The Food Marketing Institute recently issued the 70th installment in its annual The Food Retailing Industry Speaks series. Based on responses from retailers that together operate more than 36,000 stores, the report provides a window on what the leaders of the nation’s grocery companies think about the challenges they currently face and prospects for the future.
By and large, the executives are cautiously optimistic, expressing confidence in the trade class’ ability to adapt and thrive in a rapidly changing marketplace, one that includes an unprecedented number of competitors, both brick-and-mortar stores and e-commerce companies. Buoyed by a solid economy — which was characterized as a positive factor by 54% of respondents to the FMI survey — supermarket operators are meeting and enhancing important financial and operational objectives, and exhibiting greater dexterity in fine-tuning their business model to stay in sync with evolving consumer preferences and competitive pressures.
Health and wellness is one area of opportunity for grocers cited in the report. With a large share of the nation’s supermarkets equipped with a prescription counter, the trade class is well positioned to capitalize on the nexus between nutrition and health. Consumers’ growing focus on their own well-being and that of family members was seen as a plus for grocers by 82% of executives, while 76% viewed the trend toward leveraging food to deal with health problems as positive.
Industry leaders indicated that, in some respects at least, health and wellness will receive more attention. Asked if they expect the category to see greater SKU allocation in the next two years, 73% of them said it will increase and another 23% said it will remain steady. Only 4% anticipate a decline in SKU count.
The picture becomes a little more murky when labor allocation is considered. Asked if the use of nutritionists will increase over the next 24 months, 23% of executives said yes, 35% expected no change, 1% predicted a decline, and 40% said they don’t have a specific plan or employ dietitians. The respective numbers for pharmacists are 5%, 34%, 9% and 52%.
The two sets of figures seem to point in different directions. The potential rewards for retailers that develop compelling health and wellness programs that close the loop between food and medicine are immense. But easy access to pertinent information and meaningful customer interaction are essential if those initiatives are to succeed. If supermarkets want to own that space, it’s time for them to step up and put the people in place to unlock the promise of health and wellness.