By: PEDRO PENTON TODAY’S GROCER Publisher President, Técnica Business Systems
In the last few years the supermarket industry has experience a flood of new players and existing players that seem to be giving organic growth a “WHOLE” new meaning. The Top 50 Players of the industry represent close to 1 trillion dollars in revenue and employ almost 4 million people. How can you future proof your business with cutting edge concepts that can compete with the likes of companies that specialize in serving the fastest growing population in the country. Health conscious mature middle age are the largest growing group in the Western countries – with females in the workforce now exceeding 65% and with over 55% that earn 50% or more of the entire family’s income.
WE DON’T EAT TOGETHER – In the ladder part of the century there was a paradigm shift in the demographics of our country from families that consumed food at home to families that are now eating out more. USDA Economics indicates that in 2010 over 50% of families consumed food away from the home environment. The lifestyle of preparing food at home has in fact become a special occasion; use to be the reverse getting to go out with the entire family was an extraordinary circumstance. Baby boomers (45+) demand more service and are staying young by being cognizant of what they consume and have a propensity for technology.
With stores that bring the kitchen to you and have the look and feel of a natural habitat, with streamline operations and technology changing the business to an effective well oil machine at a frantic pace, independents today need to embrace the disruption. We have move beyond the time of the “Horseless Carriage”, from the early General Store Open Market concept to plush indoor shops that are more than just a shopping experience. Charging into the food /grocery business almost 25 years ago, Walmart today has revenues that are 3 times that of Kroger, the second largest Food Retailer in the U.S. With “Market Basket Challenge” documentary style TV Commercials and very aggressive low prices, it’s vital that as an independent you have an identity that is consistent and encompasses a solution to the consumer rather than just another product.
Today’s knowledgeable consumer is facing the fight over convenience, they have a comfort with technology and more importantly they are value conscious and are time starved. With the decline of the nuclear family and with over 25% of the US Households being single persons, a retail food store needs to provide additional services that are not necessarily products at aggressive pricing, but rather results that will fulfill the new consumer profile’s way of life.
As retail concepts evolve, retail stores will encompass a wireless concept, there will be mobile everywhere. Your sales versus the labor you spend will need to increase dramatically. The incorporating of smart signage programs and the service levels that will be necessary will need to be powered by technology. Self –service is here to stay and adopting a self-service concept will be necessary to decrease the impact of the labor factor. We have seen retail formats move to neighborhoods and this trend will continue and become more relevant as we move away from a conventional supermarket and to a convenient format that is influence by the food market basket value that is pressured by the consumer’s lifestyle.
What are you doing that makes you different? That is the question that you need to ask yourself, what is it that you do that will draw attention and bring the consumer to your business? Who are you and why should I go to your store – today’s consumer will drive up to 5 miles , pass several retailers to get to a store they feel comfortable in and believe in the products and services that are being provided. Yes the bottom line is being squeezed that is evolution and the retail segment trying to catch up to changing consumer patterns and the new floor plan that with tough competition all looking for a share of the consumer’s stomach; will force the weaker players that take their “eye off the ball” to be shaken out.