IGA CEO John Ross addressing attendees at the recent IGA Global Rally in San Diego
At the recent IGA Global Rally in San Diego, CEO John Ross spoke about some of the changes that have occurred since he came on board about 18 months ago and his vision for the future of the organization.
He noted that if IGA stores were taken collectively, they would likely be the fastest-growing independent grocery chain, as well as one of the larger grocery chains operating in the United States -- all of this in the face of news that 350 food retail locations have closed, and the dire state of brick-and-mortar retail in general (if you listen to mainstream news outlets).
Ross sees this situation more of a retail opportunity, however, rather than a retail apocalypse. Progressive Grocer had the opportunity for a one-on-one chat with Ross about his views of the independent grocery sector.
Progressive Grocer: You are about 18 months in as CEO of IGA (Independent Grocers Alliance). What do you see ahead for independent grocers?
John Ross: I come from the equity world here, and I look at it that if I ran a fund, where I would want to invest? Say I'm going to invest in retail, what country would be geographically where I want to put my money, and what industry would I want? I'd want a place where the population for that product is growing. So, Western Europe and a lot of areas in the world where you have contraction of population, that's not a good place to go. And then I'd want an industry that has wide product appeal, so everyone eats -- that's good. I wouldn't want to be in the automobile industry right now because you got fewer 16-year-olds getting their driver's license, and the whole value proposition for your product is in peril. But then you look at the grocery industry, and it's exactly the opposite. People express themselves through the food they eat. They're more passionate about the relationship between food and wellness in a way that they've never been before. And you've got this sort of rabid desire to provide for your family in a way that is more than just the cheapest, fastest way to get something on the table.
So I look at that and okay, the U.S. is growing in total population. People are more passionate about my product, what kind of store do they want? So we ask them what they want. Everyone wants value for their money; that's never going to change. But then their list grows -- they want healthy, fresh options and they believe that the word "local" means healthier than something that I would get from a national chain. Boy, is that good for us.
Progressive Grocer: How does this influence IGA and the stores operating in the system?
Ross: Our new tagline is “Local Equals Fresh.” The way the commercial goes is local retailers working with local family farmers because local equals fresh. That's bringing two groups together that already do what they do -- we just haven’t told their story in an overt way. I get down to IGA and I go, okay, bigger audience, more passion about what I do, the store they want is what we already do, and they believe I'm fresher and more local than my competitor, [so] let's rock on that, which means I'm very encouraged.
Progressive Grocer: Being somewhat still new to the position, what has surprised you the most about the independent grocery industry?
Ross: Going to visit the stores, every chain's got stores that are great, and you have some stores that need some work, and you've got everybody in the big middle. So let's go see the stores that are positively comping, and the ones that are growing and buying more chains -- let's go see what they're doing. What you find is, independents are unique. And if what you find is what they're doing is unique -- it can't be replicated because of their neighborhood or their situation or whatever -- that would be discouraging, although they are unique and each entrepreneur has their own personality about how they go to market, whatever they're passionate about. But what I walked away with is the behaviors that they're doing, they are completely replicable.
Retail is interesting; it's rarely one big thing. Where you win in retail is often a combination of a lot of tactics that you play. And you're just constantly playing these new tactics, and some work and some don't, but that's how you grow your business. I go out and visit the stores and go, “What’s driving sales?” It’s craft beer or sushi, or it doesn't really matter. They’ve been really curious and they’re out there running these plays in categories where they think they can win, and the shoppers are responding.
So I walk away from that, and then I go to another store that might be a little bit struggling. I walk in and they say, “Well, sales are off a couple of percent.” So I’ll ask, “Why?” If the answer is competition, I’ll ask what they’ve done differently. If there’s a pause, I know there’s an opportunity. I'm seeing that this can be done, hundreds of stores are doing this, right? So what surprised me is how much of I think the answer to the puzzle is already in the chain. The problem is, it's trapped in that store.
We need to take those insights and those ideas, we need to make them portable, turn them in to a system, put them in our training library, so that anyone can copy and paste those things into their business. And then we need to give them some new tools: digital marketing and digital advertising. IGA’s role is us stacking up these services. The value proposition grows.
Progressive Grocer: You are bullish on the future of the independent grocery industry, but where do you see some speed bumps that they need to watch for?
Ross: Your customer service is never as good as you think it is. It’s easy to get trapped, to be lulled into thinking you’re great. Because the people you see in your store all the time, they tell you you're great. But you never talk to the people who don’t shop here anymore. And you're not talking to the people who should be shopping but don’t know you. And so we've got to do a better job of bringing full voice to the customer.
Understand your neighborhood. If you've been in the same location for 30 years, your impression, your instinct about who you serve, may be based on the shoppers who’re in your store, not the shoppers who should be. Your community can change really fast in a way that may surprise you, and we need to make sure that data is available so you’re not storytelling.
Diversity of retail. Retailers, if we're going to survive, we have to be the paragon of diversity, because we serve the community that's willing to shop us, right? Better know who they are and what they’re about and whether the heritage has -- whether it's an ethnic or a geographic issue, or it’s age.
The last thing that we all face is talent and accessibility to the labor pool. This is a long-term problem. We’ve got to be an attractive place for people that want to work and create an environment where people want to stay.