CENTRAL ISSUES OF THE NINETIES

David Merrefield

The industry is gathering this week in Chicago for the annual Food Marketing Institute convention and exposition, so what better time to take a look at critical issues of the moment?

After all, we're nearly halfway through 1995 -- the year that's at the middle of this decade. At the moment, we're far enough removed from the 1980s to have recovered from some of their excesses, and close enough to the new century to begin to discern some of its shape. Glimpsing the shape of the future is the intent of this special FMI convention issue of SN, "The Industry at Mid-Decade."

As you'll see by looking at this week's cover, five critical industry challenges that are important now, and which will be important in the future, are addressed in various ways throughout the issue.

The industry challenges are: consumer intentions for future spending (on Page 18), new politics (Page 28), re-engineering (Page 32), competition (Page 35) and changing interest rates (Page 38). Each of those issues is vital, but perhaps the one that means the most has to do with the direction of consumer intentions concerning spending. Broadly, if consumers plan to loose more food dollars -- and direct them toward supermarkets -- many challenges will be masked. If they don't, the reverse pertains. So, in a bid to find out directions spending might take, SN commissioned its second-annual consumer-research project. It was conducted by America's Research Group, Charleston, S.C. Survey reports in this issue of SN are based on results of no fewer than 1,000 consumer interviews. Each respondent was asked in various ways about spending intentions for upcoming months. Here's just a sample of results: Respondents were asked if they plan to spend more or less on food in upcoming months, and 44% said they would spend more. And, since 41% said they plan to spend more in supermarkets (and 33% plan to spend the same amounts), the outlook for supermarkets is decidedly bullish.

In another very interesting part of the survey that relates to supercenters' potential, consumers were asked if they would be likely to shop in a supermarket attached to a discount store (to allow those unfamiliar with the concept to respond). Fifty percent said they would shop in such a store, 45% said they would not. In other findings related to competitive formats, just 5% of respondents said they plan to spend more money in convenience stores. Results also suggest that drug stores aren't picking the pockets of supermarkets either: Just 4% of respondents said they plan to buy more food at drug stores and a huge 60% said they are currently spending less on drug-store food offerings than before. Consumer trends will also form the basis of much of this morning's FMI State of the Food Marketing Industry session, "Speaks 1995." Speaks is available at two times today, at 8:30 a.m. and at 10:15 a.m.; both presentations are at McCormick Place. An in-depth report of Speaks findings is planned for next week's SN.

But as for this issue of SN, in addition to survey highlights on general shopper intentions, survey findings about consumer attitudes toward many product categories, including low-fat, frozens, store brands and deli, are also included. Opinions about productivity issues, pharmacy and others were also researched. To present those findings, the first page of each section of this issue features survey results. Section page numbers are listed in the index to the right of this column. So between information obtained at this week's FMI convention, and consumer-research results throughout this issue, the way to direct several strategic initiatives at this critical time should soon become clearer to convention attendees and SN readers.