NGA EXECUTIVE SAYS INDEPENDENTS STRONGER TODAY

David Ghitelman

ARLINGTON, Va. -- Tom Zaucha is upbeat about where independent supermarkets are today and even more optimistic about where they are headed in the future.

The president and chief executive officer of the National Grocers Association here told SN, on the eve of this week's NGA convention in Las Vegas: "As far as where independents are today, I would say they're more effectively positioned to compete against mega-chains and other classes of trade, like supercenters, than they were a year or two ago."

Zaucha cited several reasons for this improved outlook. "Manufacturers have become much more aware of the importance of diversity in the marketplace," he said. "In terms of product introduction, innovation and SKU variety, they've realized that the continued success of the independent, community-focused retail group is essential to their continued growth."

He also noted that "the big spending binge" over the last five years by the major national supermarket companies offers independents a chance to differentiate themselves. The mergers and acquisitions spree has "produced a tremendous amount of debt for the large companies, which requires them to do everything they can to cut costs. Sometimes that's translated into less service, less variety.

"These operational cutbacks represent an opportunity for independents to grow."

In addition, Zaucha observed that although "supercenters are very formidable," independents "have learned, and are learning today" to respond with a "focus on customer intimacy."

Helping independents develop strategies to take advantage of these developments, he explained, is the goal of the NGA convention. Zaucha said he expected approximately 2,000 attendees and 115 supplier companies to attend the the event. "We've been encouraged by the attendance and interest. It's a good sign."

Among this year's highlights are:

The S3 (Supermarket Synergy Showcase) Concept Show, which last year replaced the convention's traditional trade show, will be more closely aligned this year with other convention presentations, Zaucha noted. "There will be a better integration of the workshops with what is demonstrated on the concept floor."

More than 30 workshops will take place on topics from "Food Safety and Security Post 9-11, What's Changed?" to "Price Impact Merchandising, the Latest Niche." Commented Zaucha, "We've spread out their [workshops] scheduling so there are few overlaps and people will have an opportunity to attend more."

A new financial management conference within the convention, co-sponsored by three of NGA's business partners: National Cooperative Bank, Washington; LaSalle Bank, Chicago; and FMS, Tyson's Corner, Va. The two banks, Zaucha said, "have a unique expertise in the needs of the independent sector, and they are investing in the future of the community-based retail sector." He added that FMS will tell retailers "how they can streamline and save dollars on their accounting systems, whether they want to outsource it to FMS, or use their hardware and software systems."

A general session devoted to developing points of differentiation, featuring Robert Ukrop, president and CEO, Ukrop's Super Markets, Richmond, Va.; Richard Niemann Jr., president and chief operating officer, Niemann Foods, Quincy, Ill.; and Mike Provenzano, president and CEO, Pro & Sons, Ontario, Calif.

Three breakfast sessions are scheduled, including a session today on ethnic marketing with Raymond Butner, general manager, sales, gourmet specialist division, Unified Western Grocers, Los Angeles, and Jay Rosengarten, president, Rosengarten Group, New York; a Tuesday session on merchandising with Jerry Barnes, vice president, member affairs and education, General Merchandise Distributors Council, Colorado Springs, Colo.; and a Wednesday session on competing with Wal-Mart with Fred Martels, People Solutions Strategies, Chesterfield, Mo.

Convention activities got under way yesterday with a full day of Trading Partners Business Sessions, before the convention formally began in the evening. Zaucha noted, "That was introduced last year. It's a great opportunity for retailers, wholesalers and their vendors to sit down and discuss business issues efficiently."

Also at the NGA convention, the Women Grocers of America, an information and advisory arm of NGA, will honor Carol Bitter, president and CEO, Friedman's Supermarkets, Butler, Pa. (Bitter is also the co-chair, with Gary Phillips, president and CEO, Associated Wholesale Grocers, Kansas City, Kan., of the NGA convention.)

Looking beyond the convention, Zaucha said this summer NGA, in partnership with Pepsico, Purchase, N.Y., will launch a five-day leadership development program at Cornell University, Ithaca, N.Y. Enrollment in the program, he noted, will be limited to 35. "We're looking for new senior executives, those who may be a new president of a company or someone who is slated to move up into a leadership position," he said.

Meanwhile, back in the nation's capital, NGA will continue its advocacy efforts on issues of importance to independent supermarkets. "Our public affairs agenda will continue to be a high priority for us," Zaucha said. "Certainly, we will continue our efforts to make the repeal of the estate tax permanent. Our campaign to preserve consumer competition will also be a high priority.

"And we're going to look to rescind country-of-origin labeling. Quite frankly, it's more about politics than consumer safety, and it adds tremendous unnecessary costs to the system. We're also going to work with the Department of Labor and the Occupational Safety and Health Administration on voluntary ergonomics guidelines.

"Finally, we as an industry and as a nation have got to come to grips with a health care system that's broken. Right now, we're not particularly confident that either of the parties, Republicans or Democrats, has arrived at a solution we can wholeheartedly endorse."