By Jim Dudlicek / NGA Director, Communications and External Affairs
Trying to predict the future is fraught with peril. Trying to say with certainty what the grocery industry will look like years from now – with economic, technological, social and other factors all playing a role – is darn near impossible. To be sure, at the end of 2019, no one could have predicted the impact of events that were to play out just a few months later.
But the industry leaders who shared their insights at NGA’s recent Executive Conference and Public Policy Summit, with their years of experience in every level of the business, are probably more adept than most at anticipating what’s next on the horizon. These grocery veterans have ridden waves, weathered storms and most everything in between.
So, their thoughts about where we are and where we might be going next provide learned guidance to those bracing to meet the future head-on.
An inflationary economy that continues to challenge consumers as well as grocers and their trading partners may have driven sales in dollar terms but has driven volume down and has shoppers trading down or going without certain items. “Customers are spending the same amount of money per basket – they’re just buying less,” observed Enid Barillas, CEO of AM Inc. (Econo Health Path Markets).
They’re also spreading their grocery dollar over a larger number of sellers within and beyond the grocery channel, putting more pressure on traditional grocers, especially independents, to demonstrate their value. “Step back and look and who you are as a brand in your market. How do you differentiate what you deliver to your community?” said Dennis Host, SVP of marketing and communications at Coborn’s Inc.
That includes appealing to the changing habits of shoppers, especially younger generations. “Are you ready to engage these consumers? You do great things, but you don’t do a good enough job talking about it,” said Jena Sowers, CEO of Alliance Retail Group.
Caroline Catoe, president of ECRS, notes, “Gen Z doesn’t want to shop the way we have for the past 100 years. … Figure out where you’re behind and figure out how to move forward.”
This generation represents the next generation of industry leaders as well as consumers, so companies must be sensitive to what young employees are looking for in a career, from flexible hours to advancement opportunities to a company’s ESG mission. “If you’re not willing to be flexible, you’re missing out on a lot of good candidates,” asserted Rob Marsh, COO of Pyramid Foods.
Flexibility should not be a problem for independents – it’s what got them through the pandemic and it’s what has helped them thrive amid intense competition, from national chains to big-box, mass, drug and dollar retailers. But the economy has brought additional challenges.
“Be resilient and adaptable; prepare to be nimble,” advised Casey Fannon, president and CEO of National Cooperative Bank. And Wakefern CEO Mike Stigers cautioned, “How do we look at things differently today for tomorrow? We absolutely have to be ready for what we don’t know.”
That has to include how retailers and suppliers work together. “We need to work closer with the vendor community and with the retailer to better understand their needs,” said Ray Sprinkle, president and CEO of URM Stores.
What is grocery retailing going to look like years from now?
Despite the acceleration of online shopping over the past three years, the pandemic ultimately demonstrated that people really do want to get out of the house. As North State Grocery Executive Director Richie Morgan said, “The basics are still going to be important. … Provide a place that people want to be, for gathering and human interaction.”
Many, like Kurt Schertle, COO of Weis Markets, are “bullish on our future. We’ve earned a lot of trust over the last few years … We’re changing to adapt to the newer consumer.”
Erin Horvath, COO of UNFI, advised, “Be flexible for the customer, for what they want their experience to be. Know their expectations and be able to match that.”
And Tim Lowe, president of Lowes Foods, declared, “America needs what you have. Brick and mortar’s not dead, [but] technology’s not going away. Be in the right place at the right time. … You can’t be everything to everyone, but you’d better be something to somebody.”