Last updated on August 23rd, 2016 at 09:45 am
by Alissa Marchat/staff writer
From bourbon to fried chicken, Kentucky is known for a number of indulgences, but the Bluegrass State appears to be going “clean” and “green” when it comes to groceries. The state has seen a recent influx of players in the natural and organic grocery segment, including Lucky’s Market, Fresh Thyme Farmers Market and The Fresh Market.
Ted Mason, executive director of the Kentucky Grocers and Convenience Store Association (KGCSA), calls the changing grocery landscape an “interesting scene.”
“It’s kind of a backfill. You have the large supermarket operators, large big-box operators, that are doing a great job with their large stores, but there are all these different players that are coming in. With Lucky’s, it’s new to Lexington; it’s been in Louisville for a while. Fresh Thyme is in Louisville (and is) coming to Lexington. Fresh Market is in Louisville; now it’s in Lexington. It’s interesting watching what’s coming in with the smaller formats—specialty, organic or different formats that they have—what I call kind of ‘filling in.’ It’s been an interesting transition over the years to see how this is playing out.”
Fresh Thyme Farmers Market has opened two stores in the state this year, with a third about to debut. The retailer opened its first Kentucky store in Newport in January and opened its second store for the state in Louisville this spring. Its first store in Lexington, located at 125 East Reynolds Road in a former Office Max in Crossroads Plaza, was expected to open in August. At the time of this report (Aug. 11), it was hosting a weeklong hiring event.
In addition to specialty stores, Meijer also is bringing more stores to the state, and although its supercenters aren’t focused on natural and organics, the retailer says it will bring Kentuckians better access to fresh produce. Meijer opened a new 192,000-s.f. supercenter this spring in Owensboro, located along Heartland Crossing Boulevard, south of Leitchfield Road. The store was built to Leadership in Energy and Environmental Design (LEED) standards and offers more than 600 varieties of fresh produce, along with a full-service meat department that features fresh seafood, Certified Angus Beef and custom cuts of meat.
Governor’s initiative a boon for retailers
Kentucky Gov. Matt Bevin this summer promised to “identify and eliminate or revise outdated and unnecessary state regulations that hamper business growth in Kentucky” with the introduction of the Red Tape Reduction Initiative. The program is intended to help ease excessive or complex regulatory burdens that are a hardship for state business owners.
“As a business owner, I understand firsthand how difficult it can be for a new or growing business to be aware of, understand and comply with every government regulation,” Bevin said in an online statement. “While some regulations are very necessary and protect the public safety, others can stifle economic growth, impose unnecessary costs on businesses and impede private sector investment. These costs all get passed through to the consumer. I constantly hear from business owners that confusing government mandates and red tape are huge challenges for them. There are more than 4,500 state regulations on the books in Kentucky, and only 15 to 20 percent of them have ever been reviewed for effectiveness or ongoing need. This suffocating red tape is a problem that must be fixed and, with the help of all Kentuckians, we intend to do just that.”
Bevin is asking businesses throughout the state to assist in this effort by identifying burdensome regulations and offering suggestions for improvement. The governor has instructed cabinet secretaries to start a review of all government regulations currently on the books, and he is asking businesses throughout the state to help by identifying burdensome regulations and offering suggestions for improvement. Retailers can visit RedTapeReduction.com to submit those ideas for review.
The initiative has the support of many business organizations throughout the state, including the KGCSA and the Kentucky Retail Federation.
“I think a lot of regulations can be simplified, and this initiative presents the opportunity not only to reduce red tape, which is certainly needed, but to help compliance with needed regulations,” said Gay Dwyer, SVP of government affairs for the Kentucky Retail Federation.
Mason told The Shelby Report that his organization is excited about “trying to find some issues in the state, whether it be the WIC program, or the food stamp program, SNAP, that really cause retailers a lot of heartache sometimes…We’re really heartened by the governor’s interest in trying to take a look at regulations that may be outdated, that maybe just have no purpose anymore. So we’re trying to gather up a lot of information to provide him with some avenues to go down.
