RAN May 2023

2023 Grocery Industry Update

By Bryan Wachter

AS WE GEAR UP FOR THE SUMMER SEASON, many families are feeling the financial impact of rising grocery prices. Memorial Day typically marks the start of the outdoor gathering and barbecue season, and with more trips to the grocery store, families are feeling the pinch. While it may seem like there’s some relief on the horizon with grocery inflation leveling off, unfortunately, it won’t happen immediately, and consumers will still be feeling the impact of higher prices throughout the summer.

According to the industry publication

Grocery Dive, many of our grocery staples saw a decrease in their Consumer Price Index (CPI) in March, with eggs down nearly 11 percent. Most other grocery items were down zero to two percent. Some of this reduction, especially in eggs, came as the supply chain caught up from the Avian Flu outbreak earlier

this year. Unfortunately, some of the cost increases felt by consumers over the past year are going to be harder to reverse. The US Government Accountability Office recently reported that a contributing factor to rising costs of goods comes from higher labor and transportation costs.

Higher prices are not deterring customers from food at home purchases. In their recently released 2023 U.S. Grocery Shopper Trends Report, The Food Industry Association found consumers are purchasing the same number of food items and are, instead, looking for deals across multiple stores, up to 5.2

from 4.9 different stores, or choosing private label items over name brand.

What is most concerning for retailers as this season of high-cost groceries continues is public perception of corporate profits. In February the Dunnhumby Consumer Trends Tracker found that consumers overestimated inflation by double in late 2022, 24.3 percent versus the actual 12 percent. In addition, consumers also overestimated grocery retailers’ profits at 35.2 percent, compared to an actual rate closer to 2.5 percent.

Groceries aside, we’re

Bryan Wachter

2023 Nevada Pharmacist Day at the Capitol

OMAY 1ST, 2023, PHARMACY TEAM

members from across the state gathered in Carson City to advocate for the pharmacy profession at the Nevada Legislature. The day was dedicated

to spreading awareness about the pharmacy industry through individual meetings with Senators and Assembly Members to educate them about the critical role the pharmacy industry plays in promoting community

health. The event concluded with a reception at the Great Basin Brewing Company, that was cosponsored by the Retail Association of Nevada, with special guests Senator Pat Spearman and Senator Jeff Stone. The reception was an excellent opportunity for the attendees to network and socialize after a long day of advocating.

2023 Grocery Industry Update

beginning to see indications of slowing consumer spending on non-food items going into the summer months. Consumer confidence dipped to a nine-month low in April, and consumer spending was flat in February and again in March. All indications show interest rates will remain high at least through the end of 2023, and whispers of a looming recession,

starting as early as this year, are becoming more common.

Despite these national economic concerns, Nevada’s revenue projections are still strong. During their May 1st meeting, Nevada’s Economic Forum, after reviewing state revenue projections, voted to increase the state budget by $251 million to a total of $11.6 billion

after tax credits for the biennium, citing the ongoing going strength of Nevada’s gaming and live entertainment taxes. Sales tax, the state’s largest revenue stream, was less optimistic, with increases of just under 2% per year.

This is an uncertain time for consumers and retailers alike. It is evident that we are approaching an economic event, but at this point it is impossible

Overall, the event was a great success and helped to spread awareness about the critical role that pharmacy professionals play in healthcare. 

Continued from page 1

to predict at this point if the Federal Reserve will be successful in the slow glide to a stable economy. What does appear evident is consumer spending is continuing to set new holiday records going into the summer months, even if that means consumers are getting less for the dollars they are spending.

Reforming PBMs in Nevada

RAN HAS BEEN VOCAL AND RELENTLESS IN DISCUSSIONS

with legislators during the session regarding the need to reform Prescription Benefit Managers (PBM) and their impact on the cost of drugs to their constituents in Nevada. However, the only legislator that has wanted to champion the issue to help their constituents is Sarah Peters, and she was unable to get the support of her committee members

Congress and Nevada need to shine some sunlight on PBMs’ (or Pharmacy Benefit Companies) opaque and lopsided practices that have created this quagmire in the prescription drug supply chain that has serious upstream and

By Liz MacMenamin

influence, dictating which drugs are prescribed to patients, which pharmacies patients can use, and how much patients pay at the pharmacy counter — especially since the three (3) largest PBMs control more than 80% of the prescription drug market and are vertically integrated with some of the nation’s biggest health plans.

