Twenty-five years ago, the prospects of independent supermarkets looked rosy, at least to Forbes magazine.
"In an era when the mom-and-pop store has been vanishing in most businesses, independent supermarkets have more than held their own against chain competition," a 1977 article declared.
However, by the end of the 1990s, the outlook for independents was decidedly grim. During that decade, the number of independent stores declined nearly 20% to about 11,200, and their market share fell off from 23.4% in 1989 to 15.5% in 1999, according to a study cited by the International Council of Shopping Centers, New York. (On a more hopeful note, the same study showed that the number of independents had declined only slightly, to 11,157, by 2001, which market share had increased, slightly, to 16.1%.)
What has kept those 11,000 or so independents open for business and, in many cases, thriving?
Tom Zaucha, president and chief executive officer, National Grocers Association, Arlington, Va., told SN successful independents, whether they are single-store operators or regional chains with hundreds of units, tend to have five attributes in common:
They need to become the top local brand. "Their name has to become synonymous with price competition, product quality and variety, incredible service, a terrific shopping environment and cleanliness," said Zaucha.
They should be "willing and aggressive in reinvesting in their business," he noted.
They require "the flexibility to anticipate change and meet it," Zaucha observed. "If there's new competition, don't wait until it arrives. If there's a new format, respond to it ahead of time."
They have to develop strong community ties. "To say it is one thing, to advertise it is one thing, but to live it day as part of your day-to-day culture is something else," he said.
They have "the will to win," he added. "You've got to be willing to say I'm here not just to survive, but to grow."
Ron Pearson, chairman and CEO of W. Des Moines, Iowa-based Hy-Vee, an employee-owned regional chain operating 200-plus stores in seven Midwestern states, told SN, "The independents and regionals all stem out of an entrepreneurial spirit. At the independents, it's the proprietors who have devoted themselves to customer care and giving them exactly what they need for their neighborhood.
"The surviving regionals have done a better job of identifying lifestyle changes over these last 50 years than any one of the national chains has. The regionals have been quicker to provide customers with the new things they want in a supermarket -- the conveniences, the fresh, the services. All the things that are now prevalent, the leading edge has come from those very efficient regionals."
Norman Mayne, president and CEO, Dorothy Lane Markets, a three-store chain in Dayton, Ohio, that was founded in 1948 by his father, has seen many trends in the supermarket industry in the past 50 years. "You can talk about Wal-Mart and scanning and prepared foods," he told SN.
But the reasons an operator succeeds remain the same -- and quite simple. "To me, the fundamentals haven't changed in 50 years," Mayne said. "You need to have great employee and customer relations."