As kids we were trained that the summer was the time to relax, play, renew, refresh and get ready for that grueling back to school September. At best we take off a couple of weeks, and usually use the time to “catch up” on family matters and household chores rather than using it to renew and refresh. Which is unfortunate — especially this year.
As we head into the fall, our industry will be faced with multitiered dilemmas that frankly I question whether we have enough energy left to cope with. The first eight months of the year have been a rocky time with the economy sputtering, political unrest around the world and, of course, how weather conditions have affected our crops and raw materials. And we haven't been able to even take a breather.
And now it is almost September, and the tension in Southern California is thick as negotiations between supermarkets and their union employees heat up once again. Shoppers in these areas are a bit less concerned than they were just a few years ago as they have since discovered alternate channels (and some have since forgone the traditional store and opted to do their weekly shop at the Grocery Outlets, Fresh & Easys, Save-A-Lots, Smart & Finals and even the dollar stores). This time around, the negotiations are for “keeps.” Shoppers are concerned about the economy, their own pocketbooks, and the rising costs of their foods. They have little compassion for either side. The outcome will signal the future for the traditional supermarket.
Then there are the rising commodity prices. Interestingly enough, we have witnessed major brands of coffees lowering their prices slightly (after increasing them substantially) in order to quell the consumer anxiety. Every crop and livestock estimate that I read indicates that prices will continue to rise, and the question is how supermarket retailers will balance their profits against the shopper's desire for lower prices. This time around it is unlikely that it will be easy to run those TV ads that announce the lowering of thousands of prices.
At the recent GMA Executive Conference, GMA Chairman (and CEO of ConAgra Foods) Gary Rodkin called for both sides of the industry to work more collaboratively and to “find a bit of magic” through innovation and brand excitement; an important foundation for us to build on for growth.
How I wish summer was just beginning and we had the time (and energy) to get ready for challenges ahead.
Phil Lempert is contributing editor of Supermarket News and CEO of The Lempert Report and SupermarketGuru.com.