There should be bipartisan review of pharmacy benefit managers’ (PBM) tactics that harm patients and the pharmacies that serve them. These tactics are owned by your health insurers, who reap all the benefits of the rebates and “price spreading” that they do to manipulate the healthcare system.

Policymakers need to go further by stopping

Liz MacMenamin

pharmacies, and restricting access to medicines that are right for them.

Pharmaceutical benefit manipulation can no longer be tolerated, and policymakers should demand accountability, transparency, and fairness in how PBMs operate and impact patients and the pharmacy teams who serve them.

These tactics fuel the middlemen’s profits (health insurers) at the expense of patients, communities, employers, taxpayers, and pharmacies.

for them, and jeopardize the pharmacies on which patients rely.

These reforms are imperative to shed light on how we, as patients in our state and nationwide, have been pawns in this high stake game that yields these entities over $350 BILLION a year.

It is not too late to take action! Call your state legislator and your congress representative and ask them why there has been no regulatory oversight of these culprits. The manufacturers are regulated, the pharmacies are regulated, but the PBM have been allowed the operated with no oversight and no “sunshine” on their practices. Your legislators need to hear from you as the patient who had to decide if you take your maintenance medication or buy groceries.

downstream effects and consequences for patients, taxpayers, employers and last but certainly not least community pharmacies. PBMs have enormous

the manipulation by pharmacy benefit manager (PBM) middlemen that is increasing patients’ medication costs, limiting patients’ choice of

For too long, this manipulation has been allowed to force patients and others to pay more for their medicines, limit patients’ access to their pharmacist, restrict patients’ access to the medicines right

As we conclude the 2023 Nevada Legislative Session, I am optimistic that some legislators are beginning to question these predatory practices. I look forward to continuing to work with legislators in the interim with the goal of growing support for reforms in 2025.

(See related poster on page 8)

“Policymakers need to go further by stopping the manipulation by pharmacy benefit manager (PBM) middlemen that is increasing patients’ medication costs, limiting patients’ choice of pharmacies, and restricting access to medicines that are right for them.”

NRF Report Shows Organized Retail Crime a Growing Threat for U.S. Retailers

ORGANIZED RETAIL CRIME (ORC) IS A SERIOUS and growing problem for the retail industry in the United States. A recent report released by the National Retail Federation in partnership with K2 Integrity highlights the persistent and evolving threat posed by ORC as well as the implications of ORC for retailers, law enforcement, and our communities.

RAN Staff Report

Firstly, the report highlights the growing scope and complexity of ORC in the United States. ORC is characterized by centralized coordination and division of labor across various stages of the crime cycle, including theft, resale, and money laundering. ORC groups range in size and sophistication, from informal groups of individuals to complex enterprises with established organizational

hierarchies. ORC groups are discerning in their selection of targets, primarily favoring large national and big-box retailers and cargo shipments. Everyday consumer goods are the primary target of ORC groups, with electronic goods being the most frequently targeted items among ORC groups that conducted cargo theft. The report also notes that ORC groups rely on advance planning to ensure the

success of their theft operations.

Secondly, the report highlights the financial costs of ORC for the retail industry and the wider public sector. ORC groups cause billions of dollars in financial loss for retailers and the communities they serve. These financial costs are just the tip of the iceberg, as ORC also presents potential public health and security risks to consumers and communities. The report notes that the effects of ORC extend beyond direct financial costs and warns that ORC has a parasitic relationship to the economy and society.

Thirdly, the report identifies critical gaps in the current understanding of ORC.

There are significant deficiencies in the availability of consistent and consolidated data regarding ORC across national, state, and local authorities, as well as the retail industry. The lack of quality data has stymied efforts to raise public

Political Corner: Running for Office in 2024

AS THE 2023 NEVADA LEGISLATIVE SESSION

draws to a close, it’s time to start looking ahead to the 2024 election. For retail business leaders, getting involved in politics and government is more important now than ever before. Running for office is a big decision for anyone, but it can be an especially important decision for retail

RAN Staff Report

business leaders. Here are two reasons why you should consider running for office:

You have a unique perspective

As a retail business leader, you have a unique perspective on the challenges facing your community. You understand the impact that local and state policies can have on businesses and the economy. By running for office, you can bring your expertise to the table and help shape policies

that will support the growth of small businesses and promote economic development in your community. You have the skills and experience needed to be an effective public servant.

