Wisconsin retailers hope for regulatory relief

Economic Trends 2017

Wisconsin’s retail businesses are a key component of the state’s economy. Consumers buy groceries, fuel, apparel, hammer and nails, pizzas, tennis shoes and more, driving sales tax collections to the state and providing wages and benefits to the hundreds of thousands of employees in the retail sector.

Retail businesses, both small and large, work to provide their customers with the highest quality products at the most competitive prices. One-on-one customer service plays a huge role in building customer loyalty and repeat business.

But it’s not that easy.

Scholz
Scholz

Like many business sectors in Wisconsin, the retail component deals with local, state and federal regulations that drive up the cost of compliance and require more time from employers to deal with regulatory burdens rather than making their businesses flourish.

The 2016 election results hopefully will provide some regulatory relief at the state and federal level. Based on President Donald Trump’s statements to date, we expect that Trump will get out his pen and undo most, if not all, of former President Barack Obama’s overreaching executive orders – starting with the overtime pay rule. This should be a no-brainer and a statement of how Obama’s eight-year string of mandates will be dealt with by the new president. Next, working with House Speaker Paul Ryan, Trump should tackle as many tax reform measures as he can.

Wisconsin’s main street and retail businesses have many challenges. For example, the robust grocery industry in Wisconsin is known for delivering some of the lowest and most competitive prices for the products it offers. Food deflation is 2016’s biggest economic challenge for grocery stores, as it tightens razor thin margins in the industry.

Nevertheless, supermarkets and grocery stores (members of the Wisconsin Grocers Association) in Wisconsin generate more than $10 billion in sales, pay more than $825 million in wages and produce more than $700 million in local, state and federal taxes. As more stores come into the state, these numbers are pushed higher and higher.

Another face of retail includes 270,200 restaurant and foodservice jobs in Wisconsin, which equals 10 percent of employment in the state. Restaurant sales in Wisconsin are projected to be $8.4 billion in 2016, a growth of 3.6 percent over 2015. Over the next 10 years, the number of restaurant and foodservice jobs in Wisconsin is expected to grow by 9.6 percent, for a total of 296,200.

Wisconsin’s petroleum marketers and convenience store owners are independent, family-owned businesses that, in many cases, date back generations and operate nearly 3,000 stores across the state employing more than 50,000 people. Wisconsin convenience stores accounted for more than $11 billion in sales in 2015.

While most everyone is pleased that Wisconsin’s unemployment rate is 4.1 percent, the problem retailers have is that they can’t find enough people to fill good-paying jobs. Many retailers have starting wage rates above the federal minimum wage, competing with each other to fill their workforce needs.

CON-COM-Picknsave
A Milwaukee Pick ‘n Save store.

Wisconsin should have the right climate to streamline regulations and find ways to continue to make state agencies partners in building a better economy, rather than competitors and regulatory adversaries.

The Wisconsin Legislature is well-positioned to respond positively to the needs of the retail community to grow their businesses and workforce. Federalizing the Family and Medical Leave Act, maintaining the Unfair Sales Act and repealing the personal property tax are great starting points as we head into this 2017-’18 legislative session.

The state of the retail industry is good and relatively stable, but there is not a single operator who takes that position for granted. A quick downturn in the economy, unexpected increases in costs, a continued workforce drought and no regulatory relief could easily soften this sector of Wisconsin’s economy.

-Brandon Scholz is president and chief executive officer of The Wisconsin Grocers Association, which represents nearly 1,000 independent grocers, retail grocery chain stores, warehouses and distributors, convenience stores, food brokers and suppliers.

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