Massachusetts on Slow Road to Recovery

by Ashley Bates/staff writer

Chris Flynn, president of the Massachusetts Food Association (MFA), welcomed grocers and other members of the Massachusetts supermarket industry to the ­organization’s annual convention on Memorial Day weekend 2012.

This year, the MFA celebrated the 31st anniversary of the convention with a focus on ethnic cuisine.

“This year’s theme is ‘MFA’s Trip Around the World.’ We also have a ­category focus where we highlight one part of the store, and this year we showcased international/ethnic foods,” said Flynn, a Boston native and Boston College alum. “We have a unique convention; we call it the annual family ­reunion…it really is a family-style convention. We have 1,000 people and head out to the White Mountains in New Hampshire to the historic Omni Mount Washington Resort, which is a beautiful building that is over 100 years old. We take over the whole hotel, along with some other facilities and condos in the area.

“We hear over and over, particularly from our vendor community, that they can come up and relate to the trade in an informal and casual atmosphere and develop ­relationships that will help them in their business and a have a great time.”

Discussions at the convention this year ranged from trends to issues that are affecting the state. Massachusetts’ unemployment rate is 6.3 percent, lower than the April national average of 8.1 percent, according to the U.S. Bureau of Labor Statistics. But the state is not seeing an accelerated recovery rate.

“We’re seeing a very, very slow recovery,” Flynn said. “Our unemployment rate is probably a little lower than most, and we seem to have an uptick in ­employment, but people are still very cautious. Our retailers are ­holding their own, though. They are starting to see a ­little bump. But it really is slow-going for a ­complete ­recovery.”

According to Salemnews.com, on May 16 the Massachusetts Senate unveiled the 2013 spending plan with no new taxes and a $275.4 million increase on unrestricted local aid. Along with the influx of state funds, 616 construction jobs will be created in central Massachusetts as a result of the Patrick-Murray Administration’s $105 million used to preserve 2,196 housing units across the state, Golocalworcester.com reports.

Other key victories of the MFA, according to Flynn, include the recent increase in the number of liquor licenses a store owner could hold.

“We negotiated at the end of last year with the liquor industry, the package stores and the distributors on a provision in the state where you could only hold up to three licenses to sell liquor, whether it be wine, beer or liquor. We now have the availability of getting an additional six ­licenses over an eight-year period.”

The new license provision went into effect in January.

“Our members now have the availability of getting two licenses in the first four years, then getting an additional two four years later and then in 2020 they can go get the last to add up to nine,” Flynn said.

The MFA has more than 150 members, with members ranging from major wholesalers such as Bozzuto’s to chains such as Whole Foods to a variety of independent grocers. The organization’s mission is to represent these members’ interests at the local and state level.

“We are fortunate to have a complement of both very good large supermarket operators and very good independent operators,” Flynn said. “I think that the ones that have survived the test of time have been very aware of who their customers are, what their needs are and offer something a little different than the traditional large ­­operators. They provide things like service and more ­targeted products to the particular area and have been able to make it.”

Many independent retailers in the Bay State are ­participating in the state-supported “buy local” program, a trend that is becoming a mainstay in the supermarket world.

“We work with the Department of Food and Agriculture on how to showcase that (locally grown produce), and certainly we have many operators that take advantage of it. It is a little difficult in the Northeast with the weather…We have our short window, but certainly retailers take advantage in the summer and early fall.

“There certainly is an awareness and it is something that the consumer wants.”

Large chain stores also continue to impact the Massachusetts market with new stores and changes in store policies, such as the retreat from self-service checkout lanes at Big Y stores.

Big Y, which is based in Massachusetts, is the latest grocery company to pull out its self-service checkout lanes, USA Today reports.

Operating 61 stores in Massachusetts and Connecticut, Big Y opened self-serve lanes in 2003 to speed up the checkout process and save money. But a study found that the opposite has happened. Checkout times have lengthened as customers haggle with bar codes, coupons and payment methods, the report adds. Big Y agreed that customer service was being shortchanged. The self-serve lanes will be phased out by the end of 2012 and replaced with traditional lanes, the store said.

Other grocery retailers such as Albertsons and Kroger have phased out the self-serve lanes at some stores as well.

Wegmans looks to grow in state; competition for food dollar fierce

Last fall in Massachusetts, Wegmans opened a massive store in Northborough, and has had such success that it has its eyes set on other new stores in Boston, ­according to a report from The Boston Globe.

The paper said Wegmans is looking to open a supermarket in Boston proper, referring to comments CEO Danny Wegman made to the Greater Boston Chamber of Commerce.

Wegman added that he is fascinated with the Boston market because it is the most highly educated and densely populated market the chain has ever served, but also it is a scary experience to change its successful model, the report says.

“In some ways, coming to Boston is terrifying. Going from 130,000 s.f to 70,000 s.f., you’re making an ­enormous amount of guesses,” Wegman said. “This is a big deal for us.”

Flynn said these new stores are just part of the recent supermarket activity in the state.

“You are seeing a lot of activity…(especially) ­remodels,” he said. “We have the entrance of Wegmans into our marketplace last fall, so that created a little flurry of folks responding to that. I think you’re seeing the ­ability of some people to utilize that component of it to update their stores, remodel them and try to be more competitive.

“I think the thing that everyone is aware of is that it’s not just your old traditional grocery store that you are only worried about; everyone is selling food. Whether it be either mass merchandisers or something like a Target dedicating more of their sale space to food, or the on-the-go, on-the-run mini-convenience store type operation, you are seeing more and more—everyone wants to sell food. So you have to be ­nimble and you have to be able to respond to what your customers want.

“I think you are seeing a throwback, particularly in areas where it would make sense for smaller formats,” Flynn added. “Stores can be more nimble and respond to certain niches. Also, I think you do see an awareness that the public has the health concern, the issues around obesity and other things that are trending. People looking for more fresh, local ­products.”

MFA addresses item pricing, bag recycling

To help independent grocers and chain stores alike, Flynn hopes that this July individual item pricing will be a thing of the past in Massachusetts.

“We are actually one of the only states that requires individual item pricing, where every single can of every single package has to have a price affixed to it unless it is otherwise exempted,” he said. “We are hopeful that before of the end of this session, which ends at the end of July, we’ll be able to get a waiver from that.”

Another issue grocers have had to face, and MFA has had to combat, is a potential bag ban.

Some organizations across the state wanted to ban plastic and paper bags in Massachusetts, the same way they have been banned in many cities on the West Coast. Flynn offered a plan of creating public awareness to recycle plastic and paper bags, and his plan has been a complete success.

“We went to the state and worked cooperatively. We asked, ‘Does this make sense?’” he said. “The product is not the problem. The problem is what people do with it, and what we have to do is really create an awareness. We entered into a memorandum of understanding with the state where our members agreed that we would reduce the usage of paper and plastic bags by 33 percent in five years.

“We had a dozen company members who participated in the process and reduced the usage of plastic and paper bags by 33 percent, two years ahead of schedule,” he said. “We did it in three years instead of five. It was extremely successful and extremely well received by the consumers, and the retailers stepped up to promote it and provide the education to staff and consumers.”