Hiring is a challenge for independent grocers, says NGA President Greg Ferrara
A final afternoon of educations sessions brought the 2020 NGA Show to a close, with some key takeaways:
The Many Faces of Meal Solutions: Delis, bakery/cafe concepts, franchise locations -- they’re all things that independent operators have explored to drive traffic and sales with prepared foods. Brooks Davis, owner of Mississippi-based Brooks Grocery (one store, a second on the way), in presenting “A Fresh Approach to In-Store Deli,” explained, “We really don’t have a deli -- we have a kitchen, and it works.” As he further explained, that kitchen is little more than repurposed back-of-house space, demonstrating how versatile indie operators can be to achieve success. With a growing list of house-made signature items, Brooks Grocery sells thousands of pounds of fresh salads, take-and-bake casseroles, chicken pot pies, pimento cheese and smoked meats. Meanwhile, in a session on fast-casual dining, Bryan Neiman related how his family’s Michigan-based Neiman’s Family Market launched in-store cafes and scratch-made bagels to great success, while Tom Clark shared the success story of how his Utah-based Clark’s Market incorporated an A&W fast-food franchise with groceries, gas and, of all things, a bowling alley to create a unique and profitable experience.
Turning Over a New Leaf: How can independent retailers leverage the trend in CBD products? Russell Zwanka, author and food marketing professor at New York’s Siena College, offered this eight-step strategy: Apply category management standards, stay on trend (target products that help sleep, anxiety and inflammation), have an expert, offer active and passive point-of-sale material, protect your customers by sourcing organic products, stay informed on products and regulations, select reputable suppliers, and get pharmacists on your side to offer whole-health solutions.
In-House or Outsource for Ecommerce: When it comes to ecommerce, should retailers create their own programs or partner with a third-party service provider? There are pros and cons to each, explained Mark Kemp, IT director for Ohio-based Riesbeck’s Food Markets. Doing it in-house may be cheaper overall, with a keener grasp of the brand message, but the operator may lack experience and the start-up cost might be higher. Outsourcing may offer higher revenue potential and require less staff labor, but may result in less brand consistency, profits and control.
Center Store Ain’t Dead: Center store is not only alive, but it’s actually thriving, and it’s all due to ecommerce, according to Darrren Caudill, senior VP of merchandising and marketing at Cub Foods: “Our average basket is about $40. The basket with delivery is around $90. And the basket with click-and-collect is well over $100. Center store is the foundation of ecommerce because the basket is higher and the center store categories are moving more with ecommerce.” To drive center store growth in-store and online, Caudill says grocers need to have a laser focus on in-stocks, shift with the mix, make the in-store experience a true experience, and make sure center store assortment has the right flow.
More Snacks, Fewer Meals: David Walsh, VP of membership at SNAC International, made a stunning revelation during his session at the NGA Show: 7% of consumers do not eat meals, and that number is growing every year. “On-the-go snacks are replacing meals more than ever before. More than 90% of consumers snack multiple times per day.” Among the trends Walsh discussed: snacks are increasing in every channel, including ecommerce; functional snacks such as high protein, collagen and other wellness attributes are hot; 88% of consumers are willing to pay more for snacks that are perceived as “healthy”; and Gen Z and Millennials are willing to replace meals with snacks more than the other generations.
Dealing With Deep Discounters: Kevin Proctor, EVP and COO at Save-A-Lot Food Stores, spent 16 years learning how to be a great discounter at Lidl, which is why he’s now spearheading a transformation at his current post. But his panel at the NGA Show focused on strategies for how grocers can compete with discounters. As ecommerce keeps expanding in the grocery retail space, Proctor says, success requires a new point of differentiation. Those include variety (big-box retailers), experience (high-end grocers) or value (discount grocers). And discount grocers are winning the differentiation battle by not just providing great value but also delivering on variety and experience. Many deep discounters, including Aldi, Lidl and Dollar General, offer value through extensive private label, experience through a smaller store that is easier to shop, and variety through exclusive brands.
Selling Produce Online: “Yes, consumers are very OK with ordering bananas, avocados and other produce online,” declared Ashley Nickle, editor of Produce Retailer, presenting exclusive research showing that more than 60% of consumers include produce in their online grocery orders. Top items ordered: apples, bananas, potatoes, strawberries, packaged salad, onions, carrots, tomatoes, oranges, grapes and avocados. Albertsons and Raleys are among the retailers for whom produce is a popular ecommerce category, Nickle noted, suggesting that grocers “looking to do produce right” online should be listening to customer feedback from grocery orders and allow customers to include comments in online orders such as “green banana, please” or “ripe avocado only.”
For live show coverage, visit PG at Progressivegrocer.com and on Twitter at @pgrocer, @jimdudlicek and @acostag