One of the most relevant questions to pose in this business environment is the big one about the future of food retailing as we know it: Will the future include stores that offer a wide variety of products to which customers come and pick what they like -- stores as we know them today?
Why ask now if the model of food retailing has the punch it needs to be viable well into the future? The reason is that various delivery models are cropping up that could take much of the shelf-stable side of the business out of the retail context. Additionally, consumers are moving toward demanding finished meals -- instead of meal components -- which is a style of business that just doesn't speak to the core competencies of food retailing as we know it today.
How stores of the future might look and how the dynamics of various industry segments may develop have been the subjects of much industry speculation lately.
At last week's Food Distributors International meeting in Orlando, Fla., members of a panel of industry executives lamented the fact that the retailer-wholesaler relationship hasn't produced the efficiencies needed to keep shoppers in the center store.
Supervalu's Jeff Noddle pointed out that growth by price inflation is no longer a reality and that economic incentives must be handed to consumers to retain their loyalty. That means both low prices and marketing efforts such as a loyalty program. A news article about the FDI event is on Page 1.
But if customers are shying away from the center of the store, where are they going? They are going -- or want to be going -- to specialty perishables and meal providers. That was the topic of a front-page news article in last week's SN, based on a panel discussion at the Food Marketing Institute's MarkeTechnics show in Los Angeles.
Executives on the panel speculated that, in some areas, the current network of supermarkets could be replaced by numerous meal and perishables stores that customers would shop frequently, as they now do convenience stores. Supermarkets more or less like today's retailing model would become much fewer in number. That means shoppers would drive much greater distances and use them as sources for long-term pantry loading.
Indeed, this model of retailing is common in many European cities today simply because big-box stores are discouraged by zoning and by laws that restrict operating hours.
The move to the supermarket as the stock-up source is likely to be prodded into reality by the growth of options consumers will have for sourcing shelf-stable items. Delivery services based on Internet technology continue to spring up, as will services that provide regular delivery of shelf-stable items that are consumed in a predictable fashion.
One more question begs an answer: What business entity will operate the new network of meal-convenience stores? For my money, that's the direction in which many independent operators should move. It's the independents that are nimble enough to make the kind of quick turn that will allow them to move in an entirely new direction such as this, if need be.
And, if this new direction in food retailing is to become reality, it's not too soon for wholesalers to consider how they would supply their independent business partners in this new world of food retailing.