CGA Senior Vice President Keri Askew Bailey told attendees at the 24th Annual Envisioning California Conference that while grocery retailers frequently seek new growth opportunities, numerous barriers often curtail these efforts.
Representing the grocery industry on a panel of experts addressing the topic “Food Poverty in an Agriculturally Rich State: How to Address Food Access Inequalities Across California,” Bailey said grocers face some of the highest energy, workers’ compensation, labor, regulatory and litigation costs in the nation.
She cited one example where a grocer had to obtain no fewer than 14 local permits, or licenses, along with an additional 14 state licenses before being able to break ground on a new store site.
These government issued requirements are more often than not in urban areas that historically include “food deserts” – local communities underserved by conventional grocery stores.
Compounding this problem in the last two years has been a statewide moratorium on WIC vendor authorizations. Typically WIC users make up a large portion of a grocery store’s customer base in these underserved areas. The moratorium is a major obstacle to opening stores in underserved communities.
Bailey did say that despite the challenges, due to California’s size and diverse population, new stores are entering the marketplace. With the rise of the Latino population in Southern California has come an increased number of independent ethnic-based stores. Other ethnic-centered stores are experiencing similar growth as well.
Grocers will continue to seek dense, growing population areas when considering building a supermarket. Access and traffic flow are two key components to a successful store operation. And, Bailey, added a competitive retail environment is very important along with a strong local government and civic pride.
The theme for the conference was “Food for thought: Current Food Trends and Policies in the Golden State,” and was hosted by the Sacramento State Center for California Studies and held in Sacramento.
Other panel speakers included Cory Clift, Executive Director, Freedom Farms; Clare Fox, Strategic Initiatives Coordinator, Los Angeles Food Policy Council; and Charles L. Mason, Jr., President and CEO, Ubuntu Green.