Protect your business interests

Without a voice in government, retail businesses risk being left out of important discussions that affect their bottom line and the future of their industry.

Organized Retail Crime

awareness about the scale and consequences of ORC. The fragmented and disorganized state of data on ORC presents difficulties for building a nuanced understanding of ORC’s national and regional prevalence and operational trends. The lack of standard centralized information on ORC from the retail industry presents difficulties for retailers in effectively addressing ORC. The implications of ORC are more significant for retailers, law enforcement, and society. ORC poses a significant financial threat to retailers, causing billions of dollars in financial losses annually.

The effects of ORC also extend beyond direct financial costs to public health and security risks to consumers and communities. The potential involvement of traditional transnational organized crime groups or transnational terrorist organizations in ORC adds a layer of complexity to the threat posed by ORC.

For law enforcement, the fragmented and disorganized state of data on ORC presents difficulties in effectively addressing ORC. The lack of quality data has stymied efforts to raise public awareness about the scale and consequences of ORC,

By getting involved in politics and campaigns, business leaders can ensure that their interests are being represented and protected. By running for office, you can be the voice of your industry and work to create policies that benefit businesses in your community.

Your RAN Team can help support you and point you in the right direction. Contact us at info@rannv.org.

Continued from previous page

and efforts to standardize and increase data collection on ORC would help build understanding of key information gaps about ORC.

In conclusion, the report released by the National Retail Federation in partnership with K2 Integrity highlights the persistent and growing threat posed by ORC to the retail industry in the United States. The growing scope and complexity of ORC present significant financial costs for retailers and potential public health and security risks to consumers and communities. The lack of quality data on ORC presents difficulties

for retailers and law enforcement in effectively addressing ORC. Efforts to standardize and increase data collection on ORC would help build understanding of key information gaps about ORC, and concerted action is necessary to disrupt the trends of ORC. Retailers and law enforcement must work together to address ORC to keep our stores and communities safe.

View the full report at https:// nrf.com/research/ organized-retail-crimeassessment-persistentand-growing-threat

MILLENNIAL HOMEOWNERSHIP SURGES IN LAS VEGAS, 2ND LARGEST JUMP IN THE US

A recent study by RentCafe revealed that millennials in the U.S. are increasingly becoming homeowners instead of renters, with a 64 percent increase in homeownership within the past five years. Las Vegas, Nevada has seen a significant surge in millennial homeownership, with a 158 percent increase in the past five years, second only to Richmond, Virginia, with 234 percent, among the top 50 metropolitan areas. However, despite the increase, millennials in Las Vegas still lag behind older generations in terms of homeownership. Economic factors such as increased median income and financial help from parents or family have contributed to this trend, although high housing costs and other roadblocks remain challenges for millennials pursuing homeownership.

The Nevada Independent NEVADA STATE WORKER BONUS BILL SIGNED BY GOVERNOR

Governor Joe Lombardo has signed Assembly Bill 268 into law, which provides retention bonuses of $500 each

Nevada News

to executive branch, judicial department, and legislative staff in Nevada. The bonuses are to be paid twice a year. The bill was signed in the presence of Department of Transportation workers who had helped during the severe winter weather in the state. The funds for the bonuses, which are part of Lombardo’s efforts to increase state worker pay, come from a budget item of $25 million in the state’s general fund.

Las Vegas Review-Journal

EXECUTIVE ORDER ON NEVADA’S ENERGY PRIORITIES SIGNED BY

LOMBARDO

Nevada Governor Joe Lombardo has signed an executive order establishing the state’s energy priorities. The order aims to develop and maintain a diverse energy supply and balanced approach to electric and natural gas energy supply and transportation fuels. It includes a range of resources such as solar, wind, geothermal, hydropower, natural gas, hydrogen, and energy storage. The order also requires state energy policies to ensure all Nevada consumers and businesses have a diverse range of energy options available to them, including renewable

energy options. The Director of the Governor’s Office of Energy expressed support for the energy policy objectives outlined in the order.

