LAS VEGAS — The weakened economy could offer positive opportunities for supermarkets to strengthen their bond with consumers, a panel of industry executives said last week at a general session of the National Grocers Association's annual convention here.
“There will be opportunities for the industry to recognize and accommodate changes in shoppers' habits, particularly the shift in spending to more eating at home,” Chris Coborn, president and chief executive officer of Coborn's, St. Cloud, Minn., said.
“We're seeing that trend in our store mix, and that can be a great thing for us. We can't control commodity prices or where other prices will land, but we can capture customers if we cater to the changes they exhibit in how they shop.”
Jeff Reagan, vice president, grocery marketing, Wakefern Food Corp., Keasbey, N.J., agreed that ShopRite customers are buying more ingredients than ever, “though many could use advice on how to cook meals, and that's an opportunity for us. But we certainly see customers with a greater sense of family and eating at home.”
For Mark Batenic, president and CEO of IGA USA, Chicago, consumers are confused, he said, “and they're looking for someone to lead them — and the supermarket can certainly do that.”
“At a time many people are worried about their jobs, the supermarket can be a source of community spirit and values. In this economy, there are opportunities for independent grocers to thrive, because we are set up to respond to consumers in those ways,” he said.
“It's all about the consumer's experience in the stores and how they are treated. The electronic devices everyone uses and relies on today make us smarter, but people still crave actual human contact. We're dealing with people who want to be recognized and treated kindly, and if their grocery store can offer that in troubling times, they will be loyal for life.”
Katie Bayne, chief marketing officer for Coca-Cola Co., Atlanta, said she also recognizes the trend among consumers to spend more time at home, particularly with the availability of a wide range of digital entertainment. “So home entertaining is blossoming again, and that desire for nesting offers a great opportunity for companies like ours to do more merchandising with various partners,” she noted.
The panel also agreed that value will continue to play a major role in how consumers decide where to shop.
“There are a lot of other things you need to offer, but if you take your eye off the prize that value represents, then you're not starting at the right place,” Reagan said. “No matter how involved you are in the local community, if you are out of bounds on price, you'll end up on the outside looking in.”
According to Coborn, “People are looking for bargains on the brands they recognize — and they're using shopping lists, buying fewer name brands and buying less on impulse — so you've got to keep your operations simple and make sure you give them what they want at the right price.”
Asked about the role of private-label vs. national brands, Batenic said, “We don't have the penetration levels we would like on private label, but there is greater consumer confidence than ever before in those lines, so it's incumbent on everyone to keep that confidence high with quality products at fair prices.”
Reagan said ShopRite customers have made it clear over the last 12 months that they are interested in trying store brands, “and if private-label items connect with customers, that's good for the store banner. We've seen penetrations in some items move from between 20% and 30% to a share of 25% to 35%, and as a result, we're now looking for new categories in which to offer private label.”
