Grocers and food producers: Increase in minimum wage creates uncertainty for grocers

Holiday sales are just one bellwether for Maine’s grocery stores and supermarkets going into 2019, according to Christine Cummings. “I’m hopeful that momentum from a strong holiday season will continue into 2019,” said the executive director of the Maine Grocers & Food Producers Association, a trade group representing nearly 200 of the state’s grocers, supermarkets, food and beverage producers and related vendors.

It’s too early to know exactly how these businesses fared in the holiday shopping season. And Cummings says changes in state and local laws could affect the industry more seriously than fluctuations in seasonal sales.

On Jan. 1, Maine’s minimum wage increased from $10 an hour to $11, the third increase under a 2016 law enacted by citizens’s referendum. The wage will rise to $12 an hour in 2020, and then will be tied to the annual inflation rate beginning in 2021.

The trade group originally opposed the referendum, but it is now simply concerned that the schedule of wage hikes is too rapid, according to Cummings.

“We’re not trying to repeal the vote,” she says. “It’s just that this is a lot for the business community to swallow, especially in northern Maine.”

The law is already forcing some supermarkets and producers to curtail business hours and shorten employee shifts, Cummings adds, and the latest hike may aggravate the situation. She also says her group’s members are worried about a proposed Portland ordinance that would require businesses in the city to grant paid sick leave for all workers.

“There’s concern that it’s a one-size-fits-all approach,” without flexible requirements to accommodate small businesses, she says. Some members wonder if other communities will follow Portland’s example. “[The proposal] is creating hesitation about 2019, even in other parts of the state.”

In addition, Cummings says the trade association’s members are keeping “a close eye” on local laws that would tax or ban the use of disposable plastic bags in selling food products. For now, 20 municipalities have such laws, and they’re being considered by other cities and towns.

All these factors are making Maine grocers and food producers uncertain about 2019.

“We’re not sure how things are going to shake out,” Cummings says. “The realities still have to hit home. Check back with us in six months.”

As published in MaineBiz, January 7, 2019
by William Hall