by Mary Margaret Stewart, staff writer
CEO David Smith “could not be prouder” of his team at Kansas City, Kansas-based Associated Wholesale Grocers for their efforts throughout the COVID-19 pandemic.
“We just feel so blessed, and I give all the credit to [them],” Smith said. “I think that recognizing the importance of understanding our role in trying to keep America fed – that motivates good employees. And they take those roles seriously in knowing that if they didn’t come into work, they knew others were relying on them.
“Amazingly, year over year, for all of this period of time – March 11, all the way through Sept. 20 – our absenteeism has been less this year than it was last year.”
And they needed all hands on deck. Business just ran away from the folks at AWG, said Smith, with retail sales up more than 100 percent in mid-March and staying between a 60- and 70-percent increase for a while.
“Since this pandemic started, the craziest thing is that our member stores have been up 50 percent or more, greater than the rest of the market. When our stores were up 100 percent, the rest of market was up 50 percent. I’m generalizing, but that’s the trend that we’ve seen…week after week.”
Independent grocers also have had an advantage in this crisis, Smith said, because they had not centralized a lot of operations when chains did, making them much more nimble. “We were positioned to be able to deal with it, and we were able to stay in business when they were initially wiped out. I think that helped us a lot.
“I also think that independent grocers were ideally situated because they did a lot of things locally. Where they cut their fresh meats, for instance – in-store. As we moved into May, our stores were buying the very first cuts of meat without having to go to these big massive manufacturing facilities, like those retail chains.”
Part of being prepared for the demand was some behind-the-scenes work on AWG’s part.
“By the third week of February, we had a [cross-functional] COVID-19 Task Force that covered representation from all of our areas of operation,” he said. “They had to get up to speed on monitoring and figuring out how the virus was beginning to spread and its implications.
“Since we had ties to IGA in China, we were already getting on conference calls and having discussions with people in Europe and in Asia about the virus.”
By about March 15, AWG reached out to friends in the foodservice distribution business, knowing that foodservice at retail would be shut down, causing a surge in grocery sales.
“I reached out and said, ‘Hey, I know this is a difficult time for you. The worst thing that either of us can do is lay off a bunch of people…why don’t you keep them on the payroll, and let us just reimburse you and have it like contract,’” he said.
“We got about 1,000 people that came into our warehousing operations to help us as that business backed up, and that was such a wonderful thing.”
If COVID-19 was a business competition, Smith said the independents won.
“When COVID first came up, one thing that stuck with everybody is stay away from crowds. What was most crowded? Well, Walmart, Kroger – the large chain grocers,” Smith said.
“When customers start thinking about someplace safe to shop, it makes good sense to go to the local family business…they’re going to make it safe enough for their own family, and safe enough for the consumers.”
As for the future, Smith doesn’t see things going back to pre-COVID, in the grocery realm or elsewhere, with perceptions of safety changing forever.
“It could be 2022, easily, before we can say that the world has been rid of the COVID-19 virus,” he said.
“I believe it’s changed us, and I think that the way that we’re going to plan our stores and how we’re going to plan business is going to be based on that new reality that’s with us. I think ongoing concerns will stick with us for an entire generation.
“We’ll have something else that will come again, and we don’t know when that will be. But I believe that we’re changed forever, just like we were changed as a result of what happened on 9/11. It exposed the vulnerability that we didn’t even know we had.”
Luckily for Smith, he’s been able to lead AWG through unprecedented times with the help of a support system in ROFDA.
“The history of ROFDA is strong. It’s been a great thing for many, many years,” he said.
“As one of the companies, I hope that I’m able to bring more than I take. If all of us have that same attitude, that then reduces the burden on each one of our individual companies to have to solely come up with innovation, to have to solely come up with our own solutions.
“We find that our respective companies all face similar challenges at different times and varying severity. It is much more efficient and effective when we share our individual solutions and others reciprocate. This solves things faster and with far less effort for each individual company.”
As for what’s in the pipeline for AWG, the wholesaler is going digital and offering a more localized e-commerce option for independents.
“It’s no longer cost effective or affordable for our members to use third-party platforms, like Instacart, so we found ourselves in this spot where we had to re-evaluate,” Smith said.
“Our goal is to come up with one platform that we can get behind and build very enhanced capabilities…our goal is by Nov. 1 of this year. We will have chosen a digital partner, and we will start transitioning them away from those third-party companies and shift them to the platforms where they own that customer transaction and data.
“Our independent retailers need a way to continually get more price competitive, because the big companies are getting bigger, and they’re continuing to increase scale. We read every day about big companies and different pressures they’re placing on suppliers to try to dominate markets and dominate everything else.”