Fox 5 Las Vegas

BILLS ‘MODERNIZING’ NEVADA’S TAX STRUCTURE PUSHED BY DEMOCRATIC LAWMAKERS

Nevada Senator Dina Neal has proposed SB396, a bill to impose a sales tax on digital goods sold in the state to capture changes in the technological landscape. The bill is expected to generate $50 million in tax revenue annually and apply to retailers with over $100,000 in gross annual revenue or more than 200 transactions annually. Another bill, AB421, proposes an excise tax on commercial consumer data collection, but faces opposition from major business groups. Meanwhile, ACR7 has been introduced to study potential new tax streams such as wealth taxes. While the proposed tax reforms have gained Democratic support, Republican Governor Joe Lombardo has pledged not to raise taxes, making the likelihood of their approval this year doubtful.

The Nevada Independent

TAX SQUEEZE BEING FELT BY NEVADA MARIJUANA CULTIVATORS

Cannabis growers in Nevada are struggling with hefty taxes and fees, with many fearing they may have to shut down their businesses. The state imposes a 15% wholesale tax on marijuana sold by cultivators to dispensaries and production companies. However, rather than being based on the price of the product sold to dispensaries, the tax is based on a perpound rate set by the state. As a result, smaller independent growers often pay an effective tax rate on sales closer to 25-30%. This is leading to concerns that growers are being squeezed by taxes and fees to a point where it no longer makes sense to continue investing their own money in the business.

Las Vegas Review-Journal

MORE WATER CUTS A POSSIBILITY FOR SOUTHERN NEVADA UNDER PROPOSED PLAN

The US Department of the Interior’s Bureau of Reclamation has released a draft Supplemental Environmental Impact Statement proposing three options to address

CONSUMERS REDUCE SPENDING ON BIG-TICKET ITEMS

March retail sales fell more than expected by 1% from February, with consumers cutting back on big-ticket items like automobiles, appliances, furniture, and electronics. General merchandise and department stores also saw 3% and 2.5% drops in spending respectively, compared to February. However, compared to March 2022, retail sales were up 2.9% at $691.7 billion. The decline in spending is attributed to slowing inflation, as increased prices have been driving growth in the retail sector for the past year. Consumers remain pricesensitive, with high-income and low-income shoppers exhibiting different spending patterns. Despite the March weakness, the National Retail Federation remains optimistic about consumer spending, expecting positive sales growth in 2023, excluding automobile dealers, gasoline stations, and restaurants from the calculations.

Forbes

AMAZON SOARS AS RESEARCH FIRM PREDICTS STRONG RETAIL SALES

Amazon’s stock surged to its highest level in

over two months after a research firm predicted that the company’s North American retail sales would surpass Wall Street’s estimates. Despite economic uncertainty impacting consumer spending, e-commerce is expected to continue gaining market share, with Amazon seen as a leader in the space. In addition to positive sales predictions, Amazon recently won a lawsuit accusing it of antitrust violations. The company’s stock has rebounded over 30% from its December low but remains down 42% from its record high in July 2021.

Reuters

$2.2 BILLION INVESTED BY IKEA FOR US GROWTH

Ikea on Thursday disclosed it would spend more than $2.2 billion over the following three years to support its omnichannel expansion strategy in the United States. According to a press release from the firm, Ikea will utilize the investment, which is its largest over the previous 40 years of operations in the U.S., to expand its network of fulfillment centers and create new stores. The retailer for home goods announced plans to add eight new stores, nine plan-and-order locations, and 900 pickup

locations. According to the company’s release, the investments would lead to the creation of almost 2,000 jobs.

Retail Dive

BANANAS REIGN SUPREME AS TOPSELLING GROCERY ITEM IN U.S. AND CANADA, ACCORDING TO INSTACART DATA

According to Instacart’s shopping data, bananas are the top-selling grocery item in the US and Canada, with over 1 billion bananas delivered by the company to date. Instacart’s trends expert also revealed regional differences in banana purchases, with the Midwest and neighboring states having a higher share of purchases compared to southern states and Hawaii. Instacart provided a state-bystate map showing the percentage of orders that included bananas in 2022, with Iowa, South Dakota, and Minnesota having the highest share, and Hawaii, Louisiana, and Alaska having the lowest. Bananas appeared in one in four carts and their popularity is expected to remain consistent in the future.

