by Kristen Cloud/staff writer
It’s little wonder Utah recently was ranked the most liveable U.S. state of the future, based on a survey of its citizens and community leaders.
With The Beehive State’s unemployment rate of 6.0 percent, well below the national 8.2 percent average, public perception is that the state is “getting better,” not “getting worse,” according to the Gallup survey results released in August. Utah continues to be one of the fastest growing states in the U.S.
“I would say that we’re in pretty good shape, all things being considered,” Dave Davis, president of the Utah Food Industry Association, tells The Shelby Report.
“We’re cautiously optimistic,” he adds. “I think as an industry we’ve weathered the most difficult parts of the storm and still feel like our state budget is in pretty good shape. So Utah is a very good place for businesses to locate and for the food industry in general.”
Utah’s state budget is a balanced one and, with pension reforms recently completed, should remain that way going forward, according to Davis.
“We still have about $243 million sitting in our rainy day fund, so we’re feeling pretty optimistic.”
That optimism also appears to be improving among retailers, as the continued mending of the state’s overall economy is reflecting positively in retailers’ attitudes.
Davis notes that he’s seen a change in many of them, in recent months particularly.
“Where many would report their flat numbers and be content with being flat, now we’re seeing gains in the market and people are back to more reasonable expectations of growth and seeing some sort of sales gains in the food industry.”
Salt Lake City-based Associated Food Stores, a supplier to nearly 500 grocers throughout the Intermountain West, reported in June a 4.6 percent increase in total fiscal year 2012 sales, surpassing the $2 billion mark.
“We are determined to make our retailers more profitable,” says Associated President and CEO Neal Berube, who took the lead role at the co-op following longtime leader Richard “Rich” Parkinson’s retirement late last year. “We have identified many of the challenges and opportunities we face, and with our board of directors’ support, plans were implemented to help us navigate our way through the economic challenges that our business and country face. We have seen improvements and will remain diligent in continuing down this path.”
The largest chain buying from Associated is Utah’s Harmons Grocery—with 16 stores in the state.
Harmons, co-owned by brothers Bob and Randy Harmon and celebrating its 80th anniversary this year, opened its latest store at City Creek in Salt Lake City in February. The two-level store, at S. 135 East, includes a 50,000-s.f. ground space that features a large produce department and meat counter with fresh fish. On the 18,000-s.f. mezzanine there is a deli with seating for up to 300 customers.
The Salt Lake City Tribune reports that the opening of the newest Harmons in the state capital is part of the $1.2 billion City Creek mixed-use development spearheaded by the real estate development arm of The Church of Jesus Christ of Latter-day Saints.
Harmons City Creek, just off the eastern edge of the 23-acre office-residential-retail project (www.downtownrising.com), is the state’s first large grocery store in a downtown business district.
“(With Harmons and others), our independent market seems to be doing well, as well as some of the larger chains,” Davis says.
Target opens in West Valley City, Trader Joe’s making state debut in 4Q
This positive shift in the attitude of retailers is apparent in the recent opening of West Valley City’s first Target store as well as the upcoming debut of Trader Joe’s in the state.
The 135,300-s.f. Target store anchors Highbury Centre, a commercial center at 2550
S. 5600 West, across the street from a WinCo. It opened July 29.
West Valley City officials have said they worked for about a decade to lure Target, based in Minneapolis, Minn., to open a store in Utah’s second largest city and, while the store is the first in the city, it is the seventh in Salt Lake County.
The West Valley City store also is the first prototype in the nation of Target’s new-store model that is no longer called Super Target, according to Desert News. However, it still stocks groceries, including fresh produce and packaged meat as well as pre-packaged baked goods.
Monrovia, Calif.-based Trader Joe’s plans to make its entrance into Utah in the fourth quarter with a new store in Salt Lake City. The 12,700-s.f. store will be located at 634 E. 400 South, a space formerly leased to Old Navy and, most recently, a seasonal Halloween costume shop, The Tribune reports.
Two-Buck Chuck, the Charles Shaw label of wine often associated with Trader Joe’s, will not be available at the grocer’s new Utah store since state law requires that spirits only be sold at state-run stores.
Supervalu remains a ‘wild card’
Though Supervalu, headquartered in Eden Prairie, Minn., now holds only a small share of the Utah market share, the company is considered a “wild card” player in the state, according to Davis.
“We all know they’re going through difficult times, and they had previously been making some forays here in the state to try to pick off some of the independent market. It’ll be interesting to see whether or not Supervalu continues or, under their restructure, whether or not they hold back and hunker down a little bit.”
Supervalu’s troubles have been well documented, with the latest news detailing the hiring of a new president and CEO, Wayne Sales (see story, page 1), in an effort to help speed up the company’s hoped-for turnaround.
In Utah, Davis says Supervalu has a distribution center in North Salt Lake and three Albertsons stores. In 2009, Supervalu sold 36 of its Albertsons stores in Utah to Associated Food Stores for $150 million.
“They have very little (of the market share), but what we were seeing is some move by Supervalu to perhaps court the independent grocery retailer and to hold themselves out as a secondary option to Associated Food Stores,” Davis says. “And I would anticipate, with their financial difficulties that they’ve experienced, that they (now) may pull back in that regard.
“They do have the distribution center here in Utah,” he adds, “so they may be looking at volume to feed that distribution center.”