CHICAGO -- Regional cooperation among independent retailers represents the future of the independent grocer, an IGA operator told a workshop audience here during the FMI convention earlier this month.
"The door of opportunity is open now, and it may not stay open forever," Archie McGregor, owner of Archie's IGA, St. Maries, Idaho, declared in a session entitled, "Learning from Independent Operators."
The door of opportunity for McGregor was opened when IGA divided its U.S. operations into eight regions last fall and encouraged greater cooperation among its operators "to improve communications and maximize IGA's potential" among retailers, customers, distribution companies and Red Oval manufacturer partners, he said.
"It's easy to get lost in day-to-day details but hard to see the world beyond your own cash register," McGregor said. "But you must look at the big picture."
For McGregor the big picture included the 100 or so IGA stores in his six-state region -- Alaska, Washington, Oregon, Idaho, Montana and Wyoming -- and the three distribution centers serving customers in the region. Each region developed an advisory board that includes retailers, wholesalers and manufacturers who work together to design programs to enhance advertising, buying and marketing efforts, McGregor explained.
"When we sought to coordinate our efforts, we discovered areas of cooperation that have yielded very real dividends," he declared. "We found a lot of common ground -- and we also found we were wasting a lot of money individually."
The retailers in the region adopted three programs as a group that have benefited all of them, McGregor said. The programs included the following:
A VIP buying program, in which the retailers guarantee as a group to buy 100 pallets every other week if they can get the merchandise at a lower price.
An advertising program that involves one ad for the entire region -- with the ability to customize the front page -- to reduce costs further.
A direct-delivery program in which retailers can collect additional marketing dollars and take advantage of other programs that are not available to them as individual companies.
"And we've learned a lot from each other by sharing what works and what doesn't, which helps make all of us better operators," McGregor said. "Regionalization has strengthened each of us by giving our customers more selection and leveling the playing field by driving down costs without taking anything away from our independence."
In other presentations during the same workshop, two other IGA representatives shared ideas that have strengthened operations:
Lou Jardin, chief executive officer for IGA Distribution in Australia, described his country's Community Chest programs, in which retailers raise money for various local charities through sales of IGA-branded products, supplier-funded promotions and store-level events. "We can match the chains on everything they do, but they can't match IGA in these Community Chest efforts," Jardin said.
Jake Weber, owner of Weber's IGA Food & Drugs, Sedona, Ariz., talked about IGA's online training program, which is available through the IGA Institute. Phase One of the program, offering e-learning manuals, is already in place, but Phase Two, due next year, will be more interactive and make it possible for training to concentrate on areas in which employees are weak.
Weber also praised IGA's store assessment program, which seeks to improve store-level standards by grading stores annually on appearance, branding, operations and sanitation.