Fox Business

AMAZON EXPLORES NEW GROCERY FORMATS AMID UNCERTAINTY FOR WHOLE FOODS EXPANSION

Amazon’s plans for its Whole Foods grocery chain remain uncertain as it looks to invest in other grocery formats. CEO Andy Jassy hinted at the need for a mass grocery store model in the company’s 2022 annual shareholder letter but suggested that Whole Foods does not serve that purpose. While Whole Foods has a premium niche in the grocery space, it may not serve the mass market in the same way as rivals like Kroger or Albertsons. Amazon has been focusing on technological innovation in grocery, including its Go convenience stores and Amazon Fresh stores. Experts suggest that Amazon may be looking for a new grocery format outside of Whole Foods that has mass appeal, cheaper pricing, and can be automated. Despite this, Whole Foods still serves a need for Amazon by catering to wealthier shoppers and acting as a launch pad for thirdparty brands in the natural organic market space. Recent reports also suggest that Amazon may be planning to build

The Importance of a Healthy Workforce

By Dr. Traci Biondi, Chief Medical Officer, Prominence Health Plan

BEING SUCCESSFUL IN TODAY’S BUSINESS WORLD REQUIRES YOU

to be agile, innovative and strategic. But this is only possible when your employees are happy and healthy.

A healthy workforce can lead to increased employee retention, lower absenteeism, and a reduction of healthcare costs because of fewer sick days.

To create a healthy workforce you should think beyond providing gym memberships and free snacks at work. Being healthy doesn’t just happen; it takes conscious effort. The right approach can help your workers achieve balance between work and personal life while improving their physical, mental, social and spiritual well-being.

So how do you create a healthy workforce? Here

are three things to

focus on.

Create a culture where employees feel safe to speak up

In a healthy workplace, employees feel safe to speak up. They trust their leaders and feel

comfortable discussing sensitive topics like mental health, relationships, and money. They can also openly discuss any issues they may have with their work environment, schedule or workload. An employee-led initiative could be the start of your wellness journey. Wellness initiatives led by employees result in more participation and better engagement. Such initiatives are more likely to be sustained over time, reducing the need for management intervention.

You can create a safe place for employees to discuss sensitive topics through various methods like regular 1:1s, workshops, seminars, and employee surveys.

Provide healthy food in the workplace

The average employee spends about nine hours a day at work. Most organizations provide lunch breaks, but the food options may not be the healthiest. Your employees may be consuming large amounts of salt, sugar, and fat – all of which can lead to health issues down the road. You can provide healthy food options,

either at the workplace or during lunch breaks. The change may seem minor, but it can have a major impact on your employees’ health. You can choose from a variety of affordable, healthy food options and vendors that specialize in catering, including those that can deliver prepackaged meals.

Asking your employees what they need to succeed is an important part of this process.

Offer exercise opportunities for your employees

Exercising is one of the best ways to keep your employees healthy. It can improve sleep, reduce anxiety, increase energy and overall productivity, and improve focus. It can also improve muscle strength and endurance,

improve posture and balance, and even stave off the effects of aging. Exercise options can include a variety of activities such as yoga, running, walking, hiking, swimming, or team sports. Depending on your organization and employees, you may consider setting up an exercise space, providing equipment that can be used in different ways, and offering wellness programs such as yoga or Zumba classes. You can also partner with a gym that’s close to your office.

Bottom line: Help your employees feel safe, included and heard

When people feel safe, included and heard, their wellness improves and so does their overall productivity. When your employees feel that their voices are heard, and that they are supported, they are more likely to stay with the company and perform better. Wellness initiatives can improve employee retention and engagement, and help your company attract top talent. What’s more, these initiatives can help your company position itself as a leader in the industry.

Dr. Traci Biondi

Important Information for SIG Members

NRS requires all existing members of a self-insured group to be notified of all new members. NRNSIG new members are listed below.

Berryfit LLC dba Fitness for 10

What’s Special About the Month of May?

May has 31 days • May is the official month of spring in the Northern Hemisphere • The emerald is the birthstone for May

May Day is a spring festival that is celebrated on May 1st each year

Memorial Day is a federal holiday on the final Monday of May • Mother’s Day is observed on the second Sunday of May • Cinco de Mayo is an annual holiday observed on May 5th

Nevada News

Continued from page 6 future water shortages for Colorado River users, as the drought crisis worsens. Two of the options would cut water usage to ensure enough water flowing to supply hydroelectric power to customers. One of the options calls for water cuts based on the priority of water rights, with major cities such as Los Angeles, Las Vegas and Phoenix taking the vast majority of the cuts. The third option distributes water supply equally across the board. The public has been invited to provide input until May 30, with a final plan expected this summer.

