The threats to independent retailers and the produce industry are relentless: inflation, labor shortages, supply chain issues, increased legislation, block chain, digital currency, ransomware. John Ross, CEO of the Independent Grocers Association, or IGA, tackled some of these issues and how independents can fight and come out ahead in his session presented at The National Grocers Association Show 2023, according to an IGA report.
Some key takeaways of Ross’ talk involve globalization, China and inflation.
It may be worth explaining to store employees, so they can explain to shoppers, that violence or a change in energy policy by people thousands of miles away can affect the product prices, quality and availability in your local community.
And protests in China could cause government crackdowns at manufacturing plants, decreasing U.S. access, “which will force us to change the way we think about affordable economies,” Ross said.
Inflation has caused grocery prices to rise, which is causing U.S. grocers to lose food consumption share to restaurants.
Competing with restaurants
In the height of the COVID-19 pandemic, grocery stores and restaurants were almost tied for food consumption share, although restaurants have continued to capture share over grocery since January 2022. But Ross is optimistic about grocers recapturing that share.
“One meal, per family, per week,” he said in his presentation. “That’s it. You do that and we will be ahead of the restaurants. Ask your customer, ‘What would it take to get one more meal a week from you?’ Maybe it’s prepared meals, fresh deli, a dollar menu.”
Independents can combat issues like rising prices caused by global unrest, climate change and inflation by focusing their communication to shoppers on their points of difference, Ross said.
Local equals fresh
Independent grocers can highlight their local, fresh offerings to attract and retain shoppers.
“If you ask shoppers why they like one retailer over another, they will say ‘local.’ During COVID, 68% of shoppers thought local stores and restaurants took their health and safety more seriously than big, impersonal national chains,” Ross said.
Also, 70% of consumers said local retailers are connected to farmers and community and supply chain, and they think local is a competitive advantage, he said.
"Shoppers say they want to do more cooking at home, be more engaged with their family," Ross said. "They learned that cooking at home should be cheaper, that it tastes better and is less calories."
He encouraged independents to appeal to those shopper desires by showcasing why cooking at home is better than dining out, like IGA has done in the Quarterly Marketing Kit signage and digital assets.
IGA publishes restaurant-worthy recipes on IGA.com and compares the benefits in the quarterly signage, highlighting calories and dollars saved by cooking the meal at home.
Tell shoppers what you’re doing
Ross said 75% of shoppers want high-quality produce from their grocery store.
“This is what our customers are telling us they want, but do we tell them we offer it? No. We're a very humble culture, but we don’t ring our bell the way that other kinds of brands do. But we have to,” he said. “Even if your core customers know what’s special about you, their kids don’t know and new people in the community don’t know.”
Many independent grocers are already doing what shoppers want:
- Offering fresh, local produce and meats.
- Supporting the local community.
- Providing healthier, less expensive alternatives to restaurants.
Now it’s time for the grocers to show shoppers exactly what they’re doing, he said.
“If ‘local’ isn't all over your store, then you’re doing something wrong, because shoppers want us to win,” Ross said. “They want the farmers market that is open every day at grocery store prices.”