Last week's issue of SN featured an extensive retrospective of what happened during the fateful year of 2000. This week's issue moves from the look back to the look forward, as you'll see by reading the "Forward March" news feature on Page 1.
In that feature, SN asks several top-level industry executives, representing various food-distribution segments, to take a look at what this year may hold. They speak of how this may be the year that some of the benefits of technology are translated into superior consumer service, how personnel matters could alter the future, how sales may trend, what's ahead on the consolidation front, and what to expect from outside challenges such as alternate formats and channel blurring.
Here's a quick look at opinions expressed on some of those matters, and an observation or two on whether they may be portentous or not. To find out who's saying what, take a look at the news feature itself.
Sales: Many trends are important, but few are as important as trying to divine which way sales may go. One executive told SN that there's good reason to think sales will increase this year. "We've seen some signs of [sales increases]. Winter weather is [colder and] more like we're used to seeing. That means a boost in in-home consumption and less restaurant [dining]." This seems to be true. There's anecdotal evidence all over that suggests in-home food preparation is picking back up. It's not just the weather. It's the economy too. Let's hope this continues, although not at the expense of a totally sinking economy. This may prove to be one of the more important aspects of business to keep an eye on this year. There's also a news story on Page 1 about sales trends.
Consolidation: The industry is doubtless fated to continue to combine on both the retail and vendor sides. But certainly the tempo and style of activity will change: "There will be additional consolidation, though perhaps not at the pace we've seen in previous years," said one executive. "[Vendor] consolidation affects retailers because combinations are never as smooth as expected," said another. Both these observations are on the money and, unfortunately, the landscape may be just as significantly altered this year by business failures as it was in recent years by business combinations.
Technology: Some executives are of the opinion this could be the year that investments in technology translate into competitive advantage: "In past years, we as an industry spent a lot of money on the technical side of the business. I think some of that will have to go toward serving customers, [delivering] better service than any of your competitors," said one. This prediction probably is destined to be true, either because assets are redeployed toward customer service or because technology starts to make a difference. Retailers without some sort of point of distinction may find this a tough year.
Employment: The food-distribution industry employs huge numbers of people and has historically been able to tolerate a high turn rate because of a constant flood of new applicants. This is no longer true, and hasn't been for a while now. "One of the most crucial challenges is recruiting new associates. With a booming economy and low unemployment, recruiting at store and corporate level [is difficult]. Retaining qualified associates is a more critical challenge," said an executive. Actually, it may prove to be the case this year that difficulties surrounding attracting and retaining employees will be ameliorated to some degree. Again, the reason is that the economy is cooling a bit. And again, let's hope the economy doesn't retract to the point that the benefits of a slightly less torrid pace are outweighed by the cooling itself. Happy New Year.