KTNV Las Vegas

NEVADA ALLOCATED MORE THAN $63 MILLION FOR POTABLE WATER

More than $63 million will be given to the

State of Nevada for the provision of potable water throughout the state. The Infrastructure Law, which President Joe Biden signed into law in 2021, provided the funds for this project. The funds will be utilized to upgrade or replace water treatment facilities, tanks, and pipes. Identifying and replacing lead service lines as well as stopping the spread of contaminants like perfluoroalkyl and polyfluoroalkyl compounds into drinking water will be accomplished with the help of funding.

KOLO

TV Reno

HEALING OF PARTY DIVISION DESIRED BY NEW

NEVADA DEMOCRAT LEADER

Nevada Democrats are seeking unity ahead of the 2022 midterm elections, after discord

National News

Continued from page 7 off-site kitchens to better serve Whole Foods’ instore customers who enjoy its food bars.

Modern

Retail

NEW PACKAGING TRENDS DRIVEN BY PANDEMIC E-COMMERCE BOOM

Even if the social exclusion and immuni-

zation drives that characterized the early pandemic have largely faded, certain 2020 shifts, such as the kind of packaging and envelopes that brought online sales to American doorsteps, are still in effect.

According to the Census Bureau, e-commerce sales

between the mainstream and progressive wings of the party led to a loss of the governor’s mansion but gains in legislature seats. Assemblywoman Daniele Monroe-Moreno was selected to lead a unity slate as chair of the state party, and will focus on identifying great candidates and giving them the resources they need to win. Meanwhile, Republican Governor Joe Lombardo called for most of an unprecedented $11 billion in tax revenues to go to public education, but Monroe-Moreno said there are other needs within the state that must be addressed. Lawmakers have until June 5 to craft a new two-year state budget which will take effect July 1.

NEVADA RANKS 5TH IN U.S. FOR HIV CASES

Nevada ranks fifth in the United States for the number of people testing positive for HIV, and a biomedical HIV prevention summit is underway in Las Vegas to help shed light on the growing number of cases. Experts say the number of people annually in southern Nevada who are testing positive is keeping the valley experts on high alert. The summit aims to provide more information about treatment and prevention to local health experts and to help them answer the question of how to end the HIV epidemic in the community. The Center, serving the LGBTQ community of Nevada, has seen four people test positive for HIV in the first two months of this year.

KTNV Las Vegas

increased 43% in 2020. According to Jon Moss, managing director and partner at L.E.K. Consulting, the amount of items traveling through shipment networks had a compound growth rate hovering above 20% in both that year and in 2021. The entire logistical chain for shipping was

affected by how customers choose when they wanted their products to be delivered to their homes. Regular worries about online sales increased in size, therefore dealing with them became a bigger focus of packaging designs.

Retail Dive

KNPR

Shoppers Concerned About Rising Prices Continue to Look for Deals to Stretch Dollars as Weekly Grocery Spend Increases

ASURVEY OF GROCERY SHOPPERS’ SPENDING habits and attitudes

by FMI – The Food Industry Association, conducted by The Hartman Group, reveals that while U.S. shoppers remain cocerned about rising food prices, consumers are less likely to cut back on the number of

The Food Industry Association, April 18, 2023

items they purchase.

Among shoppers who are concerned about rising food prices, only 32% of shoppers in February reported buying fewer items as a strategy to address rising prices, down from 41% in October. Instead, shoppers continue to look for deals across multiple channels – supermarkets,

mass retailers, club stores and online – to mitigate the impact of higher food prices on their budgets.

“Our national survey reveals persistent consumer concern about food and beverage prices, as the weekly spend for groceries increased in late 2022 and early in 2023,” said Leslie G. Sarasin, president and CEO of FMI.

“To address higher prices, shoppers are visiting more stores and seeking deals to stretch their dollars but are now less likely to cut back on the number of items purchased compared to six months or a year ago. This is an opportunity for our industry to continue connecting with shoppers on food-inflationmitigating solutions.”