When retailers rate suppliers, associations, government agencies and other nonretail entities for their industry leadership abilities, what are the most important characteristics under consideration?
A recent industry survey suggests that chain and independent retailers often look for different things in assessing who are the industry leaders.
The survey, commissioned by equipment manufacturer Hobart Corp., Troy, Ohio, found some key areas of agreement among chains and independents, but also some major divergences.
The research polled large chains and small independents, in revisiting a survey from 1998. It was executed by Chicago-based Technomic.
The polling found general agreement among all types of retailers on the key industry issues or pressure points, according to Dave Casto, president of Hobart's food retail division.
"The things that hit the top of the list were technology, the home meal replacement phenomenon, food safety and labor," he said.
But the data exposed differences in how retailers perceive the leadership traits exhibited by the various industry entities:
Independents were impressed by entities that provide assistance to the industry at large and have industry stature.
Chains gave more weight to organizations that offer direct assistance to their individual retail operations.
"Chains supermarkets are thinking selfishly and appropriately," said Joe Pawlak, senior associate at Technomic. "They're saying, 'You can educate the industry, but it's more important for you to come into my operations, understand what I'm doing here, and educate me on what's going on and how it applies to me specifically."'
As an example, when asked about the need for a leader to have a responsive and effective service network, 100% of chains polled considered that an important criteria. In contrast, only 84% of independents expressed the same opinion.
In a similar vein, 87% of chains considered it important for an entity to be able to provide cost-cutting tips and procedures to them, compared to 68% of independents.
Chains also gave higher priority than independents to traits such as providing solutions to help retailers grow their businesses and partnering with retailers in their businesses. The picture reversed, however, when the topic turned to entities known for assisting the industry at large or having industrywide stature. Independents gave more importance to these characteristics than chains.
Pawlak said such traits are more attractive to independents because smaller retailers may be in need of experience in competing in the larger, overall market.
For instance, 88% of independents gave importance to entities that take high-profile industry positions on issues, vs. only 61% of chain respondents.
Also, independents gave higher priority than chains to leaders that provide support to the industry on key issues and to suppliers who are recognized as experts in the food industry worldwide.
"Independents want someone who has walked that path before, and that has expertise in an area the retailer doesn't have," Casto said.
Independents also are not accustomed to receiving personalized service from industry entities such as manufacturers and associations, and therefore often don't expect it, according to Hobart's analysis. Therefore, they tend to be more industry focused in their expectations from leaders, according to Hobart.
Independents also identified an industry leader's Internet presence as a more important area. "The reason for that, I think, is that many of the chains already have direct linkages with their suppliers and they're more sophisticated in terms of where to get information," Pawlak said. "Independents aren't focused in that area, so they are looking for someone to help them with links to other food industry Web sites."
Differing responses on the subject of food safety education further crystallize some of the differences in outlook between chains and independents. Eighty percent of independents lauded the leadership of entities that educate the industry on proper food safety procedures, vs. 61% of chains. But entities that "help me with understanding food safety initiatives" drew larger support from chains than independents (91% vs. 82%).
Among changes from the earlier survey, chains gave much more weight in the most recent version to assistance with meal solutions efforts. In 1998 only 62% of this segment answered that assistance in HMR program development either "completely describes" or "somewhat describes" an industry leader. In 2000 this vaulted to 87% of chain respondents. In contrast, independents were consistent in the two studies in giving lower importance to HMR assistance (56% this year vs. 57% in 1998).
Why has HMR assistance apparently grown more important to chains than independents? "Independents are probably a little more agile than the big chains," Casto said. "They can make course corrections or adjustments in menus or presentation sometimes faster than a chain."
In another change, independents increasingly identified a leader with an entity that is "highly visible in the industry" (97% vs. 84% in 1998).
The research polled some 270 different individuals in the food industry, 90 of which were retailers in the supermarket sphere. The balance consisted of food-service executives. The supermarket group included senior executives and other decision makers from chain and independent retailers.
Of the 90 structured supermarket industry interviews, about 20 also included qualitative interviewing for a deeper understanding of the issues. Chains surveyed were among the Top 100 nationally, with most contacts involved in equipment purchasing.
But executives beyond the equipment realm -- in areas such as deli and meat merchandising -- were also surveyed. Independent supermarkets tended to be one- to three-unit operators in a geographic market.