COMPETITION IS INTENSIFYING FOR MEAL SOLUTIONS, SAYS PANEL

JOEL ELSON

LAFAYETTE HILL, Pa. -- Perishables -- particularly fresh meals -- is one area where retailers can differentiate themselves from their competition, said panelists at a recent symposium, Surviving All The Changes in Food Marketing Today, sponsored by Philadelphia-based St. Joseph's University's Masters Degree Program in Food Marketing.

According to panelist Norman Rich, president of Weis Markets, Sunbury, Pa., demographics and the workplace will continue to impact supermarkets, especially as more Americans eat away from home. He cited current statistics showing that 48% of all married couples in the U.S. are now dual-income families and 59% of all adult women are in the work force.

"With people working longer hours, time is their most precious commodity," said Rich. "Many working families spend less than 20 minutes preparing meals at home. They can either come to our store or go out to dinner -- which will be the battleground for our industry."

Rich said that in 1995, 45% of all meals were consumed at restaurants and fast food outlets. But by the year 2005, that number is expected to increase to 52% of all meals.

By providing competitive alternatives for time-pressed shoppers, supermarkets can exert a lot of drawing power on consumers. Rich cited the meteoric sales of precut bagged produce, a type of item that fulfills the convenience factor.

"Whole new categories have sprung up almost overnight, like value-added salad in the bag and peeled baby carrots," said Rich. "When they first appeared in 1989, sales nationwide were $5 million; they grew to $500 million by 1994 and totaled $1 billion last year, and we're only scratching the surface."

Supermarkets are "competing in more new categories than we did 20 years ago, and against other retailers that are well financed," like other supermarkets, mass merchandisers, drug chains, grocery wholesalers, warehouse club outlets, fast-food outlets, convenience stores and category killers like Staples, he said.

Another panelist, Frank Rostan, vice president of perishables at Elizabeth, N.J.,-based Wakefern Food Corp. -- the wholesale buying arm of the ShopRite retailer-owned cooperative -- and a member of the executive committee for merchandising and marketing, echoed concerns that retailers face competition not only from traditional food-service venues, but also from mass merchandisers.

He said stores like Wal-Mart, Bentonville, Ark., are now selling barbecued hot chickens at the same price as ShopRite members, "but for a bigger size [bird]."

Rostan said that where shoppers once visited Wal-Mart-type stores once a month, mainly for bulk items, these formats "now compete with us on fresh foods to a greater degree."

The ultimate challenge for retailers facing this kind of growing competition "is charting a strategy and response to the changing nature of the industry," said Weis' Rich.

The pace of industry consolidations has made this challenge all the more difficult, though it's possible to succeed "by adapting and evolving to meet customers' needs -- and good retailers have long understood that they are in the customer-relationship business," he said.

However, retailers should not lose sight of their primary purpose. "We are not a restaurant, and we will never be a restaurant," said Rich. "[At Weis], we've always kept it simple, making sure we have the quality."

Weis' central kitchen maintains uniformity of quality, with a program based on a chicken and turkey hot-foods program and a lot of cold entrees, he noted. "But we won't be a sit-down restaurant."