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.
“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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When it comes to merchandising health and wellness foods, the majority (59 percent) of surveyed consumers want the products shelved alongside like foods. Furthermore, 55 percent of respondents indicated nutritional ratings on packaging or shelf are extremely or very important.
“Health and wellness items integrated in the store invites trial,” said Frank Puleo, vice president retail marketing and services with C&S Wholesale Grocers Inc., Keene, New Hampshire. “Shoppers can compare labels and make better-for-you choices.”
Puleo also believes it is important for independents to emphasize what they do best in order to compete against national chains and on-line shopping.
“Only in a store can you smell fresh baked bread,” he said. “You need to offer value. I want to hear that a customer drove past my competitors to visit my store because of the value I offer, rather than they shop my store because it is convenient.”
In-store fresh-cut produce has become common, but providing custom cuts from a “vegetable butcher” is a new value-added service. Customers get their produce cut on demand and may observe the process.
Recognizing that everyone cannot always make it to a store, the chain recently added quick-preparation meal kits to its online shopping home-delivery service. Each kit includes fresh ingredients to create a complete, chef-inspired meal at home.
“In an extremely competitive industry, independents are finding innovative ways to differentiate themselves in the marketplace and are doing so with much success,” Larkin said. “With their strong community roots and the agility to respond quickly to consumer demand, independent grocers are on the forefront of meeting customer demand, particularly in areas such as local and fresh.”