NEGATIVE IMAGE BLURS RETAILING'S ROLE, SAYS STUDY 2004-09-20 (2)

ELLIOT ZWIEBACH

OXFORD, England -- Food retailers are close to consumers. Thus, they are in an ideal position to understand their changing needs. Yet this role often goes unrecognized or is interpreted negatively, according to an international study of the contribution of food retailing to society and the economy.

"The retail sector as a whole is in many instances viewed as having a damaging influence, whether in terms of employment conditions, competition practices, product quality or environmental impact," the report said.

However, because of supermarkets' unique position as a main interface between consumers and suppliers, it is often "the key generator of business activities throughout the value chain," the report indicated.

The study was commissioned by CIES - The Food Business Forum and was conducted by the Institute of Retail Management at Templeton College at the University of Oxford here.

According to the report, the contribution of the food industry to the economy ranges "from stimulating demand among consumers to increasing efficiency in logistics."

In terms of its contribution to employment, food retailing plays an important role in reducing unemployment "by recruiting, training and developing a high proportion of less-skilled employees," the report indicated.

However, because the sector "still grapples with widespread perceptions that it is an unattractive career choice," the report suggested "a more concerted effort from the sector is needed to highlight and communicate job benefits and career prospects in retailing."

Although many food retailers consider their employees their most important asset, the report added, "human resources still has limited representation at board level."

In terms of the industry's contribution to society, the report said food retailers "are part of the fabric of daily life. By virtue of their closeness to consumers, retailers can react rapidly to customer demand and lead change in the value chain, [which] translates into an evolving choice of products and a wider range of consumer-focused services ... that reflect changes in society.

"By providing a constantly evolving range of products and services, retailers react to changes in society ... [and] have thus become the customer reference point with regard to a number of socio-economic debates."

To demonstrate the power of food retailing, the report pointed out that the 20 biggest retailers in Europe are grocery retailers, as are 19 of the top 20 global retailers, while six of the top 10 U.S. retailers sell food.

In addition, grocery retailing is leading best practices among consumer-focused supply chains, the report indicated.

In the United States, food retailing was the second biggest retail sector in 2003, accounting for 21% of all retail businesses, with grocery sales totaling approximately $1 trillion, of which 60% represented food sales, according to the report.

The report noted its findings were based on secondary research covering a wide range of sources. "Historically, retailers were regarded as mere ciphers in manufacturers' distribution channels," it said. "The perception was that they added little value beyond the element of convenience to the end consumer."

As a result, there has been "a distinct lack of relevant and comprehensive data on the contribution of food retailing to society," it indicated, with no single authoritative source of statistics either on the retail sector as a whole or on food retailing in particular, which reflects a traditional lack of attention toward retailing as a key engine of the economy.

"Official statistics in all countries appear generally much weaker concerning retailing than manufacturing," the report noted.

The report said the food industry sector must agree on what measures most adequately reflect its net contributions to the economy, employment and society. "Once such relevant and authoritative data is developed, food retailers will need to communicate it to key audiences as part of a two-way dialogue with society," the report suggested.

Separating Myths From Facts

OXFORD, England -- A study on the role of food retailing in society seeks to dispel several myths about the industry.

The study was conducted by the Institute of Retail Management at Templeton College at the University of Oxford here at the request of Paris-based CIES, the international food retailing association.

The myths -- and the study's conclusions on the truths -- include the following:

Myth: Retail jobs consist only of cashier and sales-clerk positions.

Fact: "With dedication and commitment, a sales associate can be promoted into many retail career-path options, including merchandising and buying, management, inventory control, distribution, finance and internal auditing, marketing, sales promotion and public relations, information systems, e-commerce and human resources."

Myth: Retail positions do not prepare individuals for challenging, upwardly mobile careers.

Fact: "Career paths in the dynamic, expanding retail industry are exciting, varied and lucrative," the report said, giving individuals the opportunity to oversee an average of 150 people at a store averaging sales of $25 million to $30 million and the opportunity to develop skills in problem-solving and decision-making; a good work ethic; teamwork and individual initiative; and a variety of people skills."

Myth: College degrees are not needed for careers in the retail industry.

Fact: "While some individuals are promoted based solely on retail experience, most retail career-level positions are easier to attain with a college degree."

Myth: The growth of e-commerce means retailing is a declining industry.

Fact: "E-commerce will only supplement, not replace, the other aspects of the retail industry. Moreover, retail employees with information technology skills will be more highly valued than ever."

Retailing and Society

OXFORD, England -- A study on the role of food retailing in society found that overall, retailing has "fundamental significance" because it serves as the focal point of communication between the producers of goods and their consumers.

CIES, an international food retailing association based in Paris, commissioned the study, which was conducted by Templeton College at the University of Oxford here.

Among the key functions of retailing in society, according to the study:

Retailers actively stimulate demand, which impacts economic growth.

Retailers play a fundamental part in educating consumers about new products.

Retailers' brands and ranges often act as a guarantor for product quality, traceability, authenticity and safety.

Food retailers provide social environments and naturally become the customer reference point with regard to a number of socio-economic debates.

The study also concluded that some matters that are particularly relevant to food retailing, such as food safety and consumer choice, are important but not measured in a systematic way by the industry.

"Measures of change in product choice, or of the increasing speed of movement of products through the supply chain, for example, could be collated and published so that the contribution could be better explained and information be less driven by anecdote," the report said.

In conclusion, the report stated that food retailing "possibly touches more people more often than any other industry. It has social, cultural and economic significance in our lives. It is part of the fabric of everyday living. Its closeness to consumers and its ability to relate to customer demands and wishes is its key contribution to leading change in the value chain. It is also a visible face of the food business and subject to the contradictory and changing demands of consumers."