How Rouses Markets keeps growing despite supply chain headaches

Family-owned Rouses Markets this week announced it purchased a shopping center in Picayune, Mississippi, where it plans to open a new supermarket in 2024.

The Gulf Coast grocer, which currently operates 64 stores in Louisiana, Mississippi and Alabama, has several more locations in the pipeline. But Charles Merrell, Rouses’ VP of corporate development, told WGB that supply chain disruptions are causing a “logistics nightmare” as the company tries to open new markets.

Ten- to 12-week lead times are now nine to 12 months, Merrell said. It used to take 10 weeks to receive refrigerated equipment, now it’s taking nearly a year because of shortages of the necessary electric components, he said.

What’s more, construction costs are up about 30%, he added.

“It’s a logistics nightmare,” Merrell said. “We’ve had to delay some projects to meet the supply chain and we are ordering and getting further ahead of our new stores to meet the supply chain.”

Rouses currently has three supermarkets under construction, in Houma, Baton Rouge and Lafayette, Louisiana.

It’s expected that the Houma store will be the first of the bunch to open, likely this summer, Merrell said.

Rouses opened its first store in 1960 and now employs more than 7,000 people.

Ground will be broken for the new Rouses this spring at the River Ridge Shopping Center in Picayune, Mississippi. The 40,000-square-foot store will anchor one end of the mall, which also includes a CVS and other retailers. It will be Rouses’ fourth location in Mississippi and will employ approximately 200 people, the company said.

“Picayune’s a great site,” Merrell said, adding that the area has lacked a grocery store since one retailer left the area in 2017. “We’re excited to go to Picayune. We believe it’s an underserved community. Over the years, we’ve had a large amount of calls to bring a store there.”

He said Rouses intends to invest about $10 million in the shopping center site. The store there will be modeled on an updated Rouses prototype that first debuted in 2014 but has been evolving ever since.

To cope with supply chain challenges while still growing has taken plenty of advance planning, he said. Remodels of older stores do not begin until all equipment is in place.

“We’re ordering it earlier and taking it onsite and managing it,” Merrell said. “Now the lead times are so far out and so inconsistent, we’ve had to push projects back.”