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Though Growth Expected To Slow, Georgia Remains Competitive Market

Maine Shelby Market Profile grocers

by Treva Bennett/staff writer

While Georgia’s economic growth is forecast to continue to grow in 2020, that growth is expected to be at a much slower pace, according to a report from the University of Georgia (UGA). The forecast is based on the Georgia Economic Outlook report, produced by UGA’s Selig Center for Economic Growth.

Dean Benjamin C. Ayers said the 2020 economic growth rate will be around 1 percent, with an estimated gross domestic product growth rate of 1.2 percent. He said the 2020 economy is expected to create less than one-third of the new jobs that were added in 2019.

“Georgia’s prospects for growth reflect the strength of the consumer, more homebuilding, a pipeline full of economic development projects and the Federal Reserve reversing course and cutting interest rates,” Ayers said. “Despite these powerful economic drivers, the state’s economy will slow down in 2020. The U.S. trade war with China and other trading partners is the main recession risk. And Georgia faces greater exposure to the trade war than most other states.”

Ayers said consumer spending will increase due to good labor market conditions. He said as long as job creation remains positive, the economy will operate close to full employment.

However, escalating trade tensions with the nation’s major partners will end economic expansion, the forecast states.

“Georgia is the nation’s 11th-largest export state and seventh largest import state,” Ayers said. “Any major step back from globalization hurts Georgia’s prospects for economic growth.

“A quick and decisive de-escalation of the trade war would substantially reduce the risk of a 2020 recession,” he added. “Nevertheless, there is a point where de-escalation comes too late to stave off a recession. We are close to that point.”

 

Competitive market for grocers

Kathy Kuzava, president of the Georgia Food Industry Association (GFIA), said while Georgia continues to be a very competitive

Kathy Kuzava Georgia
GFIA President Kathy Kuzava

market for grocers, many are continuing to expand due to the state’s growing economy. She said in September, Gov. Brian Kemp announced that for the sixth year in a row Georgia had been named the “Top State for Business” by Area Development, a publication covering corporate site selection and relocation.

Kuzava said although several grocery stores closed in 2019, many of those locations were picked up by other grocers, including independents who took the opportunity to expand their operations.

“Our strong economy has resulted in an unusually tight labor market, with Georgia unemployment at a record low,” Kuzava said. “Finding talent is a bigger challenge than ever, whether a company is looking for a meat cutter, a truck driver, a cashier or a manager.”

Although some grocers are continuing to open new stores and remodel others, food deserts remain in some areas and food insecurity continues to be a concern in cities as well as rural areas. Kuzava said food banks help where they can. Many grocers donate goods to food banks in their communities.

The Atlanta Community Food Bank (ACFB) serves more than 700 nonprofit partner agencies in 29 Georgia counties.

“Our goal is to fight hunger by engaging, educating and empowering our community. While our core work is food distribution, our efforts extend well beyond that,” said Kyle Waide, president and CEO of ACFB. “One of the many ways we’re fighting hunger in food deserts, specifically, is through our partnership with Fresh MARTA Markets. These innovative pop-up farm stands are located in five MARTA stations and provide affordable and fresh produce, grown both locally and non-locally. The goal of these markets is to decrease food insecurity in specific areas and increase the general well-being of those community members.”

Kuzava said food insecurity is a great concern as additional Supplemental Nutrition Assistance Program (SNAP) cuts continue. Since 1996, federal work requirements went into place for able-bodied workers between the ages of 18-49 with no dependents. During the recession, Georgia was given a waiver to relax the requirements during high unemployment, she said, and 40 percent of Georgia counties remain covered by the waiver.

However, beginning in April, only counties with unemployment greater than 3 percent—Clay, Telfair and Wheeler—will continue to qualify under the waiver, Kuzava said.

“The AJC reported that there are 54,000 childless Georgians who will fall under the new requirements,” she said.

 

Trending

Grocers across the state are seeing trends continue, with an increased demand for plant-based foods and for more convenience. Customers are wanting more fresh and prepared foods and are taking advantage of online ordering, with increases in curbside pickup and home delivery, Kuzava said.

Another continuing trend is more interest in CBD products. While interest continues, there are still many questions about the legalities of carrying the products, Kuzava said.

“The FDA has recently published a document to give clarity, but there is still so much confusion on this issue,” she said. “For example, the FDA says that ‘it is currently illegal to market CBD by adding it to a food or labeling it as a dietary supplement,’ but there are retailers across the state that have the product on the shelves. The GFIA is asking the FDA to issue comprehensive guidance so there is a level playing field for the product.”

The FDA is concerned there is still much to learn about the safety of CBD and recently has issued warnings about the lack of research, Kuzava said. For more information, visit fda.gov.

 

Legislative issues of concern

As the Georgia General Assembly convenes Jan. 13, GFIA’s No. 1 priority is to stop a “harmful restrictive labeling bill, which is still very much alive after passing the Senate last year,” Kuzava said. “This bill would make it unlawful to label, advertise or represent any food product as meat, beef, pork, eggs, fish or poultry unless 90 percent of the food was comprised of animal.”

