FOOD RETAILING SUMMIT

David Merrefield

The notion of vertical trade channels is nearly obsolete. Supermarkets now compete against discount, drug, fast-food and white-tablecloth restaurants. And so on it goes with all channels of trade.

That raises the fundamental question: What should be done about that? It was upon that question that the Inaugural SN Food Retailing Summit was convened last week in Palm Beach, Fla. Executives attending had a chance to hear from their counterparts responsible for several styles of trade, all of which depend to greater or lesser degrees on food sales. You'll see extensive reporting on the Summit in this week's issue on Pages 1, 12, 78, 79, 80 and 81.

In the meanwhile, here's a list of speakers, in the order of their appearance, with summaries of what they had to say:

* Tops Markets (Ahold USA): Steve Odland said supermarkets are facing a future that may require great format changes. Supermarkets may evolve into mall-like environments with a food core surrounded by various leased departments. This change will be driven by consumer demands for shopping experience, not just need fulfillment.

* Richfood Holdings: John E. Stokely cautioned that the food industry is going through a period of profound change driven by consolidation, coupled with a population base that simply isn't growing at the rate of the shopping experiences put before it.

* Walgreen Co.: Craig M. Sinclair said perhaps no company has jumped more fully into the broader trade channel waters than this one. It no longer considers itself a drug store, but a convenience store -- with a substantial food presentation -- that happens to have pharmacy expertise.

* Super Kmart: Lawrence L. Anderson said the food-related versions of Kmart stores have successfully "caught the supermarket wave" and are depending to a large degree on food sales for their future success. That means cross shopping in the big boxes is alive and well.

* Wild Oats Markets: Michael Gilliland's company was leveraged from a single eclectic store that sold goods ranging from bicycles to crystals to organic food into a chain of more than 60 food stores in just a decade. The stores remain highly idiosyncratic, though, which puts up a barrier of entry in front of conventional food chains eyeing the natural-food market.

* Wal-Mart Supercenters: Nick White said this behemoth of a company is learning that the big supercenters it has dealt across the landscape are just too large for some shopping purposes. That accounts for the advent of the conventional-supermarket format the company's tinkering with now. The conventional format puts high-velocity products on a convenience-driven stage.

* Streamline: Timothy DeMello said the last word in convenience is eliminating consumer shopping altogether. That's what this direct-to-consumer, Internet-based experience offers. This style of retailing especially appeals to consumers who are driven primarily by a desire to save time, not money.

SN's initial conference was a great success. Please look in these pages next fall for particulars on the second edition of the Food Retailing Summit, and make plans to attend if you can.