NGA ANNUAL CONVENTION SHOW

BARBARA MURRAY

RESTON, Va. -- As few as 15 years ago, the independent grocer dominated overall sales of grocery and nonfood products. With the onset of supercenters, category killers and warehouse clubs, this domination disappeared, to the point that over 20% of these sales left the grocery channel for others in the last nine years, according to the National Grocers Association here.

To combat this trend, the NGA's Industry and Trade Relations Executive Council has focused on the causes of and solutions to the problem. A workshop given at the recent convention in Dallas summarized the special report issued by ITREC, and aimed to help independent retailers increase their cash flow, reduce overhead, drive up their customers' average order and enhance profit.

Specific ideas, which the NGA calls "the five keys to successful Center Store sales growth," are: develop one technology platform, establish stronger trading partner alliances, take advantage of category management, market to "the ultimate consumer," and execute it all "seamlessly."

"Everybody is going after Center Store," said John Stanton, professor of food marketing, St. Joseph's University, Philadelphia, moderator of the session. "Mass drug stores just put the independent pharmacies out of business, and now they are taking aim at independent food retailers," he said. For some time, deli and prepared meals have been the "glam" store sections, but he reminded retailers that more than 50% of the average store's sales come from Center Store.

"Last time I looked, you don't take margin to the bank, you take cash to the bank," agreed Larry McCurry, executive director, industry development, for Unilever HPC, Chicago.

Solution selling is one idea to help, and it is most powerful when stores use the assets of all players with consumers in mind, said Jay Campbell, president and CEO of Associated Grocers, Baton Rouge, La. Placing hanging racks of parmesan cheese in front of foods that go with cheese was one classic idea.

"We must face the reality that the market has changed a great deal," Campbell said.

"I remember when we were a warehouse. We bought stuff and let it sit there. Next, we became a distribution center, and became more focused on getting it out to the retailer in an efficient and productive way.

"Now, we're a retail support center. We do a variety of things to help our retailers. Now, we have to focus on how to get it out of your box, and we're not happy until you sell it through your checkstand," Campbell told the group. Encouraging retailers and wholesalers to operate as more of a virtual chain is one of the strategies of the ITREC report. Campbell said Associated's banner requires a certain standard, as do IGA's and Wakefern's ShopRite.

One thing Unilever does is sponsor the Creative Choice ad awards, which are presented at the NGA convention each year for best merchandising ideas. "We can get this business back if we focus," said McCurry.

A former retailer in the audience, Lenny Sperry, now director of retail operations at Associated Grocers, Salt Lake City, said, "We've lost the communication we used to have through the sales force; it's been lost in the evolution of category management."