The United States has seen an increase in competition in the food retail market in recent years.
In Arizona, retail competition is continuing to grow thanks to the vast amount of space, low prices for land, and proximity to the U.S.-Mexico border.
“Our proximity to the border is a tremendous advantage for them because they’re all coming by here anyway,” Jaime Chamberlain, president at Chamberlain Distribution Inc., said. “There are so many things that we can take advantage of here in Arizona. We have low corporate taxes, we have very good schools, we’re very, very attractive for businesses to come this way.”
Four of the top ten supermarket companies in 2018 — Kroger Co., Albertsons, Walmart Neighborhood Market, and Whole Foods — have locations in Arizona.
Kroger and Albertsons were also in the top ten retail companies of 2018 along with Walmart, Amazon, Costco, Home Depot, Walgreens, CVS, Target, and Lowe’s — all of which also have locations in the Grand Canyon State.
According to Blue Book Services, a produce industry credit rating and marketing information company, “the retail environment in Arizona is conducive to the fresh produce industry and continues to attract new entrants.”
Arizona saw this last year when European supermarket and global retail seller ALDI announced plans to open a warehouse in Arizona.
“Anytime that any of the chain stores put distribution centers anywhere across the United States or Canada it is a tremendous boom for jobs,” Chamberlain said. “You may have 500,000 [people] work in one facility 24 hours a day and distributing products in a radius anywhere between 500 and 750 miles away from their distribution center. It’s an incredible boom and advantage to [the] state and area they’re at.”
According to global advisory firm Duff & Phelps, the competition in produce retail was created by consumers distancing themselves from the “traditional supermarket model” and wanting more “intimate and innovative” shopping experiences.
“Millennials are driving changes in the country’s eating behaviors with their approach to food choice and preparation,” Duff & Phelps wrote, because while younger adults are considered the biggest users of restaurants they were hit the hardest by unemployment in the Great Recession and pulled back on going out but still wanted the benefits restaurants provide like freshness, speed and uniqueness.
“I think a lot more consumers in North America are becoming much more educated about where their food comes from and why they like their foods,” said Chamberlain. “It’s an exciting time to be in the produce business…[and] in the United States we still have some of the lowest food costs that there are in the entire world.”