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New faces bode well for retail

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For many executives, this year’s National Association of Chain Drug Stores Annual Meeting could just as easily be labeled a weeklong First-Timers Reception.

MMR OpinionSo dramatic has been the turnover of staffers at some of America’s leading mass retailers that many of the attendees at the 2017 event in Scottsdale, Ariz., have never been to an NACDS conference before, while many others have never found themselves in such exalted company. While many industry people lament the high employee turnover of late as a major industry concern, others — many of them more enlightened — believe the new faces bode well for an industry that has lost some luster in recent times.

The loss of sheen is hardly in dispute. Performance in recent months has been disappointing, especially the 2016 Christmas selling season, which saw many mass retailers turn in sales that were, at best, lackluster. This is particularly true among the nation’s leading drug chains, several of which posted sales increases in the low single digits.

Perhaps this merely signals a pause in the chain drug industry’s climb to once-unimaginable sales levels, plateaus that once seemed unattainable. Consider: Two drug chains now record annual volume in excess of $70 billion. Not all that long ago, annual sales of even $1 billion were viewed, correctly, as a milestone. Today, billion-dollar drug chains no longer warrant a second glance.

Many reasons for the momentary malaise have been advanced, too many to reiterate here. Foremost among them, of course, is the steady rise of online sales, a phenomenon that traditional mass retailers have been unable to halt, or even influence. Surely, they are trying — but the lure of shopping from home is proving powerful, too powerful for conventional brick-and-mortar retailers to influence as yet.

But enough about the past and present. The future, insist brick-and-mortar retailers, will be different. If so, that difference starts now, with the presence of new faces and new job descriptions. Name the retailer, and it boasts new people at jobs that were, until recently, securely held by longtime employees. This is particularly true among the industry’s merchants, where key merchandising positions are now held by staffers who, in many cases, were with other companies as recently as a year ago.

For the supplier community, this represents a unique opportunity, the chance to air some long-held complaints that have, until now, largely fallen on deaf ears. These old gripes, many of which center on retailers’ unwillingness to act quickly and decisively on opportunities to take on or add merchandise, have kicked around for so long as to become boring refrains. That, however, doesn’t negate their timeliness or importance. Retailers have become accustomed to acting late, or never, on opportunities that, if taken up earlier, would have added store visits, sales and earnings when they were most needed.

Now these laments can be channeled into newer, perhaps more receptive ears — and maybe to merchants more anxious to seize an opportunity.

For their part, these new retail faces are confronted with a similar opportunity, that of giving suppliers some new options in product placement, merchandising and promotional opportunities. Suppliers complain that they have grumbled too long on deaf retailer ears and say the retailers have not given them enough attention, especially when issues have become tense. So this is a time of recalibration, of second chances, of rebuilding old alliances and forging new ones. It’s a new starting date for those in the mass retail community that are looking for a new starting date, and for those that are willing to overlook old grievances, real or perceived.

Against that background, the 2017 Annual Meeting should be viewed as potentially the most important in some time. No longer a chance to build on past successes, it is an opportunity to reverse ailing fortunes, repair rocky relationships and rekindle a positive retailer-supplier relationship, one that propelled growth and assured success in years past.

In short, time for a new ­beginning.


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