business news in context, analysis with attitude

The Food Marketing Institute (FMI) is out with its Grocery Industry Economic Impact analysis, which it says “outlines the food retail industry’s annual economic impact” and points out that “food retailers have a significant economic impact on federal and state economies, employing roughly 4.8 million workers and producing more than $363 billion in economic activity in 2016. Food retailers also paid nearly $168 billion in wages to associates with diverse skill sets throughout the operations of a grocery store.”

At the same time - and this is timely since the Trump administration and the US Congress have pledged to take up tax reform - “the analysis demonstrates that the food retail industry faces a disproportionately heavy tax burden. The $153 billion the industry pays in taxes makes it exceedingly difficult for food retailers to hire new employees, raise wages for current workers, and meet the demands of the new consumer and marketplace.  For each person food retailers employ, they pay nearly $32,000 in taxes.

“Low profit margins compound the burden, as the average food retailer only nets one percent (1%) in profit after accounting for taxes, overhead and other costs, a consistent trend for the last three decades. Like all businesses, food retailers appreciate that they have a responsibility to supply government revenue and support public projects, from roads and bridges to law enforcement. But a tax system that picks winners and losers puts undue pressure on the nations grocery stores.”
KC's View:
I think the economic contributions part of this study is a story that food retailers ought to be telling early and often … because individual stores probably want to avoid bragging, perhaps there is a way that FMI can do some sort of advertising campaign that will put these contributions into some sort of context. McDonald’s has done a similar sort of campaign, describing itself as being a place where many Americans have their first job; there’s no reason that the supermarket industry can’t make the same sort of claims.