Labor Issues Top Grocer Concerns but Others Not Far Behind: Annual Report
(Editors' Note: This is part four of a five-part series.)
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Let’s edit an old saying to fit the current context: The more some things change, the more other things stay the same.
To elaborate: Advancements in technology and evolution in the way consumers shop continue to disrupt all levels of retailing. But amid the rapid change, grocery executives responding to Progressive Grocer’s annual survey say that the issue keeping them up most at night is labor — namely, the recruitment, retention, diversity and training of their workforces.
It’s the second year in a row that talent issues have topped this list after rising from second place in 2017 to first in 2018. About three-quarters of all respondents named talent as their No. 1 concern, evenly shared among larger and smaller operators.
“We try to help everybody to grow and be successful, and get them to love coming to work,” remarked Tom Heinen, co-president of Ohio-based Heinen’s Grocery Stores, during a c-suite panel discussion earlier this year at the Food Marketing Institute (FMI) Midwinter Executive Conference.
And, as Jessica Adelman, group VP for corporate affairs at the Cincinnati-based Kroger Co., told PG when interviewed in late 2018: “I think this war for talent is certainly a big one. We know that we have to earn everybody’s commitment every day. As a leadership team, we try to foster the right culture, the right environment, and be relevant to the workforce.”
A big part of that will involve doing a better job selling a career in grocery retail to the next generation moving their way through college. Cindy Sorensen, founder and president of The Grocery Group, a Minneapolis-based industry consultancy, urges retailers to establish a presence on college campuses to attract talent.
Further, while only about a third of U.S. workers feel engaged at their jobs, according to a 2017 Gallup study cited by Sorensen during the National Grocers Association (NGA) annual show this past February, onboarding programs have been shown to improve retention and employee performance.
“This generation wants to feel like they have a friend at work,” Sorensen said. “Create a culture of opportunity. Lay out a career path for them that’s performance-bound.”
The second most-important issue overall our respondents named was benefits, up from No. 7 a year ago, though it’s clearly more of a concern for smaller operators than larger ones. Likely reasons? A Democratic majority in the U.S. House of Representatives and a growing nationwide movement to increase the minimum wage.
Competitive threats is in third place, where it slid from its No. 2 spot a year ago. Clearly this continues to be a leading concern among traditional retailers grappling with cross-channel competition, overstored markets, growth among hard discounters like Aldi and Lidl, and the acceleration of ecommerce — which leads right into top concern No. 4: keeping up with advancements in technology.
As it continues to be stressed by industry analysts and observers, grocery retailing is no longer just about selling food — it’s about selling experience and information. Consumers want more individualized approaches, said Gary Hawkins, CEO of Walnut, Calif.-based Center for Advancing Retail & Technology (CART), during February’s NGA Show. Hawkins urged the industry to focus more on personalized marketing, supported by technology.
“Think of it from a customer’s perspective,” he said. “Technology today is driving change. We’re at a point of inflection.”
The online share of total grocery spending is growing faster than expected, noted Steve Bishop, managing partner and co-founder of Barrington, Ill.-based Brick Meets Click.
“The online portion of the business is where growth is happening,” Bishop said at the NGA Show. “That’s why new competitive entrants are coming into the space. … [R]etailers need to consider how to make it seamless for shoppers to move between online and in-store.”
From a seamless omnichannel shopping experience, to delivery solutions like Kroger’s trials of autonomous vehicles and partnership with U.K.-based Ocado, to Albertsons’ investments in cloud-based platforms, to engagement with shoppers via social media and targeted personalized offers, continued attention on all levels will be paramount to ensuring long-term growth and success.