She said the bill originally was introduced as a truth in labeling issue and would have been the most restrictive labeling bill in the country.

“Under the bill, a can of chicken and noodle soup’s label would have to change because the soup was not 90 percent chicken,” Kuzava said. “We appreciate the Georgia legislators who are listening to our concerns over this issue.”

The bill sits in the House Agriculture Committee.

Lawsuit reform also will be a top priority for GFIA during this session. A Senate Study Committee has been meeting over the last several months to assess the impact of the state’s existing tort laws on Georgia’s business community and make recommendations for needed changes.

“Testimony showed the increase in premises liability cases and how standards of negligence for property owners affect all businesses,” Kuzava said. “One attorney explained that the increased litigation could result in food deserts if grocers choose to leave neighborhoods considered to be in high crime areas.”

She said presentations to the committee addressed the rising trend in high damage awards and how this results in higher insurance premiums, which negatively impact large and small businesses.

“Grocers provided powerful testimony to the committee, which has recommended 19 reforms, including many that will be very valuable to the supermarket industry,” Kuzava said. “The GFIA is a member of Georgians for Lawsuit Reform, and we will be working to pass legislation this session.”

An alcohol delivery bill is a priority for several GFIA members, as convenience becomes more and more important to customers. Kuzava said GFIA is working with a coalition on a bill that would allow the delivery of alcoholic beverages from any of its members, both large and small.

Also expected to be under discussion are potential bans of everything from single-use bags to packaging to plastic straws. One pre-filed bill would ban the use of single-use plastic bags for retailers. Kuzava said several exceptions would be given, including plastic bags used in the meat and produce departments.

Bills introduced last year that remain alive for the 2020 session include increasing the minimum wage to $15 per hour; requiring merchants to charge a minimum of a $10 fee on money orders; and increasing the tobacco tax to $1.87 per pack as well as increasing the tax on cigars and other tobacco products.

Kuzava also said several alcohol bills are still alive, including expanded Sunday sales hours for package sales, tasting in package stores, the development of a statewide centralized alcohol license process and wholesaler/retailer relationship changes for small breweries.

For more information, go to gfia.org.

 

Retailer growth

Several retailers experienced growth in Georgia in 2019. Food City, headquartered in Virginia and owned by K-VA-T, had a big year in 2019 in Georgia, opening or expanding stores in the northern part of the state.

Food City opened a new store in Calhoun Dec. 4. Located on Lover’s Lane, the 49,700-plus-s.f. supermarket is the retailer’s first location in Calhoun.

An expansion and remodel of the LaFayette Food City was completed in September, adding more than 8,000 s.f. to the supermarket, bringing it to more than 41,100 s.f. The project also created several new jobs for the area. The expansion included the addition of a Food City Pharmacy equipped with a drive-thru as well as several upgraded and expanded departments and offerings.

The new Ringgold/Ft. Oglethorpe store opened Jan. 30, 2019, and serves as the area’s second location. The 49,700-s.f. store is located on U.S. Highway 41. In addition to its upgraded departments and offerings, the new location offers an in-store branch banking option with Tennessee Valley Federal Credit Union.

Georgia Gov. Brian Kemp announced over the summer that the state would gain more than 1,400 jobs through Amazon and Kroger. Amazon plans to open a new fulfillment center in Gwinnett/DeKalb counties that will create 1,000 new jobs. Kroger and Ocado Solutions will build a new Kroger distribution facility in Forest Park that will create 410 jobs.

Amazon will lease a built-to-suit building, which will be developed by Seefried Industrial Properties and cover acreage in Gwinnett and DeKalb counties. Employees at the approximately 700,000-s.f. facility will pick, pack and ship customer orders. In addition, Amazon will hire for roles in human resources, operations management, safety, security, finance and information technology.

Ocado’s technology, robotics and automation will help Kroger distribute its products to customers throughout the Southeast.

“The new facility will provide Kroger the ability to bring customers across the coverage area fresher food faster than ever before,” said Tim Brown, president of Kroger’s Atlanta division. “I’m thrilled the Atlanta market was selected as one of the 20 CFC [customer fulfillment center] sites, and this location is a tribute to the commitment and enthusiasm that Kroger has for the City of Forest Park, Clayton County and the state of Georgia.”

Kroger and Ocado decided to locate the new facility in Clayton County after a competitive search.

The company will be hiring technicians and filling other positions in engineering, operations and customer service.

Lidl will be expanding its presence in Metro Atlanta, with new stores planned for Brookhaven, Dunwoody and Peachtree Corners, according to a report from Tomorrow’s News Today—Atlanta. The German discount grocer is ramping up its delayed Metro-Atlanta expansion with plans for several new stores, the report states.

The new stores all would open in place of former grocery stores.

Earlier this year, Lidl opened stores in Snellville, Marietta/Austell and Mableton.

About the author

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Treva Bennett

After 32 years in the newspaper industry, she is enjoying her new career exploring the world of groceries at The Shelby Report.

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