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INDEPENDENTS REPORT: Exchange of views

As 2004 came to a close, I found myself remembering a dear friend and legendary grocer who touched the lives of so many in our industry. Al Lees, a single-store operator from Westport, Mass., passed away in July at the age of 75.

Missed by his family, friends, devoted customers, and members of the trade associations that he so proudly served, Lees proved throughout his 50-plus years in the business that successful people never stop learning, and that a supermarket doesn't have to be among the biggest to be one of the best.

I last interviewed Lees, who was often described by his peers as "the ageless wonder," one year ago when I was writing a cover story, "Independent thinkers," which described how some creative independents, large and small, use their innovation and imagination to compete. Featured were Price Chopper's Neil Golub; IGA retailers Rudy Dory and Kurt Rodhe; the Lawrence brothers of Sweetwater, Texas; Gary Hawkins; Jack Clemens; and some others.

Ironically, it was the perhaps the smallest retailer of the bunch who imparted the most powerful message. When asked how best to compete with Bentonville and other national chains, Lees said: "When elephants battle, the grass gets trampled. In this business you have to decide what you want to be in the eyes of the consumer. You must project an image that appeals to a certain group, and you must aggressively go after that group."

Extremely focused on his customers but also well versed in retail technology, Lees managed to make operating a successful supermarket look simple. "Never lose sight of the basics," he said. "As independents we must continually learn from others and invest in our people."

Convinced that independents could gain competitive ground in the marketplace through education, technology, and, of course, people, Lees devoted much time and energy to industry trade associations. He was in particular a source of inspiration for Michael Sansolo, s.v.p. of the Food Marketing Institute and president of its independent operators division, and Frank DiPasquale, e.v.p. of the National Grocers Association.

Those two trade association execs shared their views with me on what 2005 has in store for independents, and also on how their respective organizations will assist their retail members, most of which, like Lees Market, operate family-owned businesses. Much like "the ageless wonder," they were candid, passionate, and eager to express their thoughts.

"Today we stress to independents the importance of differentiation, but we must be clear what that means," says DiPasquale. "Five years ago format and design were key. Today, however, because of the proliferation of retail formats that exists, our emphasis has shifted to retail execution and providing solutions to customers."

He continues: "Excellence in execution can occur in many ways -- through customer service, innovation, consumer relations technology such as kiosks, loyalty cards, self-checkouts, cart buddy programs, etc. Customer service isn't just providing baggers at the front end. Today, for example, it may entail a store investing in nutrition, health centers, and staffing an in-store health care professional.

"It's a given today that customer service is linked to food safety and providing a safe and secure environment," he adds.

The softer side

A 24-year veteran of the food industry, DiPasquale says he believes format proliferation in no way negates the importance of a good location, a documented strategic plan, superior human resource efforts, and a retailer's value proposition.

"All of these are prerequisites to simply unlocking the front doors every day," he notes. "We're witnessing enormous success with NGA members who are focusing on the softer attributes of the business, such as trust and respect."

Therein lies the opportunity for independents, DiPasquale suggests. "The management attention, ability to react quickly, and leadership that are so much a part of the independently owned supermarket are a source of innovation and change."

He commends merchants such as Ukrop's, Wegmans, and Coburn's for "redefining the supermarket not as a place to buy groceries, but as a wonderful food experience for both their associates and customers.

"Again, in my view, it's not so much about format and design today. It's a 'people thing.' We must tell our people every single day how important they are to our business. In return they'll permeate a culture within the store and prove to be the major point of differentiation."

That culture must keep pace with a diversifying market, stresses DiPasquale. "Independents must embrace diversity in order to attract the next generation of consumers. Our country's changing demographics are a major force in the food industry, and each store must reflect the ethnicity and culture of its individual community."

FMI's Michael Sansolo concurred that stores in 2005 must reflect their communities more than ever. "During a recent trip to Omaha, I visited a Target store and purchased a few items. I was amazed to be presented with a receipt that was printed in both English and Spanish," he recounts.

The challenge for independents today lies in understanding their local communities and having their ears open to what's changing in those communities. "To seize the opportunities that exist, independents must be really willing to listen to the 'new language' of their communities," counsels Sansolo.

"Additionally, wholesalers must be able to work quickly with retailers to get them the products, many of which are unusual, that they need. Independents must find a way to be special in the eyes of the consumer. Consider H-E-B, which was recently featured in an article in "The Wall Street Journal." Operating over 300 stores, the company has become 'the Texas chain' that understands emerging ethnic groups. And in New York [state], there's Wegmans, who gets out there and talks to the people in each of its communities. These are companies that truly understand the needs of the local population."

Optimistic as to the future of independent grocers, Sansolo nonetheless cautions, "There is no breathing room in the industry. In my view, it's not all about Wal-Mart -- it's about everybody's response to Wal-Mart. Retailers such as Jungle Jim's or Norman Mayne's Dorothy Lane Markets, which operate defined, distinct stores and know exactly what their customers want, will prevail."

The alternative is bleak. "The marketplace does not reward mediocrity. What happened yesterday may have been good, but we must determine how things are going to be better today," Sansolo concludes.

I'm sure our friend Al Lees would agree.

Independent Retailing Editor Jane Olszeski Tortola can be reached at [email protected].
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