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Adapting to change, grocers are ‘cautiously optimistic’

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PHOENIX — After weathering the storm unleashed by the advent of grocery e-commerce and the attendant predictions about the demise of brick-and-mortar stores, supermarket operators have regained their equilibrium and are charting a new course in the omnichannel world. The change in attitude was evident at the annual Midwinter Executive Conference convened by the industry’s premier trade association, a group whose evolution reflects that of the sector it serves.

The event, which was held late last month at the JW Marriott resort here, was the backdrop for the formal debut of the Food Marketing Institute’s rebranding as “FMI — The Food Industry Association,” a change intended to convey the organization’s aim to represent the food marketplace in its entirety.

“The food industry, and the way it operates, in fact, every link in the supply chain — from the grower, the manufacturer, the supplier and the retailer to the consumer — is undergoing significant changes,” said FMI president and chief executive officer Leslie Sarasin. “The food itself, the way we grow it, move it, package it, sell it and consume it, are all changing.

“And as a reflection of the industry we represent, the association landscape is changing too. All these shifts in circumstance and culture combined together to provide FMI with an amazing opportunity to evaluate itself — to scrutinize where we truly provide value and determine exactly who and what we want to be in this brave new food world.”

Despite the seismic shifts in recent years, the industry is, in Sarasin’s words, “getting its feet back under it,” an assertion supported by results from FMI’s annual “The Food Retail Industry Speaks” report: More than 50% of respondents to the latest survey expressed strong confidence that their comparable-store sales will rise; 31% anticipate higher net earnings; and 39% project higher online sales.

“The food industry’s collective leaders are proving they can do what the industry has always done — adapt,” she said. “Consequently, the industry leadership is being cautiously optimistic and feeling a bit more adventurous about future possibilities.

“The encouraging financial forecasts are an indication that industry leaders are acclimating to this environment of change, challenge and new competition — and feeling more confident they are choosing the appropriate paths forward for their teams.”

The renewed optimism isn’t cause for complacency. Myriad challenges exist at a time when more retailers than ever sell food and beverages; people’s shopping and consumption patterns are changing; and digital technology has opened up unprecedented ways to interact with consumers. Sarasin singled out four of the most pressing issues facing FMI’s members — mastering the omnichannel supply chain; marketing in a digital world; emerging technology; and the need to be increasingly shopper-centric.

“Your customers are searching for trusted partners to help them execute their families’ food strategies,” she said. “Consumers who can take their business anywhere are looking for the food marketplace that will continually woo them, gain their trust and prove to be trusted partners.”

One FMI member who has succeeded in winning the allegiance of customers is Oscar Gonzalez, copresident of Northgate Gonzalez Market, a family-owned supermarket chain that operates 41 stores in Southern California. Founded four decades ago by Mexican emigrants, the company caters to the Hispanic community, but in recent years has adapted to an increasingly multicultural market.

“Our business goal has always been to expand our grocery brand into key markets, and be able to offer local customers a fresh, new, exciting and authentic shopping experience with a beautiful and innovative format — all with customer service that exceeds everyone’s expectations,” said Gonzalez, who was chairman of the 2020 Midwinter Conference. “Throughout the years, we have stayed true to the core essence of our brand.”

The underlying continuity doesn’t imply resistance to change. The stores, which Gonzalez said some customers have likened to a Mexican Disneyland, embrace the diversity of Southern California. To cite just one example, the company has a Japanese Peruvian chief who makes fusion sushi for the stores.

“Our customers, the marketplace and our associates will continue to change and evolve,” said Gonzalez, “but I am confident we will remain focused on our roots as a Hispanic market for everyone. In this thriving new marketplace, we must make it personal — for our associates and our customers. I challenge each and every one of you to image, envision and deliver on the experiences that are most authentic to you, to your brands and to your business.”


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