Council President: Season Of Change Afoot Across Maryland Grocery Market
As excerpted from The Shelby Report:
The Maryland grocery market is in a season of change, according to Cailey Locklair, president of the Maryland Food Industry Council.
“New stores have opened, but many have closed this year as well,” said Locklair, who also serves as president of the Maryland Retailers Alliance and the Maryland Association of Chain Drug Stores.
“Food is a necessity category in retail, but like many states, there are many pressures such as tariffs, thin margins, regulatory costs and inflation that may result in additional consolidation.”
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Locklair noted that Maryland’s unemployment rate is around 3.6 percent, a low figure that reflects “strong labor demand and a relatively stable population that provides a solid consumer base and workforce foundation.
“However, Maryland’s close proximity to the nation’s capital means the state’s economy is heavily influenced by federal employment and contracting activity, leaving it vulnerable to shifts in the federal workforce and related budget changes which have yet to be fully realized.”
Last year, the state was able to close a $3.3 billion budget deficit through new taxes, one-time transfers and budget cuts, yet projections for fiscal 2027 are indicating a potential $1.4 billion shortfall, she said.
“This growing structural gap is deeply concerning to the business community, as the prospect of tax increases looms large in upcoming policy discussions,” Locklair said.
The recent federal shutdown, finally resolved in mid-November, as well as continuing uncertainty around SNAP funding, “have recently caused sharp declines in sales for many grocers, particularly those operating in underserved communities across the state,” she said.
On hopefully a more positive note, Maryland’s new organized retail crime law took effect this October, “finally enabling law enforcement to aggregate thefts across jurisdictions, define ORC in statute and collect critical data to better combat these crimes,” Locklair said. Maryland is not unlike a lot of markets nationwide, with labor costs continuing to be a top concern for food retailers, who operate on profit margins of about 1 to 3 percent.
“When consumers spend less, whether due to inflation, reduced SNAP benefits or rising import costs, it triggers a ripple effect throughout the economy: purchasing power declines, store viability weakens, sales drop and retailers are forced to make difficult operational decisions, including cutting labor or reducing inventory,” she noted.
For the upcoming legislative session, Locklair said her food council members are keeping a close eye on a number of issues, including beer and wine sales in food retail stores, tax increases, bans and warning labeling, a bottle tax and labor mandates.
