Arizona will host Super Bowl XLIX on Feb. 1. As if that alone isn’t generating enough excitement across the Grand Canyon State, there’s a real possibility that Arizona’s home team—the Cardinals—will be playing in the big game. At this writing, the Cardinals’ record stood at 9-3, ranking the team first in the NFC Western Division.
Tim McCabe, president of the Arizona Food Marketing Alliance (AFMA), says the Super Bowl—to be played at the University of Phoenix Stadium in Glendale—“really stimulates a lot of good retail activity for us.” The notion of the Cardinals going all the way, he adds, creates “the ultimate level of excitement.”
In 2009, for example, when the Cardinals went to the Super Bowl in Florida, “every weekend leading up to the game was like a Super Bowl weekend for the food retailers here,” McCabe says.
“It really drove sales for the whole month leading up the Super Bowl,” he tells The Shelby Report. “And we’re excited about the possibility that could happen again, and with the game being played right here. This will be a great opportunity for retailers, suppliers and consumers.”
In addition to the Super Bowl, Arizona will host the 2015 Pro Bowl on Jan. 25 as well as the Waste Management Phoenix Open Jan. 26-Feb. 1.
“The Phoenix Open is the largest-attended golf event in the country, well over half a million people attended last year,” McCabe says. “You have a lot of other activities around that same time period, which will generate a lot of tourism business, and that’s very good for us as well. We’re encouraged by that…we’re looking forward to starting the year off strong, and we just hope that growth will continue and that 2015 will see some rebound in some of the key measurements for business.”
An economic boon is much needed in Arizona.
The state’s unemployment rate remains high at 6.8 percent, a full percentage point over the national average. Arizona’s overall economy has remained flat for more than a year, mostly due to a declining housing and real estate market following a brief growth period in 2012 and 2013.
“A lot of that growth had to do with investors coming into the market, and the foreclosures and short sales had significantly been reduced. We were very encouraged by what we saw but, now in the last year since the middle of 2013, the real estate market has gotten very stagnant for sales. The investors are pretty much out of the market now. More and more people here are renting and not going back to purchasing homes.”
McCabe believes part of that is because of the number of foreclosures and short sales; and it is difficult to get loans from banks and lenders.
“The only growth in the marketplace today, especially new growth, is in rental properties,” he says. “If you see anything being built right now it’s primarily apartment buildings or condos.”
Phoenix, in fact, is ranked among the top 10 cities in the country in new building growth for rental property.
“Homes are on the market longer now than they were in the past,” McCabe says. “It’s definitely had an impact on what’s going on in the state. We were seeing some good things happen and were encouraged, but that’s all changed in the last year.
“We are optimistic about a turnaround, or growth in the real estate market in 2015, but we anticipate that the growth will be very slow.”
On the retail front
“We are seeing some of our retailers starting to open some new stores. That’s the first time in several years we’ve seen this. But most of the retailers are putting their capital into remodeling their current stores,” he says. “Before the recession hit we were overbuilt and had too many stores, and now more of them are fine-tuning their stores by putting the resources into existing stores.”
For instance, seven former Pro’s Ranch stores in Arizona have rebranded to Los Altos Ranch Market after Pro’s Ranch filed Chapter 11 and was purchased by CNG Ranch LLC—a partnership between California-based Cardenas Markets and Northgate Gonzalez Markets—earlier this year. Four Pro’s Ranch stores in Texas and New Mexico also have been rebranded, a CNG Ranch spokesperson tells The Shelby Report.
“We we’re thrilled that a retailer like Cardenas-Northgate came in here and took those stores over, because several of those stores were in food desert-type areas, or lower income areas,” McCabe says. “They provided a good service to their communities, and then Los Altos came in and they have really done a good job of opening those stores up and providing their customers an opportunity to shop in the same locations.”
Additionally, McCabe says it appears Los Altos Ranch is diversifying beyond the Latino market.
“I think they’re trying to reach out to a wider consumer base,” he says.
McCabe says the pending Albertsons/Safeway merger also has the industry’s interest. The merger will result in an extremely large footprint for the companies in Arizona, and McCabe says there’s little overlap among stores.
“I think there’ll be a very few stores that’ll have to be closed down,” he says.
In other store news:
• Fry’s, a banner of The Kroger Co., opened its newest Arizona store in late August at 19403 RH Johnson Boulevard on the former site of the Sundome Center for the Performing Arts in Sun City West. The store is more than 94,000 s.f.
•WinCo Foods opened its second Gilbert store Oct. 9. The more-than-94,000-s.f. store at 1363 N. Arizona Avenue marked the fifth in the state for the Boise, Idaho-based grocer.
• Whole Foods Market made its debut in Prescott on Nov. 5 as it reopened a New Frontiers Natural Marketplace it bought in spring 2014. The store marked the Austin, Texas-based chain’s 10th location in Arizona.
An additional store in Tempe is among 12 new locations across the nation that Whole Foods said in early November that it had signed a lease; other leases in the western U.S. are in Seattle and Santa Clara, California.
• Colorado-based Natural Grocers by Vitamin Cottage plans to open its fourth Arizona store in Tucson, at 7220 E. Broadway Boulevard, on Jan. 20.
