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Grocers turn bullish

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MIAMI — It has been 10 years since Leslie Sarasin became president and chief executive officer of the Food Marketing Institute, and during her tenure  the level of confidence among the association’s members has never been higher. Speaking at the FMI Midwinter Executive Conference late last month, she cited the newfound assurance among supermarket operators as grounds for a renaissance in food retailing.

“During these rapidly changing times, the food retail industry is demonstrating the ability to rise to the challenge,” Sarasin said. “Our enhanced ability to adapt, adopt and evolve is preparing us for the next golden era of food retail, doing what we do smarter and better.”

Based on responses to FMI’s annual “Food Industry Speaks” survey, Sarasin noted that the erosion in the market share of traditional supermarkets, which stood at 80% at the beginning of the century, is now stabilizing at around 50%. “I credit that to companies adjusting to the new pace of change, taking a few pages out of their competitors’ playbook, and learning how to play hardball in the new retail style,” she said, adding that supermarket operators, buoyed by a solid 1.7% industrywide same-store sales increase last year, are bullish about the prospect of further gains, even in the face of stiff competition from other brick-and-mortar stores and e-commerce companies.

Sarasin highlighted several areas of opportunity that emerged in the study, including health and wellness and the related trend toward food as medicine, changing patterns of consumption, and the growing demand among shoppers for transparency.

“As consumers request more information about their food purchases than ever before, the lines between suppliers and retailers are getting further blurred,” she said. “Shoppers don’t want to hear a business lesson on how the supply chain allocates roles and responsibilities — they simply think if you sell it, you should know about it.

“The old supply chain, with its individual links, has disappeared. More so, it has fused into a single interwoven fiber optic cable with which collaborators must trust one another with the information within their grasp.”

Consumer demand for safe, high-quality food and beverages that can be traced from farm to table; nutrition facts; other information about how products impact their health; and access to culinary expertise and lifestyle advice all converge at the supermarket. The industry’s position at the nexus of so many forces creates both burdens and opportunities.

“To better serve the consumer, the new retail renaissance calls for increased integration and synchronization between suppliers and retailers,” asserted Sarasin. “We must find the creative means to deal with our differences, seek common ground and stay focused on our shared goal of serving the food-consuming public.

“This is why FMI’s leadership recently changed our bylaws to create a new member category for product suppliers. We want to be the place where retailers of all sizes and styles sit down together with the manufacturer partners and service providers, all at one table, working collaboratively for the good of the larger food industry. I say, ‘we want FMI to be this place,’ but quite honestly, we seek it because changes in the retail landscape, changes in the manufacturing landscape and changes in the association landscape necessitate that such common ground be created.”

FMI chairman Joe Sheridan, who is also president and chief operating officer of Wakefern Food Corp., elaborated on the direction of the association. He enumerated five key elements in FMI’s new strategic plan — providing leadership for the industry as it strives to meet the collective needs of consumers; increasing membership and industry engagement; advocating, collaborating and educating to enable FMI to deliver on its core value proposition; addressing existing and emerging issues that impact food retailing; and bringing innovation to the operating model as a catalyst for  value delivery.

“You’ll be hearing the words advocate, collaborate and educate a lot regarding FMI, because we are asking each FMI function that delivers on the core value proposition to reevaluate their work, their programs and their resources through the criteria of those three lenses,” said Sheridan, who urged his listeners to step up their involvement and go “all in” with the association in 2019. “In other words, they will redouble their efforts ensuring that the time, money and energy they are investing are delivering the maximum meaningful benefit to the membership and the food retail industry, either advocating for us, enhancing collaboration on all levels or educating us.”


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