Adaptations in Food Retailing
The Nov. 13 issue of SN contained an article about the continuing evolution of store formats. It shows just how far the traditional food retailing business has come in leading the response to shopper needs. [“Multi-Format Options,” Page 1.]
For most of the last 30 years, new formats in food retailing have come from outside traditional food retailing.
- In 1976 when we first started consulting, Aldi imported the limited-assortment store from Germany.
- In the early 1980s, European cash-and-carry operators Makro and Metro demonstrated that shoppers and small-business operators would buy from the same inventory, laying the foundation for the warehouse clubs of today.
- In the late 1980s, Carrefour and Auchan brought huge hypermarkets to the U.S. from France, showing the power of selling food and extended general merchandise under one roof, proving the business case for supercenters.
- During the 1990s, innovative health and natural food retailers such as Whole Foods developed a powerful format that's still growing rapidly, and restaurant operators built the first Eatzies in Dallas.
The article lays out how much of today's innovation in new store formats is being done by current players in food retailing, and there are plenty more beyond those called out in your article, including:
- The Sunflower Markets, the natural food store opened by Supervalu in Chicago and several other markets.
- Sobeys' Urban Markets that make fresh the center of the store.
- Bristol Farms' upscale operation in downtown San Francisco.
And that's only a few examples. While supermarkets don't dominate the food retailing landscape as they did 20 or 30 years ago, supermarket companies are displaying the adaptability that will ensure many of them will be able to grow by serving specific shopper needs and shopping occasions.
The challenge will be to refine business models to generate enough sales and profits. It seems to us that this can be achieved with the thoughtful application of technology, while at the same time improving customer satisfaction. We see technology supporting retailer-led collaboration with suppliers of:
- Perishable products to increase freshness and reduce shrink.
- Packaged products to reduce out-of-stocks and increase inventory turns.
These technologies are available today but are not yet broadly in use. Companies that leverage them fully will be the ones that reap the biggest value from store-format innovation.
Feeding Farmers to Fight Hunger
Thank you for the extensive coverage of the Food For All program in the Nov. 20 issue.
Persistent, chronic hunger is, of course, something that all Americans — and the food industry in particular — should be dedicated to eliminating.
To fill out the picture of global food insecurity, we at Equal Exchange would like to point out the following: Of the 852 million hungry people in the world, many of them are, ironically, some of the same farmers and farm workers that keep us supplied with every imaginable kind of food and drink.
The tens of millions of farmers who grow the world's coffee, tea, cocoa and spices cannot live off their crops, and many live on mountainside plots that are poorly suited for other kinds of food production. So they must sell their crops for cash to buy the food they need.
This is where the food industry comes in, and where we all have our best opportunity to fight hunger every day through how we run our businesses. Farmers, as well as farm workers everywhere, need a fair price for their crops and their labor if they're to have enough money to feed themselves and their families. Unfortunately, they often do not.
Market forces and the drive to obtain lower prices for the food that we buy and sell squeeze farmers and farm workers, both here and abroad. However, unlike the Food For All program, this phenomenon largely happens behind the scenes and in remote communities.
One solution is to acknowledge this pattern and look for ways to root out hunger in our own supply chains. At Equal Exchange we've done this for 20 years with our Fair Trade practices with small-scale coffee and tea farmers around the world. Not surprisingly, the idea is catching on. Already hundreds of other food manufacturers now offer Fair Trade Certified foods ranging from chocolate to bananas. And many U.S. retailers like Shaw's, Stop & Shop, Hannaford Bros. and Wild Oats are doing their part by choosing to add these Fair Trade products to their shelves.
It's like the doctors' motto of “do no harm,” and is a perfect complement to existing initiatives such as local Food Banks and Food For All.
West Bridgewater, Mass.