Independents and locally focused grocers could do well in the near future because they have the potential of providing an overall experience that is more localized and personalized than larger organizations might be able to. Local insight and knowledge as well as an improved ability to be more friendly with customers could have a positive impact here.

I happen to fall into the rural market profile. My closet full-line grocer (which to means they carry produce) is 15 miles away. I have another one 18 miles in the opposite direction. Both stores are independent, local 3-4 store chains. The big guys wouldn’t be able to generate enough revenue here to make their model work. Thank goodness the independents are here or I’d be driving 40 minutes each way to the nearest big box.

That said I’ve also seen local stores in the cities thrive. They’ve been able to carve out a niche in local foods and personalized service. These are differentiators that the big chains have difficulty replicating.

Blue Goose Market is an independent grocer in our community that has been here for four generations. In 2019 things weren’t looking good so the owner added a wine bar and began a campaign to encourage locals to shop his store.

When the pandemic hit he went all out, adding additional departments, prepared food kits, cross-promotions with local restaurants and more. He let customers know that he was working hard for the community via frequent social media posts, sharing everything he did for them, including live videos at fish and produce markets at 3:00 am. When you couldn’t get hand sanitizer or cleaning supplies at chain stores you could find them at Blue Goose. Paul never let customers forget that he was on their side and the community responded.

Independent grocers serve more than rural communities. These retailers have a lot more to lose than a job when their stores are not producing. It’s good to see that consumers nationwide are responding.

The future can be bright for independent grocers as long as they can create differentiation – either through service or products – that enhance customers’ overall value perception of the store. Not all value is price-driven, but for a while many independents suffered because of an inability to compete on price with big box and big chain rivals. That said, location plays a big role in how price sensitive independents have to be. Instacart has also helped level the playing field when it comes to online grocery, enabling independents that may lack the capital to invest in home-grown solutions to still be competitive as consumer behavior and demands change.

Independent grocers are thriving because shoppers missed physical interaction during the past year. While BOPIS and BOPAC are convenient, the experience is different. Meanwhile, many shoppers have become adept at ordering certain items online and shopping locally for produce, for example, at a nearby independent grocer. That’s also why major grocers are scrambling to add smaller-footprint “local” store concepts to their mix. By the way, our Economic Development Practice helps local retailers compete by connecting them with better technology and business processes. We’re part of the Main Street America program that supports revitalization efforts for neglected downtowns.

The differentiation between successful independents and the ones not likely to make it through this next round of closings is the customer service, buying strength and innovation of their wholesalers. Retailers in the Wakefern and AWG co-ops, for instance, are getting some of the best support available to compete with both other independents and chains. C&S and UNFI/Supervalu offer their retailer customers buying opportunities similar to the chains and have ad groups that rival the best in retail grocery. The challenge is with retailers primarily supplied by what we used to call non-sponsoring wholesalers – those distributors that just sold and delivered groceries without any of the marketing/merchandising/tech support. With a few notable exceptions, these independents aren’t likely to be here in 10 years.

With strategic changes, independent grocers typically don’t have to go through all the time-consuming red tape large chains do, and they don’t have to worry about scaling those updates across hundreds of stores. Independent grocers can be flexible and evolve with the consumer, if they care to. The pandemic emphasized the importance of agility and accessibility to grocery stores, allowing local, smaller shops to shine.

Independents have several advantages over the larger chains that have improved over the last few years.

While many larger retailers are building out localization strategies for assortment, independents have already been doing this. Independents know the local producers, breweries, etc. and are part of the community and will support local start-ups. Consumers feel good about supporting local producers, and independents have the advantage.

Many independents, at least in San Diego, have the best options for healthy products across the store and frequently have better sections and options than Whole Foods which builds loyalty. A winning combination of local products, healthy options, and great experience will help independents continue to thrive in the coming years.

People certainly moved to support their local shops more during the pandemic and this has been to the benefit of local grocers. However even before that, people had started to look for more local products and if they could not find them in the chains they looked to the local stores. Many large chains started to appreciate this and to carry more local products, moving away from the one range fits all to a mix of economies of scale for the vast majority of products but with special products from the local area. With more sophisticated software today, national retailers can understand these local requirements and trends, and ensure they include them in their assortment. The ones doing so have performed better than those that ignore this trend. The pandemic may have given additional impetus to the local trend but it is certainly not new. It is an opportunity for local independents to stay relevant but big chains are working it out so they have to be even more creative to maintain their market share.

Independents offer personalized service, unique offerings and great location (to their specific target market). They need to continue focusing on these strengths to thrive and grow their business in the future, instead of focusing on other things. This is their strength and independents need to remember this.

I have been a strident champion of independent grocers and their collective ability to compete for over two decades, so of course it makes sense to me. But — that said — can we PLEASE get rid of those antiquated definitions for an independent? NGA’s definition could apply to stores not considered pure grocers and USDA’s criteria are straight out of the 1950s. Even FMI’s classic standard, ten or fewer stores, is medieval. “Independent” operators including KVAT, H.E. Butt, Wegmans, and lots of other best-in-class operators are now considered chains, but their roots and souls remain independent. What we desperately need is a new definition of independent operators. There are thousands of reasons why independents can do better than chains and — by these anachronistic definitions — become chains. I have argued forever about the fact that NGA, FMI, USDA, analysts, trade magazines, etc., etc. consistently fail to accurately portray independents because, if successful, independents stop being independent at some point, skewing all the numbers. Independents will continue to outperform traditional chains because they think… Read more »

In the last year, local became the new global as customers started patronizing small and local outlets. Many large grocers are trying to act local by carrying local assortments that might look different 10 miles out. However, with centralized operations, they can only do so much to build community relationships and become truly local.

The grocery industry remains one of our nation’s most vital and essential operations, as it meets the needs of the rapidly changing consumer. Our nation’s independent grocers with 21,000 stores, representing 25% of the retail grocery industry sales, $140B in annual sales, and 1% of the United States GDP, are a significant portion of the overall food services industry. With the emerging competitive forces and disruptions, the risk of remaining idle is stagnant growth and irrelevance. Most independent grocers have partnered with wholesale distributors for their procurement, distribution, and merchandising needs. However, in these uncertain times, deliberate disruption is a strategic path to sustainable growth and success. Independent grocers and their wholesale distributor partners can achieve competitive advantages without disrupting their daily operations. The most successful companies can self-disrupt while continuing to deliver and execute against their brand promise. Self-disruption requires accelerating your speed of execution as well as your agility to adapt and capitalize on new opportunities. There are five key areas where independent grocers and their wholesale distributor partners could strengthen their collaboration… Read more »

To keep independent grocers thriving, the key is shopper loyalty. Once a strong bond is created between the grocer and shopper, the challenge is maintaining this loyalty. Smaller operators can do this much better than mega chains.