Independent grocers work to set themselves apart from chains, online retailers

by Donna Berry
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 Nielsen
 
LAS VEGAS — Speed to market with new products along with personalized service and signature fresh foods are ways independent supermarket operators set themselves apart from national chains and online shopping. Those were some key takeaways from the National Grocers Association (NGA) Show that took place Feb. 12-15 in Las Vegas.

 

More than 3,400 independent supermarket operators, wholesalers, food industry service suppliers and manufacturers attended the annual event coordinated by the NGA, which represents the retail and wholesale grocers that comprise the independent sector of the food distribution industry.

Independent retailers include privately owned or controlled food retail companies operating a variety of formats. The independent grocery sector accounts for close to 1 percent of the nation’s overall economy and is responsible for generating $131 billion in sales, according to the NGA.

“When Americans think of community, their independent grocer often comes to mind,” said Peter Larkin, president and CEO of the NGA. “If there were one word to describe this past year for NGA it would be growth. Our success throughout the past year tells a great story of a vibrant industry.”

The 2016 Independent Grocers Financial Survey showed that despite a competitive bricks and mortar marketplace, as well as growing on-line shopping platforms, independents grew same-store sales by 2.1 percent in 2015. This was ahead of annualized inflation (1.2 percent) and well ahead of the prior year’s 1.5 percent gains. There was also improvement in gross margins for many departments as well as the total store.

The survey showed that even with consumers increasingly shopping the fresh perimeter of stores, dry grocery remained the largest contributor to 2015 total sales for multiple-store independents at 38.1 percent, which is down four and a half percentage points from 42.6 percent in 2010. The meat and deli departments have shown the most growth, jumping from 17.7 percent and 4.6 percent, respectively, of sales in 2010 to 20.3 percent and 6.6 percent, respectively, in 2015.

 OEP
Mexican meal solutions are one tool for building baskets.
 
The center of the store, where dry grocery is merchandised, requires attention to keep it relevant. During a panel discussion, Beth Busch, senior category development manager with General Mills, Inc., Minneapolis, emphasized that the center store is relevant to today’s consumers, and retailers need to make them realize this by cross merchandising products to offer meal solution ideas and creating quality displays to attract shoppers. Mexican meal solutions are a great way to build baskets, she said.

 

“A strength of independents is to be quick and flexible, with a willingness to try new ideas,” Busch said.

Michael Day, manager of digital commerce and innovation for Wakefern Food Corp., Keasbey, New Jersey, said multiple-store independents like Wakefern will merchandise products differently in its city and suburban locations to better meet the needs of those customers.

“Personalization is key,” he said. “You need to make sure the right message is being served to the customer being served.”

Independent grocers are known for their personal service, said Laurie Rains, group vice president of US retail consumer and shopper analytics with Nielsen, New York. Rains provided a first look into Nielsen’s new research on independent shoppers during a breakfast session. The research identified numerous opportunities for retailers to benefit, including with health and wellness, prepared foods and e-commerce.

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