The Commonalities of Retailing

Grocery operators find themselves facing same struggles as other channels

Published in CSP Daily News

CHICAGO -- What do foodservice, new products and a desire to grow categories that are often overlooked have in common? All three are as important to grocery and other channels of retail as they are to convenience stores. In its final day Tuesday, the FMI Show was rife with familiar refrains that could just as easily have come from a gathering of c-store leaders and those from the lagging grocery channel.

The supermarket channel is not considered the first choice in prepared foods and is considered a convenient alternativeonly when the shopper in already [image-nocss] in the store, said consultant Howard Solganik, president of the Solganik food group, during a session about creating foodservice programs based on dayparts. And yet he noted, Food prepared outside the home is the fastest growing consumer segment across the retail channel.

The Food Marketing Institute's FMI Show ended Tuesday in Chicago.

Likewise, Valerie Skala Walker, vice president of analytic product management for Information Resources Inc., Chicago, stressed the importance of latching onto new products while they're still growing. When a category is growing, that's a great time to advertise a brand to grow share and defend against lower-priced alternatives, she said during an educational session on new product trends.

She said that when products are being introduced based on a societal trend (i.e., a desire for low-carbohydrate products), retailers often lump all products in the category together, helping lead the consumer to the section, but not featuring a particular brand or product that may bring the highest margin and profit.

Meanwhile, Jim Wisner of Wisner Marketing Group, Libertyville, Ill., encouraged retailers not to lose site of smaller, yet no less lucrative categories such as general merchandise during his session titled, HBC and General Merchandise: More Important Than You Think!

Consumers don't really care about channels anymore, he said. There is no best in class. There's no best.'

Wisner used batteries as an example of where retailers are not converting an often-needed product into additional sales. He noted that the three top things that drive battery sales are promotions (43%), price (29%) and display (11%). And yet, he said most grocery retailers are not using batteries to convert shoppers to other product sales.

They'll buy from whoever has the best products, services and deals; the channel doesn't matter, he said. People who are making trips to these stores to buy these items are probably buying another $100 worth of merchandise. And who really wants to lose out on that?