Why do independent retailers deserve a special place in the hierarchy of the grocery industry?
It's an appropriate question to ask in this special issue of SN that focuses on independent supermarkets, a breed of retailer that is often considered an endangered species. Recently, the definition of this class of retailer has changed. Independents are no longer narrowly defined as operators with 10 or fewer stores, or as retailers who rely on wholesalers for their products. I looked up independent in my Webster's and here's what I found: "Not influenced or controlled by others ... not subject to another's authority or jurisdiction."
That definition gets to the heart of what the independent retailer is all about. After Webster's I turned to a source I trust even more: Feargal Quinn, founder and owner of one of the world's great independent supermarkets, Superquinn, in the Republic of Ireland. I sat with Feargal last month at a U.S. trade show and discussed at some length the subject of independent operators. He believes independents are in the best position to act in the long-term interests of consumers because these retailers aren't publicly owned.
Feargal is the author of "Crowning the Customer," a book on smart customer service that has been read and used by retailers in many countries. He defends consumer interests as a member of the Irish Senate and his 18-store group is visited by executives throughout the world (including me last year) who are studying the performance of best-of-class retailers.
"We need to pay our managers on the basis of retention of loyal customers rather than on profits," Feargal stressed. "Once the focus of management's attention switches to loyalty the other things will follow."
An Irish retailer doesn't face the same challenges as those in the United States, but some issues are quite similar, to hear Feargal tell it. U.S. independents are faced with daunting competitive challenges from Wal-Mart and a host of large chain retailers. In Ireland, tiny Superquinn has operated for 40 years in territory that is being invaded by foreign retailers, including Tesco, Sainsbury, Aldi, Lidl, Safeway of the U.K., Marks & Spencer and others.
But Superquinn is holding its share, and expanding outward from its base in Dublin. What does Superquinn have that the chains don't? It has gained the trust of customers by acting quickly on the issues most important to Irish consumers. Some time ago, Superquinn took the lead in reassuring those who were anxious about food safety by telling them exactly which farms their meat came from. Now, the company is going one step further by informing them what the animals were fed.
Superquinn is also good at gauging the needs of consumers during product development. It almost released a low-fat version of its popular, signature sausages, but scrapped that effort when it realized the taste wasn't up to par. It gave efficiency a backseat to freshness with a program that doesn't sell bread that's more than four hours old. "The accountants didn't like this," Feargal conceded.
Superquinn also has loyal employees, even in this booming Irish economy. Feargal empowers associates by encouraging them to develop ideas and then rewards them for becoming "the champion and evangelist" by selling the ideas to other Superquinn units. Not surprisingly, there are a lot of independent thinkers at this stellar independent.