Viewpoints

Retailers Need to Bet on Post-Recession Trends

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Did last week's big Las Vegas gathering — the FMI 2010 event — put the industry in a gambling mood?

You bet.

Retailers and their trading partners increasingly recognized the need to place bets on where consumers and the economy are headed. Companies have no choice because the future of their enterprises depends on taking proactive stands on the future. However, the odds of success are improved because retailers are mulling mostly educated bets based on their deep knowledge of customers.

Everyone is trying to gauge how business conditions will impact these decisions.

“Is it a true upturn, or a stop-and-go recovery?” Leslie Sarasin, FMI's president and CEO, asked rhetorically during the annual FMI Speaks presentation. “Will the recession lead to permanent changes of habits?”

The consensus answers from conference attendees seemed to be yes (it is a true upturn) and yes (expect permanent shifts in consumer behaviors). But of course no one could be sure.

A sense of cautious optimism was widespread, however, and seemed to make retailers feel more confident about their plans.

“The mood is positive and upbeat,” said Marc Batenic, president and CEO, IGA USA. He said IGA is striving to find ways to meet customer needs better than ever before in areas including convenience, health and wellness, and new shopping experiences.

Talk of change was everywhere at last week's gathering. FMI announced a slogan for its organization: “Feeding Families and Enriching Lives.” It was a reminder that in these times it's important to keep reintroducing oneself and reminding others of your value.

Private label was discussed as a segment in transition. While store brands are expected to continue rapid growth, some observers said future advances will require different ways of approaching the business. For example, one conference speaker, Mark Lang, a professor at St. Joseph's University, urged retailers to avoid promoting private label with price reductions, because low prices are now assumed, and instead to trumpet quality.

Continued change was predicted in the ethnic retailing arena. While that's not a surprise, one speaker underscored that by around 2042 ethnic minorities are expected to become the majority. That fact needs to figure into the strategies of most retailers.

Meanwhile, supermarkets were told to shift into higher gear with health and wellness strategies. One conference speaker, Wendy Liebmann, CEO and “chief shopper,” WSL Strategic Retail, said grocers have the opportunity to reinvent their businesses by “being the health and wellness store” for consumers..

Lots more things need to change. New directions are needed in aspects of the supermarket business still based on earlier models, ranging from employee relations to some layouts of Center Store and the front end, said speakers.

It's ironic that talk of change and the need to take risks played out against a familiar format: an FMI trade show. But this was not a carbon copy of past shows. There were lots of new directions in educational tracks, exhibits and other aspects. Even the location is a moving target, with the next one set to take place in Dallas in 2012.

And by that time, we'll have a better sense of which of the industry's bets on future directions are paying off.

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Contributors

David Orgel

David Orgel is executive director, content & user engagement, of Supermarket News (SN) and its website, SupermarketNews.com. Orgel delivers his opinions on industry trends through a bi-weekly...

Jon Springer

Jon Springer has been writing about food, food retailers and food retailing for more than 10 years, and is in his second tour of duty with Supermarket News. His prior experience includes covering the...
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