Grocery retail has always been competitive. But in addition to being more competitive than ever, it's growing increasingly uncertain day by day. So far this year, we've seen many major omnichannel ramp-ups, a number of mergers and acquisitions, and several traditional regionals file for bankruptcy.
So given all the fast change, what concerns are on the minds of today's top grocers? And what does 2018 hold for grocery retail? Here's what's on the minds of four seasoned grocery executives.
What issue related to doing business keeps you up at night?
What's your outlook for traditional grocers in the coming year?
Edward “Trey” Basha III, CEO, Bashas’
During the last couple of years, the grocery industry has been challenged with commodity deflation. For example, meat and dairy deflation, while a benefit to the customer, challenges margin expectations. Across the entire store, traditional grocers are experiencing enhanced margin compression, and I anticipate this trend continuing.
In addition to traditional competition, more and more non-grocery retailers are adding non-foods and even food products that customers previously went to the grocery store to purchase. From drugstores to hardware stores, all retail operators are competing for an additional sale.
Online shopping will also continue to grow in the coming year. With online delivery of shelf-stable and non-food items becoming more of the norm, especially for time-pressed families, organizations need to grow these areas with the demand. This connects with the critical element of continuing to invest in remodels and technology, with the end goal of providing a better shopping environment for our customers and a better work environment for our members/employees.
Randy Edeker, CEO, Hy-Vee
In a retail atmosphere that’s focused on convenience and the individual consumer experience, my thoughts are on meeting personal shopping needs and on-the-go habits while providing an overall great customer service experience for everyone who walks through the door at Hy-Vee.
While we can’t be all things to all people, we try to meet as many customer demands as possible. I spend a lot of time thinking about trends and looking for feedback on how we can meet customers’ diverse needs while maintaining quality in everything we do.
Judy Spires, CEO, Kings Food Markets
Due to the current landscape, many traditional retailers will be forced to deal with their excess supply of retail space. We have seen this occurring in shopping malls as well as big box and department stores. More than 250 department stores closed over the last year, and a number of smaller stores have downsized.
We are fortunate that our Kings and Balducci’s format is supported and showcased on a smaller, non-traditional, niche footprint. Today, we know our shoppers not only value convenience, but also how we help them ensure chef-prepared, high-quality food regardless of their busy schedule by offering meal solutions – either ready to eat, or ready to cook, and perfect for any time of the week.
Retailers need to take calculated risks, stay flexible and implement attractive, experience-driven solutions quickly. Organizations must also know their strengths and continue to audit customers’ needs to stay relevant. We continue to keep our finger on the pulse of industry trends and create a food destination that fits our ever-changing customer.
Thoughts on ...
"Grocery retailers must continue to vie for business from the customer who shops at a multiple stores each week to find their favorite products or take advantage of special deals. That’s where offering the convenience of on-the-go meal options, a wide selection of products at great prices, and a robust customer loyalty program will continue to be key. Grocery retailers that want to remain relevant must also figure out their ecommerce system as more and more competitors enter the market." - Randy Edeker, CEO, Hy-Vee
Competing in One of America’s Toughest Markets (Chicago)
“We have remodeled 140 of our locations; we have 187 throughout the area; we’ve opened up 12 new stores; we have two more new stores coming, another five sites I’m working on, and we continue to expand. There’s a huge opportunity in this area to fill in needs.
"We’re going to be the retailer of choice as we have been for the 118 years we’ve been here. We’re going to be built for the future. As a guy like me retires, these two (Marketing and Merchandising VP Anthony Suggs and Marketing Director Tina Browen) can continue running this, and I’ll be proudly looking on this for many years to come on what we built as a team.” – Doug Cygan, president, Jewel-Osco
“Innovation takes calculated risk and commitment. Having knowledgeable and passionate members on the front lines is a key component to ensuring success with something new, while also supporting traditional needs at store level. An idea can be great in theory, but the key to success is how smoothly that innovation can be executed in store. We do everything we can to ensure smooth transitions and easy adjustments for both our members (employees) and for our customers.” – Edward “Trey” Basha III, CEO, Bashas’
making ecommerce truly shopper-focused
“It’s been phenomenal for us. We’ve got 11 stores that we pick out of right now. That business has skyrocketed. Kind of what we anticipated. We do have drive-up and go at all those locations, and we’re going to expand that this summer, so you can place an order at your house and pick up your order at any one of 167 stores. People want every facet – some days they want to pick up; other days they want it delivered.” – Doug Cygan, president, Jewel-Osco