TORONTO (FNS) -- Competition from nonsupermarket retailers has caused a steady decline in Canadian grocery sales at the supermarket level, according to David Williams, executive vice president of George Weston Ltd., the franchiser that owns Loblaw Cos. here. Speaking at the Canadian Federation of Independent Grocers' 35th annual Grocery Showcase here, Williams told retailers that although grocery sales increased by 4% overall, sales through conventional grocery stores dropped by 3.2% -- and independents seem to be taking the biggest hit.
Williams said alternate-format stores, such as drug stores, warehouse clubs, discount stores and supercenters, can often afford to sell grocery items at a loss to generate store traffic.
In addition, Williams said, restaurants are taking away business from conventional supermarkets as their takeout sales increase.
Williams said more than 51% of all food consumed in the United States is out of the home. In Canada, the amount of meals eaten at restaurants rose from 36% in 1995 to 38% in 1996.
"I could scare the life out of you by telling you what the future holds, or I could make you feel good by telling you not to worry about a thing because you're doing fine," Williams said. "Neither is correct or honest."
Williams advised retailers to "respect the competition.
"You should understand your competition but never fear your competition," he said. "Put your investment behind what you do well and don't be scared off by the fact that someone is larger than you. If you stand for something in your community, I don't care how big they are, you can hold your own against them.
"But to do that, you need focus and you have to be obsessed with your customers. You have to know their needs. If you look after your customers' needs, they will inevitably look after you."
Williams encouraged grocers to get out on the floor and find out from customers what needs improving in the store. He linked good customer relations with good employee relations, suggesting that employees get involved in community projects.
The single most important element in survival for independent grocers, he told his listeners, is personnel.
"You can create family relationships," he said. "It's a tough job to get chain stores to win that kind of loyalty, but it's [an independent's] greatest strength."