“We’re not by any means saying get rid of all regulations. But…there are some regulations that were made 10 years ago that probably haven’t been looked at or updated in that time frame. And that’s what we’re excited about—hopefully getting some of those things changed.”
In particular, Mason would like to see the time it takes for new stores to be compliant with regulations cut down.
“In my mind, in a business-friendly environment, if you’re buying a store or building a store, you should be able to open that store on day one and be able to accept SNAP and WIC and sell beer if you’re allowed to sell beer in that area,” he said.
In addition to input from business, the governor also is welcoming suggestions from the state’s residents.
“Any person who has dealt with government at any level may well have come across a regulation that just doesn’t seem to make sense. So, I invite all Kentuckians to contact us with their thoughts and ideas,” he said.
Other legislative victories in the state
In addition to the Red Tape Initiative, Kentucky’s governing bodies have given retailers and c-store operators other reasons to celebrate. The legislature’s local option sales tax (LOST) initiative, which would have allowed local government to add an additional 1 percent sales tax to goods, failed in the Kentucky Senate after passing in the House by a 60-31 vote. That’s a relief to retailers who already are serving as the state’s tax collector for little or no compensation, Mason said.
“We used to receive some revenue from the state or a small slice of commission from the state for collecting those taxes, (but that) has been reduced down to basically nothing. So you’re talking about another bucket, another stream of monies that must be managed and maintained and remitted to the state when we’re already doing all this and not receiving any compensation for it.”
The death of LOST also means retailers won’t have to worry about the potential for competitive disadvantages. Mason pointed out that the bill could have created situations “where you have one retailer across the street from another who is impacted by a local option sales tax and another one down the street who is not. There are some deep competitive issues that are brought into play there.”
There is the possibility that LOST could return to the legislature next year; it’s been an ongoing debate for years. But for now, retailers can breathe easy.
C-store operators also have cause for celebration. KGCSA earlier this year participated in the launch of a program initiated by Commissioner of Agriculture Ryan Quarles to combat credit card skimming at the gas pump.
“As the state inspectors are out metering the pumps and checking for proper flow and everything like that at the gasoline pumps, they’re also going to be looking for any kind of tampering with the pumps, where the thief may have placed skimmers either inside the pump or inside the reading mechanisms, things like that,” Mason said.
This service is going to be provided to c-store operators at no cost and at no added expense to the state.
“The inspectors are already inspecting the pumps around the state all year long,” Mason added. “And they’ve been trained to look for those types of devices. Because most of the time, retailers aren’t even aware they’re there. So that was an exciting program.”
Kentucky food prices rise for first time since 2014
For the first time in more than a year, food prices in the Commonwealth have increased, albeit slightly, according to the latest Kentucky Farm Bureau Marketbasket Survey. The quarterly survey, which calculates the average total cost of 40 basic grocery items, showed an increase of 1.03 percent in the second quarter. This is the first increase in food prices since the fourth quarter of 2014.
Overall, the cost of the items surveyed totaled an average of $120.16, compared to the $118.92 recorded during the first quarter of 2016. The largest individual category increases came from dairy, which rose in price by 5.4 percent, followed by beef with a 2 percent jump. The largest category decrease was attributed to poultry, which fell by 3.2 percent. Poultry was followed by fruits and vegetables, which experienced a nearly 1.5 percent drop.
When it comes to individual items, cheddar cheese saw the biggest increase at 87 cents per pound, followed by chuck roast, up 66 cents, and rib-eye, up 34 cents. The biggest decreases came from extra-large eggs, down by 26 cents per dozen, tomatoes down by 50 cents per pound and peppers down by 25 cents each.
Kentucky food price increases were slightly higher than the latest national Consumer Price Index information, which indicated a 0.1 percent decline in overall national food prices during June.
*Editor’s note: This is part of the Kentucky Market Profile, which appears in its entirety in the September print edition of The Shelby Report of the Southeast.
