Brandon Scholz, president and CEO of the Wisconsin Grocers Association, said the Badger State is not immune to challenges such as inflation and price increases. “It affects us just as much as everybody else.”
Scholz noted the dairy industry in the state remains strong and is an important part of the Wisconsin economy.
“Overall, I think the impact on stores because of the economy and inflation, again, has been similar to what you’ve seen in other states,” he said. “Customers deal with high prices; they deal with inflation.
“Retailers continue to try and put best price, best products on the shelf, but there are some tools that aren’t there where they used to be. There’s not as big of a coupon program. There’s not as big of a sampling program. COVID really made a lot of changes in how grocers are reaching out to their customers.”
Post-pandemic, grocers continue to struggle with workforce issues. This has caused changes in store structure, such as more self-checkouts and electronic shelf labeling “because those things tend to be labor intensive,” Scholz said.
On the topic of workforce, the WGA decided to incorporate positions on quality of life after a discussion on the difficulties in hiring workers. Scholz said they identified five areas that go to improving quality of life:
- Crime: Not only in the grocery store but on the street.
- Daycare: The model has changed in Wisconsin. “We see that as a challenge, not just something to throw money on.”
- Housing: Making sure that homes are affordable for associates working in retail stores, including looking at funding to convert old, dark commercial buildings into residences.
- Education: Quality of what is offered – public, private, charter, virtual school choices.
- Taxes: Looking at all forms of taxation.
“Those five things are broad categories that have lots of specifics,” said Scholz, adding that some may not have anything to do with the retail world but still are considerations. “That’s been something new for us to pay attention to, those quality-of-life issues, in a more formalized way.”
Retail theft ‘serious problem’
Wisconsin grocers join their counterparts nationwide in dealing with increased instances of theft, whether simple shoplifting or organized retail crime.
“It is pervasive throughout the industry,” Scholz said. “People are stealing. Whether they’re doing it on their own or they’re part of an organized effort where they’re cleaning out by the thousands of dollars, it’s continued to become worse of a problem than it ever has been.”
According to Scholz, people tend to forget that customers end up paying the price.
“It’s the honest people. It’s your shoppers, it’s your customers that come in every day and buy a product and pay the bill and go home. They’re the ones that eventually are going to pick up the cost of this.”
While retail theft may not be a high priority for law enforcement, Scholz said retailers must “figure out what we can do in-store.”
“Over the years, the Wisconsin Grocers Association has been a leader in working to strengthen or stiffen penalties for shoplifting, whether it’s by an individual or it’s organized retail crime. Whatever the range of crime is, we know for a fact that the stronger the penalties, it will act as a deterrent,” he said.
Mike Semman, VP of governmental affairs for WGA, said the organization is working with a number of different entities to “beef up both our organized retail crime statute and the retail theft statutes.”
WGA is working with district attorneys throughout the state, along with police associations and other retailers to increase the penalties for violence and the threat thereof. They also are looking at creating a new platform to connect grocers, retailers and law enforcement.
Semman said district attorneys also are advocating to allow retailers to present direct evidence to the DAs, allowing them to bring charges from that evidence.
The Wisconsin legislature, which convened in January, remains in session. Scholz said WGA is continuing to work on home delivery of alcohol, adding he hopes it will be addressed this fall or next year.
Semman said a “major win” in 2023 was the repeal of the personal property tax.
Retailers no longer will have to pay “an antiquated tax” on shelving and equipment they already had purchased.
“If you’re a grocer and you buy a cooler and you pay the sales tax on it, you will pay the personal property tax, which is based on a formula – you will pay that for 29 years. You’ve already paid the [sales] tax,” Scholz explained.
When looking at every piece of equipment in the store, the tax could cost small grocers about $25,000 a year, while larger grocers could be paying hundreds of thousands of dollars each year to their municipality.
“This has been a huge, huge undertaking,” Scholz said. “It’s almost a decade worth of work. It’s about a $400 million tax decrease for retailers in the state.”
Other good news for Wisconsin grocers is the legislature increased the sales tax discount for the first time in 40 years, Semman said.
Currently, when a grocer collects sales tax and credit card fees, the state allows them to keep a small portion. “We were able to increase that by 50 percent that retailers are allowed to keep,” Semman said. The increase went from 0.5 percent to 0.75 percent.
Independent grocers have always been strong in Wisconsin.
“Grocers are a resilient bunch … You look at the last three years in this industry, whether it’s Wisconsin or any other region or any other state – it’s amazing.
“I believe the state of our industry in Wisconsin is very healthy. Every day, you’re seeing retailers going at it, taking on challenges just like they’ve done all the time.”
The WGA’s annual Innovation Expo is scheduled for Oct. 17-18 in Appleton. The two-day event will feature seminars and educational opportunities for members. It also will include keynote addresses from industry experts, the annual bag-off competition and awards banquet.
New this year will be a focus on Wisconsin women in the grocery industry. The association is partnering with Women Grocers of America, whose chair is Kristin Popp, EVP at Wisconsin-based Woodman’s Food Markets.
Read more association news from The Shelby Report.