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Market Profile Southeast

Kentucky Grocery Industry ‘Quite Strong,’ Retail Crime A ‘Huge Issue’

Tod Griffin, executive director of the Kentucky Grocers & Convenience Store Association.
Tod Griffin

The state of Kentucky reported General Fund receipts for July of $1.1 billion, which was the 11th straight month that revenues surpassed the $1 billion mark.

The state’s overall unemployment rate for July was 3.8 percent, which is very low historically, according to Tod Griffin, executive director of the Kentucky Grocers & Convenience Store Association. Total non-farm employment also fell slightly in July, suggesting that many employers are maintaining their employment levels but are not adding workers at the same pace as over the past year, he said. 

Certain regions of the state continue to see high unemployment that has plagued those areas for years, Griffin said. Residential housing inventories continue to remain on the low side, which is keeping housing prices higher, even with higher interest rates. Affordable housing is still in short supply. 

“That said, Kentucky’s cost of living remains very competitive with surrounding states and the region,” he said.

Since the beginning of his administration, Gov. Andy Beshear has announced more than 870 private-sector new-location and expansion projects, totaling about $26.8 billion in announced investments, Griffin said. 

He noted that Site Selection magazine recently placed Kentucky first in the South-Central region and top five nationally in its 2023 Prosperity Cup ranking, which recognizes state-level economic development agencies for their success in landing capital investment projects. The publication also placed Kentucky second nationwide and first in the South-Central region for its annual Governor’s Cup ranking for 2022, which recognizes state-level economic success based on capital investments. 

“In the past two years, Kentucky announced the two largest economic development projects in state history which will bring in approximately 7,000 jobs,” Griffin said. “These announcements solidify Kentucky as the EV battery production capital of the United States.”

Looking at the grocery industry in the state, Griffin said it remains “quite strong.”

“Independent grocers continue to serve their regional markets, and national chains are moving into the state, while current national grocers are building new stores.”

A “huge issue” for grocers is retail crime. 

“Even with alarms at doors and gates in some stores to make people walk through the checkout areas in hopes of deterring people walking out with items, the thieves are becoming more brazen in their shoplifting methods. Walking out with a full cart is not unheard of today.”

Griffin said KGCSA’s Government Affairs team is working in the state capital to raise awareness of the issue in hopes that an organized retail crime task force will be created or new legislation introduced to change the felony theft threshold and harsher penalties for offenders. 

Labor shortages are the biggest challenge facing all employers across the state, and independent grocers are no exception, Griffin said. These retailers have raised wages in hopes of attracting employees, but they consistently report they are having trouble getting people to show up for interviews or even stay on the job if they start, he said. 

Supply chain issues continue to plague the industry. Griffin said product shortages due to packaging or manufacturing labor seem to be the predominant causes. Ingredient shortages at the manufacturing level are causing some challenges.

Looking at grocery-related legislation coming out of this year’s General Assembly, Griffin noted the elimination of the sales tax on marketing services and internet advertising. The Kentucky Grocers & Convenience Store Association “stopped new tobacco sales restrictions and sweeping data privacy and security legislation that would have put a digital fence around Kentucky, stifle innovation and frustrate customers,” Griffin said.

Read more market profiles from The Shelby Report.

About the author

Treva Bennett

Senior Content Creator

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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