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Market Profile: Grocers’ Outlook, Economy At Steady Place In Nebraska

Nebraska profile Ricketts award
Gov. Pete Ricketts, left, received the National Grocers Association (NGA) Spirit of America award. At right is De Lone Wilson, chairman of the board of Nebraska Grocery Industry Association and president of Cubby’s.

by John McCurry/contributing writer

An early morning storm on Jan. 23 brought rain to the Lincoln, Nebraska, area. By noon, the rain had turned to sleet, followed by snow that continued throughout the day. Slippery roads became icy and packed with snow. When the precipitation stopped, there were four inches of snow on top of a layer of ice.

Nebraska profile legislative dinner
More than 200 Nebraska grocers attended the NGIA Legislative Dinner in January.

Those hazardous conditions, however, did not deter more than 200 representatives of Nebraska’s grocery industry from attending the Nebraska Grocery Industry Association’s (NGIA) annual Legislative Reception & Dinner at the Cornhusker Marriott Hotel.

Also in attendance was Gov. Pete Ricketts and 30 of Nebraska’s 49 state senators. With a unicameral and nonpartisan legislature, Nebraska is unique among states. Attendees of the dinner received a glimpse of issues during this year’s short sessions, scheduled to run through April 23. The NGIA is supporting some proposed bills and opposing others, as is the case every year. This year’s session is a short session, so any bills that are not prioritized have a small chance of passing.

During the dinner, Ricketts was presented with the National Grocers Association’s (NGA) Spirit of America Award. NGA, describing Ricketts as a “friend to the food industry,” cited his opposition to increases in the excise tax on tobacco and liquor and his opposition to removing the sales tax exemption on food, candy, soft drinks and bottled water as reasons for his selection for the honor.

The governor has stated: “New taxes on food, pop, candy and bottled water would hit working Nebraskans hard… As a matter of fairness, it’s not right to raise taxes on working families…”

Nebraska profile NGIA Siefken
Kathy Siefken

NGIA Executive Director Kathy Siefken told The Shelby Report that members were briefed on a variety of issues that could affect the industry. One persistent issue is a proposal to increase the state’s tipped minimum wage, which could affect some NGIA members in the foodservice business. The proposal gradually would raise the minimum wage for tipped workers from $2.13 to $4.50 per hour by 2022. A similar bill did not advance last year. Siefken doesn’t expect the bill to pass. Nebraska’s regular minimum wage is $9 per hour and any move to raise it is a hard sell, she said.

Property tax relief is one of the biggest issues in state of Nebraska, Siefken said, because they are considerably higher than surrounding states.

“Because we have fewer people here, the lower number requires a higher responsibility for things that we need such as roads, infrastructure and education,” she said. “There is a new proposal under consideration that involves an effort to reduce property taxes while at the same time keeping state taxes low, without shifting or adding taxes. It’s a juggling act. Since our economy sort of turned the corner and we have enough money to fund the basics, I don’t believe there will be an effort to tax food.”

Siefken said it’s an issue that seems to come up each legislative session. Nebraska does not currently tax food, but it’s something that some senators are considering. To date, NGIA has been successful in fighting it.

“The schools and public education we provide are high quality and, in order to maintain high quality, it takes dollars. What we don’t want to do is put education on the back burner, so it’s a balancing act,” she said. “It helps when our revenue is up, and we find ourselves in that position for the first time in a long time. It appears there will not be any new spending, but there will be dollars allocated to the basic things we need to fix such as prison reform.”

Like many states, legislation related to plastic bags and containers is under consideration. Nebraska is one of the states taking a statewide approach. A bill would require any new law regarding plastic packaging to be statewide rather than at a community level. Siefken thinks another bill, that would establish a 5-cent penalty to consumers for a bag taken at the point of sale, won’t pass.

 

Trending in Nebraska

Siefken noted that online ordering of groceries is gaining in popularity. Hy-Vee opened a fulfillment center in Omaha last summer to help feed this growing demand (liquor delivery is offered in Omaha and Lincoln). The fulfillment center delivers to individual stores for customer pickup as well as to customers’ homes.

“Hy-Vee is filing online orders out of their fulfillment center and shipping to local grocery stores in totes,” she said. But “it’s not just Hy-Vee. It’s evolving.”

There haven’t been many recent store expansions in Nebraska, but Siefken said Gary Suhr of Gary’s Super Foods is doing something notable by growing through acquisition of other small independent grocers. During 2019, he purchased Schmick’s Market in Broken Bow. He followed that up earlier this year with the purchase of Schmick’s Market in McCook. The two stores join two Gary’s Super Foods stores in North Platte.

“We are seeing small independent grocers broaden their base,” Siefken said.

So, with all of the challenges, what is the mood in Nebraska’s grocery sector?

“It’s positive because the people who have survived the last 10 years have taken it upon themselves to find better ways to do things,” Siefken said. “We are seeing existing stores being picked up and remain open. People are changing the way they do things while still serving the community.”

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