Home » 2011 Maryland Profile: Diversity Keeps State on Track
Market Profile Northeast

2011 Maryland Profile: Diversity Keeps State on Track

Maryland Market Profile

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

[gn_note color=”#b1cbde”]The 2011 Maryland Profile originally ran in the November 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

 As many other states in the country continue seeing unemployment rates rise and foreclosures soar, Maryland and its 5 million residents seem to be headed toward recovery.

According to the Maryland State Archives website, the Maryland economy continues to outperform the country as a whole. Information technology, telecommunications, aerospace and defense are leading forces behind the economic growth. In the biotechnology area, Maryland is a noted leader and is at the center in the mapping of the human genome and commercial applications that result from its research.

Maryland, with an unemployment rate of 7.2 percent, continues to invest in education in order to prepare the state for growth in sectors requiring highly educated workers.

The website also said that Maryland ranks second in the nation in the percentage of professional and technical workers living in the state and is set to gain both defense and non-defense contracts for medical research, aircraft development and security.

With many sectors looking up, Patrick Donoho, president of the Maryland Retailers Association, noted that it has been a mixed bag this year.

“Sales have been up and down, I guess is the best way to put it, and some of have experienced a better year than others,” he told The Shelby Report. “It’s hard to say that we’ve had a good year.

“We are doing better than some, not as good as others; I think everybody in the state is waiting for the other shoe to drop, so to speak.”

Donoho said because so many Maryland residents are employed by the federal government, any job cuts could hurt the state.

“The super committee in Congress is going to make a decision on budgets, and given the proximity of Washington, D.C., many of our residents work for and/or around the federal government. So if cuts are made in the federal work force, for example, and federal contracts, it could have a significant impact on the Maryland economy. But as it is, our unemployment is below the national average, sales through this summer have been…up and down. In some ways we are doing better than we did last year, but it’s still a shaky economy.”

As the holiday season approaches, Donoho said that he is “cautiously optimistic” about sales.

“I just sent out a survey for our holiday sales and I expect to have the results at the end of the month. I think now, given the tone, expectations are a little less robust.

“Last year we predicted between two and two and half percent sales increases and that’s what happened; we didn’t get the 4 percent that everybody else did.”

On the state level, a nice surprise for the coming year is a projected $195 million surplus, according to Baltimore Business News.

In a Sept. 21 report, the publication said that the “Maryland government is on pace to post a $195 million budget surplus in the current fiscal year because tax receipt forecasts have improved.

The state is currently scaling down estimates for future growth, expecting tax revenue to grow 2.8 percent in the next fiscal year. Comptroller Peter Franchot warned that lingering unemployment and other economic stagnation could continue to have an impact.

The state Board of Revenue Estimates is predicting $14.1 billion in tax revenue in fiscal 2012, which began July 1. That is up from a March estimate of $13.9 billion, which the General Assembly used to create this year’s state budget, the report said.

Budgets and new taxes are hot topics in the state and Donoho, along with Rob Santoni, chairman of the Maryland Food Dealer’s Council, both have concerns about legislation that are on the table or recently passed in Maryland.

“Legislatively we are a true blue state; everything from minimum wage to plastic bags are issues,” Donoho said. “We have a couple of jurisdictions that have attempted to address plastic bag bans—Baltimore and Montgomery County being two—and there have been perennial bills in the state legislature.

“We don’t like it, a ban doesn’t seem to help anybody,” he said. “The tax is a nickel a bag, and it doesn’t seem to address where the litter is coming from. A lot of bags are recycled at grocery stores now. Then you’ve got proposals in Baltimore that are trying to track it and encourage recycling. Montgomery County put a nickel a bag on it, for not only plastic but paper bags, too.”

Santoni, who also is the president of Santoni’s Super Market in Baltimore, says it’s not the supermarkets creating the litter and there are other ways to solve the problem.

“I’ve always said that litter in Baltimore, the culprits are not the supermarkets, the culprits are the corner stores, the liquor stores, the smaller convenience stores that might put soda or candy or some sort of Tastykake in a bag for you and that person walks out on the sidewalk and discards it,” he said. “So, myself and a couple others, lobbyists and industry leaders convinced them that when people come to the supermarket, their end destination is home, to the kitchen, and that’s where the bags go.

“This is just a band(age), in my opinion, to the next line of legislation at the state level where there are rumblings of a plastic bag tax statewide. It’s another tax that hits people that can least afford it.”

New legislation from the city to state level hasn’t discouraged a new crop of grocery stores from moving into the state. Donoho said the exit of A&P has added new opportunities for other stores.

“The exit of A&P has brought some new players in the market that has long been dominated, at least the metro area, by larger chains,” he said. “I think what I’ve seen is kind of the resurgence of the smaller, more regional chains, independents, kind of a shakeout in the market. You’ve got players like Wegmans coming in, and Harris Teeter. So you see what I would call new entries, which makes it really interesting.”

One of the beneficiaries of A&P’s departure was Village Super Market, the Springdale, N.J.-based chain that purchased two of A&P’s SuperFresh banner stores in Maryland. On July 7, Village acquired the store fixtures, leases and pharmacy lists of the SuperFresh locations in Silver Spring and Timonium for $6.6 million. Village began operating pharmacies at these locations on July 7; the stores opened as ShopRites on July 28 after minor remodeling.

Village Super Market has 28 stores under the Shop Rite name in New Jersey, Maryland and eastern Pennsylvania.

