SN FOOD RETAILING SUMMIT

PALM BEACH -- It's prime time in the competition for consumer food dollars among multiple retail channels.

e the channel.

Speakers at the inaugural SN Food Retailing Summit held here last week pointed to the converging goals of many retailers when it comes to food. Top executives representing a wide variety of channels discussed the trends, growth strategies and fine-tuning now impacting their sectors. There were also reminders that for all the industry focus on channels, consumers only care about satisfying their needs -- wherever that will be done.

Steve Odland, president and chief executive officer of Tops Markets, stressed the importance of customer service and said the supermarket format will move beyond the "impersonal" nature of their relationship with customers.

"I believe that people will begin to shop for the experience in the grocery channel. Increasingly, the shopping experience is going to be the differentiating factor among all retailers," he said.

Wal-Mart executive vice president Nick White described the retailer's fine-tuning of its supercenters and the launch of its Neighborhood Market format, painting a picture of the store as laboratory, where distinctions among supermarket, mass merchandiser and drug chain have little meaning. The key is achieving maximum convenience for the consumer, he said.

"You should get the feeling that this is a convenience store right as you walk through the door," he said.

Walgreen Co. is finding its bread-and-butter prescription business squeezed by managed care, said Craig Sinclair, vice president of advertising. Food has proven to be a vital element in its growth strategy.

"We're not a drug store anymore," Sinclair said. "We're really a convenience store that happens to have this animal in the back called the pharmacy."

Consumer-direct company Streamline is growing its on-line ordering system while keeping in mind that providing customer convenience and information is more important than high technology.

"Consumers want convenience and simplicity and want products and information brought to them," said Timothy DeMello, chairman and chief executive officer of Streamline.

Michael Gilliland, chief executive officer of Wild Oats Markets, said the growth of his sector won't be seriously hindered by the movement of conventional operators into healthier products.

"We think there are a number of barriers to entry we think will keep them from having any kind of a meaningful effect on our business anytime soon."

John Stokely, chairman and chief executive officer of Richfood Holdings, described the food distribution strategy that has enabled this operator to continue its growth drive.

"Very simply, we believe in low-cost operations, big distribution centers in a regional approach," he said. "We are fanatics about cost."

Laurence Anderson, president of Super Kmart and executive vice president of Kmart Corp., said cross shopping is a prime attraction to the supercenter format.

Following is a more in-depth look at the comments of executives at the conference.

See Pages 2 and 12 for more on the SN Food Retailing Summit