The economy in the Lone Star State continues to improve but is hindered by inflation, supply shortages and workforce gaps, according to Gary Huddleston, a grocery industry consultant for the Texas Retailers Association.
Independent grocers have the larger challenge as wholesale distribution becomes less reliable compared to larger chains, which have their own dedicated supply structures. The issue is affecting all aspects of the supply chain – from the grower, manufacturer, trucker, warehouse and store stocking, Huddleston said.
“Larger retailers are utilizing robots in distribution centers to unload trucks, stock and pick products from bins, assemble orders and load delivery trucks,” he said. “Many grocers have invested in self-checkout due to staffing challenges and the goal of quick checkout.”
While the grocery market remains strong, the cost of doing business is rising. Inflation has negatively impacted the day-to-day operations of retailers, along with other arbitrary fees such as those for credit cards, Huddleston said.
“The cost of services like parking lot cleaning, trash removal and refrigeration repair have increased. Supplies to do business – plastic bags, meat trays, cleaning supplies, deli gloves, etc. – have increased and continue to increase.”
Grocery shoppers continue to find ways to save money in a state that has “additional families moving [in] daily.” Home delivery and pick-up sales are rising and grocers continue to invest in technology.
Customers and retailers supplement inventory shortages by buying private brands or trying new ones. Many grocery retailers have loyalty programs to recognize and reward loyal shoppers. These programs have yielded good results for retailers, helping steer them toward better purchasing habits and customer satisfaction.
“As a general rule, grocers are optimistic but still cautious,” Huddleston said.
Texas is in its legislative session. Huddleston said the TRA aims to reduce the inventory tax retailers pay on unsold items sitting at year’s end on shelves and in back rooms and warehouses.
“Another goal is to work with federal and state partners to reduce the interchange fee charged [to] retailers on every credit card transaction,” Huddleston explained. “Crime continues to be a challenge and not just shoplifting, but organized retail crime.”
While Huddleston didn’t mention any specific legislative proposals, he did say the TRA is opposed to any bills that would “limit customer choice and raise the cost of doing business.”
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