Keep The Playing Field Level

For independent operators, value pricing pressure must be fair and legal.

This continues to be an especially sensitive time for millions of American food shoppers, who are suffering from wounded psyches and broken household budgets. Not knowing if they'll be able to hold onto their homes, jobs or retirement savings, people have frozen their spending impulses — even in supermarkets, where staples abound and luxuries still cost far less than other aspects of the "good life" that many shoppers miss.

Today's consumer is shopping for price in an unprecedented way, according to the National Grocers Association 2010 Consumer Panel Survey. The survey found that 51 percent of consumers said that price is "very important" in the selection of where they spend most of their money earmarked for food, and 45 percent of the remaining consumers regard price as "somewhat important." Additionally, much has been written about the pressure on manufacturers to deliver more value. The independent sector wants to ensure that we receive the same treatment as other retailers that sell the same products, regardless of channel and class of trade, so consumers can continue to benefit from a diverse marketplace.

For over 70 years, the Robinson-Patman Act has served as a code of conduct and provided a set of guidelines for marketplace behavior. As such, American consumers have access to a more diverse marketplace, enabling them to choose among competing brands, store formats, service levels and a steady flow of new products in virtually every category they shop. Because of Robinson-Patman, American consumers have benefited from the "Five P's" available to retailers: pricing, packaging, promotion, product availability and payment terms.

Robinson-Patman issues have long been the subject of discussion of fairness between retailers and wholesalers, and their suppliers. The act has historically enabled suppliers to say no to any unfair, unjustified and illegal demands of power buyers for various forms of competitive advantages over their rivals. Robinson-Patman has been a leveling force for the playing field on which retailers, wholesalers and suppliers compete and consumers benefit.

In our current environment, with price being a highly important component in the consumer value proposition, and marketing differentiation strategies becoming more customized between suppliers and their customers, we should remember that a fair and level playing field benefits consumers. The principles of Robinson-Patman are more important than ever before in today's tough economic climate.

Frank DiPasquale is the EVP of the National Grocers Association.