Through special arrangement, what follows is an excerpt of a current story from Grocery Headquarters magazine, presented here for discussion.
Don't call them independents. Today's family-owned grocers prefer a new, more comprehensive description.
"Our members today have a greater flexibility and knowledge than ever before," said Tom Zaucha, president of the National Grocers Association. "That's why we have gotten away from the term 'independent' to 'community-focused.'"
And they're now "lifestyle centers," as opposed to plain old grocery stores. "The more you can meet lifestyle needs by being community-focused, the more successful you are going to be," he said.
Across the country a large number of retailers are dedicated to proving the truth of Mr. Zaucha's words. Among them is ValuMarket, a five-unit operation in Louisville, Ky. "We set up each of our stores for the neighborhood, and not just as a cookie cutter," said James Neumann, vice president.
To illustrate, the Mid City Mall ValuMarket in the upscale Highlands neighborhood is stocked with aisles of organic groceries, entrees from local restaurants, $3.99 half-gallons of non-homogenized milk in glass bottles, and $10 cans of coffee from a local upstart roaster. On the other hand, the Iroquois Manor store, in a low-income area filled with recent immigrants from war-torn countries in Europe, Africa and Asia, features aisles filled with imported produce and groceries from their homelands.
"An independent should never be out-freshed; never be out-serviced and never be out-communityized. They ought to be able to get closer and stay closer to their customers than the larger folks just because of their size dimension," said Dr. Richard George, professor of food marketing at St. Joseph's University in Philadelphia.
"I'm very optimistic about the opportunity that independents have," said Edward McLaughlin, Robert Tobin professor of marketing and director of the food industry management program at Cornell University. "We're starting to see a crack in the veneer and strategy of many of the conventional retailers, including a behemoth like Wal-Mart and their inability to react locally to changing market conditions and new consumer preferences."
"As an independent, one of our real advantages is that we can move very quickly in an individual store," said Tim Metcalfe, co-owner of Metcalfe Sentry Foods in Madison, Wis., an operator of three stores. "As a chain, when they make a move they are thinking of five, 10 or 20 stores, and it is harder to implement things because that implementation is so much broader."
The biggest challenge facing independents is there aren't enough strong voluntary wholesalers, said Burt P. Flickinger III, managing director of Strategic Resources Group. "On the other hand, the co-ops have never been stronger or better," he said. "There is a real renaissance of independents going through the co-op."
Independents have been switching to co-ops because they often feel voluntaries are giving them short shrift, he said. "It seems like too many voluntary wholesalers go for the short-term gain at the risk of long-term pain by taking pages out of the Fleming playbook," Mr. Flickinger said, citing the bankruptcy of what was once the nation's second-largest voluntary wholesaler. "They'll only reflect the manufacturers' discounted prices for one or two weeks, instead of for the full 30, 60 or 90 days," he said.
Discussion Questions: What do you see as the biggest challenges facing independent grocers today? Is there one challenge that is important but is often overlooked in coverage of independents? Where do independents have the greatest opportunities for success?