Challenging is a word some might use to describe the state of supermarkets in New Mexico. Others see it as ripe for changes, that if instituted, would benefit retailers as well as economically challenged residents.
While surrounding states are thriving in terms of population and economy, New Mexico hasn’t fared as well in recent years. Even Walmart hasn’t had the easiest time, closing at least one New Mexico location in 2023.
Economic analysts point out that food deserts are a serious reality in parts of the state. With a poverty rate hovering near 18 percent, many residents living in and outside of the most populous areas lack transportation, making markets within walking distance their default “store of choice.” For this segment, that often means grocery shopping is done in untraditional settings such as dollar-type stores that carry packaged, canned and some frozen goods but seldom have fresh food options.
Recognizing the need for increased choices, United Family (which is owned by Albertsons) is looking to expand its presence in the state.
The company has announced plans to construct a 50,000-square-foot-store under the Albertsons Market banner in Lovington. The town is in Lea County, which borders Texas in the Southeastern corner of the state and is the second largest oil and gas-producing county in the U.S.
The store, which is expected to open later this year, will be located between a Family Dollar on Main Street and an apartment complex. The plans also call for a fuel and convenience store to be built under the banner Albertsons Market Express.
Aside from Albertsons and dollar stores, Smiths, Lowe’s Market and Walmart Neighborhood Market dominate the landscape in the Land of Enchantment. Each has found success by catering to specific consumer bases.
Closer look
IBISWorld recently took a detailed look at the grocery industry in New Mexico. Its data shows that, as of 2023, New Mexico is home to more than 330 grocery stores. Grocery retailers represent $4.5 billion in revenue for the state and 0.5 percent of the state’s GDP.
During the past five years the supermarket industry in New Mexico saw annual growth of 3.5 percent, noted the IBISWorld data.
Employment and wages saw a slight uptick as well. Supermarkets employ about 15,200 people in New Mexico, which increased an annualized 2.3 percent during the past five years. Looking through to 2028, those employed in supermarkets is expected to increase.
IBISWorld found that total wages for supermarkets in New Mexico accounted for $449 million, which represents an increase of 3.6 percent over the past five years. The data shows the average grocery store employee in New Mexico earns just shy of $30,000 a year, which is 3 percent lower than the industry’s national average wage.
During the next five years, IBISWorld forecasts the state’s supermarket industry will grow an annualized 1 percent to $4.7 billion, while the national industry is expected to grow 0.1 percent.
The number of supermarkets is expected to decline 0.4 percent, to 327 locations. Industry employment is anticipated to increase an annualized 1.7 percent, to 16,534 workers, while industry wages will rise 1 percent, to $467.4 million, through 2028.
Top markets
Taking a closer look at the counties that comprise the state’s makeup, Bernalillo County – where Albuquerque is located – has a population of 670,000 and is home to the most supermarkets in the state. Some 30 percent of all the supermarkets can be found there, nearly 100 to be exact.
Supermarkets in this county contribute $188 billion to the state’s economy, employing more than 6,000.
Sante Fe is the next largest market, with 34 stores, or 10.2 percent of the market. This county contributes $480.6 million in revenue and employs 1,139 at supermarkets.
Dona Ana County, home to 210,000 residents, is the third most populated market in the state, with 30 grocery stores. It pulls in $459.2 million and employs 1,708 workers.
Many faces
With the majority of the population living in just a few markets, Austin Anaya, an economist analyst based in Albuquerque, said residents outside of these areas often have few quality choices on where to shop.
This wasn’t always the case, noted Anaya, who pointed out that in the past 50 years the landscape of New Mexico grocery stores has dramatically changed.
In addition to studying the economy, Anaya’s connection to the state’s grocery industry runs deep. His grandfather owned Mike’s Friendly Store for some 60 years in rural Moriarty, population 1,800, where Anaya worked as a young man.
When his grandfather retired in 2011, no one was interested in buying his store because by then Walmart and several Dollar and Family Dollar stores had opened in the area.
Anaya said there is one independent grocery store in Moriarty, but smaller stores in towns like Estancia (15 miles south of Moriarty) that don’t have the volume to participate with a co-op have died out. Belonging to a co-op in New Mexico, he added, is what has allowed many of the remaining independent retailers in the state to compete against the larger chains.
Anaya said residents in rural areas shop at dollar stores for canned and frozen food. Whatever they can’t buy there, they have to drive to the city to purchase – typically at Walmart or Smiths.
“The rumor we are hearing is that some of the dollar stores are looking to bring in fresh products, but so far that hasn’t been the case,” he said.
In more populated and affluent areas such as Albuquerque’s northwestern heights, most of Santa Fe and Los Alamos, Anaya said shoppers can find a Trader Joe’s, Whole Foods, Smith’s, Walmart or Target. However, in other areas of Albuquerque, he noted, things look a little different.
“Albuquerque’s International District and South Valley appear to be the worst food deserts in Albuquerque, but around 30 percent of New Mexicans live in federally designated food deserts now – most of them in areas that are rural, poor, minority, or all of the above,” Anaya said.
“There are some bright spots to point to. Downtown Albuquerque got a small grocery store called Silver Street Market in 2016. Without it, the situation would be much worse for Albuquerque’s greater downtown area,” Anaya said.
Being the fifth largest state by area and 36th largest by population, New Mexico is among the most rural states in the U.S., he said, adding that outside of the Permian basin and a few other areas, people are leaving rural towns in search of better-paying jobs in Albuquerque, Santa Fe and Las Cruces.
“This population drop is making it even harder for grocery stores to operate in small towns unless there’s volume enough to support a co-op-backed medium-sized grocery store.”
He added, “Customers will choose small grocers over big box stores (even if the prices are slightly higher) because they’re accessible and within walking distance, but you need the density to support that.”
And for rural communities that are losing people, the situation may continue to get worse. To reduce food deserts in rural and urban areas, Anaya said governments need to create a business environment where small independent grocers can compete again.
“It’s become a perfect storm resulting in continued food insecurity. A holistic approach focused on corporate tax and land-use reform is most likely the best long-term solution,” he said.
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