tells me that things are on the up and up.”