As Donoho mentioned, North Carolina-based grocer Harris Teeter opened its first store in Maryland this year. It has been open since late April in Olney.

The Olney store, located in Fair Hill Shopping Center, is Harris Teeter’s fourth LEED building.

Similar to other Harris Teeter locations, the Maryland store has recycling centers in the lobby. But it was built with additional energy and environmental design components to make it eligible for LEED certification. Green features include freezer cases designed with LED lighting and watersaving devices in all of the water fixtures. The store is 19 percent more energy efficient than the industry average and uses 75 percent less refrigerant load. The company also anticipates water savings of more than 50 percent in this store as compared to other locations.

Existing retailers also are opening new stores in Maryland.

Safeway, the California-based supermarket chain that operates a division in Lanham, Md., opened a new store in Bethesda on Oct. 13 at the corner of Bradley Boulevard and Arlington Road, on the same site where the previous store had stood since 1956.

This was the first of two new full-service Safeway grocery stores opening in Montgomery County this fall, both of them designed to be the county’s first LEED-certified supermarkets.

“We currently have 66 stores in Maryland, having opened No. 66 last night (Oct. 13) with an in-store gala celebration in Bethesda,” a Safeway spokesperson told The Shelby Report. “We have another new Maryland store under construction in Olney, with another breaking ground in November in Wheaton. All three of these stores are being designed to be LEED certified.”

The new 48,000-s.f. Safeway in Bethesda is nearly double the size of the old store, and was constructed in about 14 months after the previous store closed. In order to bring the company’s Lifestyle design to the neighborhood, the existing Safeway was razed and the new store was constructed at the front of the former parking lot, creating a more urban, pedestrian-friendly and attractive storefront. Safeway’s sales floor will be located on a single level, with an entrance into Safeway’s lobby at the intersection of Bradley and Arlington.

The Lifestyle format emphasizes the store’s perishable offerings and features natural materials such as mahogany throughout the service departments. Kiosks replace the traditional counter areas found in previous generations of Safeway stores.

Highlights include a specialty cheese department with a cheese expert and an olive bar; an upgraded Starbucks coffee bar, along with an indoor seating area and an outdoor café; and a Bergmann’s Dry Cleaners. The full-service, scratch bakery has an open-flame hearth oven, where European-style artisan breads are baked fresh daily.

Within the key service areas, the deli offers a wide variety of hot and cold prepared foods including the company’s line of fresh Signature Stock Pot soups, made-to-order sandwiches and salads.

The Bethesda store has been designed to be the first LEED-certified grocery store in Montgomery County, and would be Safeway’s third.

Pennsylvania-based Weis Markets, which operates about 23 stores in the state, reported strong results in its third quarter.

The chain reported on Oct. 11 that its third quarter sales had increased 6.0 percent to $678.6 million and that its comparable store sales increased 6.5 percent during the 13-week period ending Sept. 24, compared to the same period a year ago.

During the period, net income increased 4.1 percent to $17.0 million compared to the same period a year ago.

“Our company continues to generate strong results in a difficult economic environment,” said Robert F. Weis, chairman. “Cautious consumer spending due to the poor economy continues to impact our business. Fuel and wholesale inflation impacted our business during the period. We absorbed a significant portion of these cost increases during the quarter and did not pass them on to our customers. Our company continues to benefit from improved operating performance and execution at store level, increased supply chain efficiencies and a disciplined and effective go-to-market strategy.”

Topping the new stores in the state, in number of square feet as well as number of products sold, is the Wegmans Bel Aire store that opened Sept. 18.

When Al Jackson, store manager of the new Wegmans Bel Air, talked about his reasons for moving to Maryland five years ago, “his eyes lit up,” according to a company press release. “This is where the action is. We’re breaking new ground, opening stores in areas where people don’t know that much about Wegmans. It’s a chance to test ourselves, to see if we’re up to the challenge.”

The new store is located at Box Hill Square in Abingdon.

“We’re hoping for high marks from our new customers,” Jackson says.

The 122,000-s.f. supermarket will include a Market Café with indoor and outdoor seating for more than 200; a Day Boat station for cutting whole fish that is delivered daily directly to the store; 700 different fruits and vegetables on any given day, with 100 or more organic and many local offerings; and prepared foods ranging from fresh sushi and homestyle barbecue to Asian-inspired dishes at the Wokery and hot and cold selections at the Vegetarian Bar.

Jackson, who has worked at Wegmans for 22 years, said at the time that he was ready for the grand opening.

“I had worked in restaurants for many years and was looking for a job where I could really grow and continue learning,” he says.

He worked his way up to a position as deli manager at Wegmans’ flagship store in Buffalo on Alberta Drive and then moved on to a series of roles in training/development and support for new programs. When the opportunity came along to join Maryland’s Hunt Valley store as perishable area manager in 2006, he jumped at the chance.

For Jackson, one of the greatest joys of opening the new store was assembling the 520-member team, the press release said.

“We found such an excellent pool of candidates in and around Harford County eager for an opportunity to join our team,” he said. “About 85 percent of our people live nearby. Our customers will be shopping with their own friends and neighbors.”

More than $1.6 million invested in training alone paved the way for the entire team to be at their best for opening day.

“We’re ready,” says Jackson. “The final touches are … put on our new store, but our work impressing customers is just beginning.”

Featured Photos

Featured Photo PLMA Annual Private Label Trade Show
Donald E. Stephens Convention Center
Chicago, Illinois
Share via
Copy link
Powered by Social Snap