• Phoenix-based Sprouts Farmers Market will open a store at 23269 N. Scottsdale Road in North Scottsdale on Jan. 21. “Sprouts continues to grow…” McCabe says. “A lot of their growth is outside of Arizona, but they are continuing to open stores here in the state.”
State’s food industry gathers to honor three execs, celebrate 2014
A record-breaking crowd of more than 1,000 gathered Oct. 17 at the Phoenix Downtown Sheraton to celebrate Arizona’s food industry during the Arizona Food Marketing Alliance’s (AFMA) Evening of Excellence. The annual gala recognizes the Retailer and Supplier of the Year, and an industry icon is inducted into the Arizona Food Industry Hall of Fame.
Retailer of the Year: Jim Nielsen, Sprouts Farmers Market (see feature photo above)
Following in his father Glen Hartey’s footsteps, Jim Nielsen began his career nearly 28 years ago bagging groceries at his neighborhood Smith’s Food & Drug store in Ogden, Utah. For more than two decades, Nielsen has held numerous positions in the grocery industry, including a number of key management, merchandising and store operations positions with Smith’s, Wild Oats and Henry’s Farmers Market, where he last served as president.
In 2011, he joined Sprouts as COO overseeing company operations, sales, merchandising and supply chain. As the company more than doubled in size, he was instrumental in completing the successful acquisition and integration of the Henry’s Farmers Market, Sun Harvest Market and Sunflower Farmers Market chains.
Nielsen is passionate about visiting the company’s stores and spending time with those stores’ team members. When he isn’t walking the aisles looking for ways to make the customer experience even better, he is chatting with both customers and team members to learn more about what’s working, what’s not and how he can make a difference.
Nielsen is admired for his commitment to family, friends and the community. Whether it involves donating to a local charity, or canceling a flight to be there for a family member or friend in need, he is known for often putting others first.
Serving as a leader at a fast-growing company with more than 17,000 team members doesn’t leave much time for hobbies, but when he does have a spare moment Nielsen likes to perfect his golf swing or squeeze in a workout at the gym.
Supplier of the Year: Paul Ratner, Southern Wine & Spirits
Paul Ratner was born in Houston, Texas, but his family soon settled into the Moon Valley neighborhood in North Phoenix, where Ratner learned from his parents at an early age the importance of working hard.
He began working at Southern Wine & Spirits (SWS) in August 1995, starting as a sales representative in the East Valley and quickly moving to a top sales route in Scottsdale. He was then promoted to division manager overseeing a sales team; later promoted to director of sales overseeing multiple sales teams and training; and then promoted to account executive making headquarter sales calls with a key local retailer. From there, Ratner was promoted to GM for the company’s Elite Chain Division. In this role, he had responsibility of managing the full sales division and built strong relationships with retail partners. SWS continued to grow at a fast pace, so it started another off-premise chain sales division; this created a demand for the organization to have one person overseeing the divisions and working with the SWS national account sales team. In March 2013, Ratner was promoted to his newly created and current management position within the organization—off-premise general sales manager.
Hall of Fame Inductee: Don Olsen, Olsen’s Marketplace IGA
Don Olsen has been in the grocery business his entire life, starting at an early age in his father’s store in West Seattle, Washington. His first job was cleaning and crating the glass soda pop bottles for return to the local distributor. Leadership skills honed as an oarsman during three years of crew at the University of Washington, where he received a bachelor’s degree in retail marketing, and as an officer in the Washington State Food Dealers Association, prepared him for his eventual role and impact on the grocery industry in Arizona. After many years of vacationing in the state, Olsen and his young family moved to Yuma, Arizona. His commitment to the small communities of Yuma, Wellton and San Luis included three complete grocery markets that also carried Hispanic products for that growing population.
In 1987, Olsen expanded into tiny Ajo. He created another Olsen’s Marketplace but, this time, the Independent Grocers Alliance (IGA) was his new resource to succeed. Olsen’s Marketplace IGA is the only complete supermarket in Ajo, serving a rural, isolated population. Olsen’s has earned the Five Star Retailer status from IGA by undergoing in-store appraisals, combined with employee tracked training and customer feedback, four years in a row. In 2012, Olsen added an Ace Hardware department and became one of the first combination stores with grocery and hardware.
Olsen served twice as chairman of the AFMA board and is the longest-sitting board member, beginning his service in 1976.
Olsen and his wife Bryanne live in Yuma. They have five grown children and five grandchildren.
Read more about this year’s honorees at afmaaz.org.
In addition to this year’s honorees, the gala featured a performance by world-renowned trumpet player Jesse McGuire, who wowed the crowd with his rendition of the national anthem. In addition, Jay Parry, president and CEO of the state’s Super Bowl Host Committee, shared some of the highlights Arizonans can anticipate both financially and culturally when the Super Bowl comes to the Valley Feb. 1.
Southern Wine & Spirits and Alliance Beverage provided this year’s gala attendees with an assortment of fine wines offered at both the wine garden and at the banquet tables. Alliance Beverage provided a welcoming glass of champagne and Bailey’s served with coffee during dessert.
This market profile story by Kristen Cloud appears in the January 2015 print edition of The Shelby Report of the West.