Election years are a busy time for any trade group and this year is no exception for the California Grocers Association.
“Politically we’re going through an interesting time in Southern California and the entire state right now. The presidential election this fall has created a headwind of sorts,” said Nate Rose, the group’s senior director of communications.
Rose is hopeful the initiatives the group has been working toward will find traction this year. Two of the top initiatives involve organized retail crime and resusable shopping bags.
According to CGA, the No. 1 concern its members have is retail theft. This topic is top of mind for every retailer in the state, but Rose said it has become a growing concern for Southern California grocers in particular.
While organized retail theft is not a new issue, the inability to prosecute has many businesses in SoCal calling “uncle.” According to Rose, there is new political interest around addressing retail crime statewide this year as various community, political and law enforcement groups have been taking an active role in coming up with solutions.
Currently, there are several legislative proposals being considered, including creating new criminal codes and undoing some of the unintended consequences of Proposition 47.
“For example, we are looking at putting forth language that would create new criminal codes so that it is easier to charge retail thieves with crimes,” Rose said.
“This year is a little bit different because there is new political momentum behind the issue that just wasn’t in the room in years past. Where before we couldn’t get legislation out of committee, this year it’s a different story and we have more political support.
“It’s just a sea change in terms of how politicians are seeing this issue. Everyone has just had enough when it comes to retail crime. This is reflected in the number of pieces of legislation all taking aim at this issue.
“It is an election year, which amplifies the pressure. There is a whole new momentum around the issue, which is great for California retailers because retail theft and the inability to prosecute has been a huge struggle, especially since the pandemic.”
Sustainable approach to bags
California is home to politicians and voters who take pride in being environmentalists.
A decade ago, the state passed a bill that eliminated single-use carry-out bags. The goal was to prompt shoppers to bring reusable bags they had at home.
At about the same time, heavy duty plastic bags were introduced that were designed to last for many uses. But according to Rose, shoppers viewed them as disposable.
Instead of saving and reusing them, they threw the bags away and bought more the next time they shopped. This practice, Rose noted, defeated the purpose of encouraging bags to be reused.
It wasn’t long before activists began pushing for stricter rules to crack down on plastic. So this year, legislation has been introduced in support of banning plastic film bags.
“The state is looking to cut down the number of plastics and packaging being used by consumers and has proposed a bill that would ban grocery stores from providing plastic film reusable grocery bags to consumers at the point of sale. CGA is supporting this legislation,” Rose said.
Changing identity
Calling the past three or so years “a wildly complicated time,” Rose said the pandemic brought sales and volume growth to the grocery industry. “Then just as sales stabilized, inflation hit, upturning everything,” he said.
According to Rose, California grocers are adapting to changing demographics and shopper preferences through experimentation and recalibration.
“There’s conversation taking place right now in California’s grocery industry about how to get back to basics and back to growing. Because as it stands, people are having to make some tough choices when they go to the grocery store,” he said.
“At the same time, the inputs haven’t changed, and getting product to the shelf hasn’t gotten any cheaper, so it’s a very complicated economic scenario we’re living through right now.”
For some time, California has been losing population – or as Rose refers to it, “negative net migration.” Looking for an easier pace and lower cost of living, residents have turned to states such as Texas and Florida to call home. In fact, California has been losing population to such a degree that it has lost some political representation in the House.
The population demographics in Southern California have also continued to shift.
The areas of Costa Mesa and Santa Ana have changed demographically, with both gaining Latino residents. Having steadily grown since the mid-2000s in Costa Mesa, Latinos now comprise more than 36 percent of the population.
“This diversity is reflected back in independent grocers in SoCal, where there’s a lot of really strong retailers serving the Hispanic demographics,” Rose said. “There is also 99 Ranch Market, one of the largest Asian supermarket chains. This retailer is seeing plenty of success because its products are meeting the needs of the people who live there and reflecting the communities they serve.”
As for other grocers, many are doing what Rose calls “recalibrating,” which for some means experimenting with smaller footprints. And for others, it means closing underperforming stores.
Southern California is also seeing a lot of innovation and experimental experiential retail stores popping up. “There is a lot of investment in this region toward finding the right formula, whether it’s a smaller format, food halls, a marketplace tech project or opening in a shopping mall,” Rose said.
“I think everybody obviously is watching the merger situation with Kroger and Albertsons and wondering, if it passes, how does that trickle down into a place like Southern California where both those brands have a huge presence and lot of stores in close proximity.”
Read more association news from The Shelby Report.
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