Last updated on February 2nd, 2021 at 12:51 pm
Consumers likely will keep associating them with safety
by Mary Margaret Stewart, staff writer
Greg Ferrara sees 2021 as “the year of opportunity for independents.” Because while 2020 brought disruption to businesses across the nation in the form of the COVID-19 pandemic, grocery came out stronger on the other side.
“Our industry overall responded incredibly well, to pivoting and to making sure that they could operate their stores and serve their communities, despite many, many challenges that existed,” said Ferrara, president and CEO of the National Grocers Association.
“I think independents need to harness what they have gained in the year 2020 in how they turn that into opportunities for 2021. If you look at a couple of different areas, in terms of strategy, how do you retain those customers that came into your stores, that rediscovered you or discovered you for the first time?
“As we start seeing communities open back up, restaurants and other entities open back up, people start traveling again, how do independent grocers retain those customers that they have earned and keep that business?”
Ferrara posed questions that independents should keep in mind as they strategize opportunities for the year ahead. But he also has some answers on how to keep customers coming back when the pandemic passes.
“Continuing to focus on e-commerce – that is an area that will be a huge opportunity for independents. It needs to be much more than just having an e-commerce solution,” Ferrara said. “How are you going to turn that into a successful, robust, efficient, effective, customer-friendly operation that will be very successful for years to come? Part of that’s going to be – I think, in terms of technology – looking for new partnerships.
“If you go back even two years ago, talking about things like micro-fulfillment centers was something that a lot of independents weren’t even thinking about. You fast-forward to where we are today, and there are groups of independents that have already implemented micro-fulfillment centers.
“There are others that are moving aggressively in this space, and I think we’re going to see opportunities for new partnerships amongst store groups and other entities to go into new ventures like this, that’ll help them improve the efficiency and the effectiveness of their e-commerce platform.”
In addition to the importance of technology, Ferrara suspects some other pandemic-related adjustments are here to stay.
“There’s a couple of areas that are going to continue to become permanent,” he said. “One – customers for the foreseeable future, I think – will be very focused on cleanliness and sanitation. As operators, you have an obligation, not only to do a good job and ensure your stores are sanitized but make sure your customers can see that and understand the investment you’re making in your store sanitation.
“Local will continue to be huge. And this is an area that we’ve talked so much about with independents – they’ve owned it. But COVID really brought a lot of consumers who I don’t think really truly appreciated local until the pandemic hit.”
According to Ferrara, appreciation of “local” is an area in which independent grocers picked up share, particularly when it came to supply challenges and perishable commodities. He noted, “They were in stock because of local relationships that they have.”
“Independents need to continue to own that, but they’ve got to be storytellers. They’ve got to tell the consumer, why they own local, why coming to that independent supermarket is where you’re going to get the most local products, the local service, the local connection. I think for some time, consumers will continue to associate local with safe.”
And while 2020 was a great year for opportunity in grocery, Ferrara cautioned that the economy still is heavily affected by the pandemic going into 2021.
“We’re going to continue to face an economic recovery that will likely be uneven, depending on different regions of this country,” he said. “There are going to be communities that were very, very hard hit, and will continue to be hard hit due to this pandemic.
“We’re going to see a consumer focus on value in those areas, and that’s going to mean looking for deals, it’s going to mean looking for private label. Those independents really need to be tuned in and focused to that customer, really ensuring that their strategy is focused on serving that customer and meeting their needs head on. I think that’s going to be incredibly important going forward.”
Ferrara also pointed to SKU rationalization as another remaining opportunity of becoming a better operator for the consumer.
“The term has been overused, but SKU rationalization will continue to be something that will be relevant to all of us,” he said. “There could be other operational changes in-store that help make us more effective and more efficient to serve our customer. Those are things that were lessons learned from this pandemic that we’ll continue to embrace going forward.”
As for NGA’s work going into 2021, Ferrara said the organization is focused on opportunities with a new administration and congress coming to Washington, D.C.
“While there will certainly be challenges with that, NGA believes that there are actually tremendous opportunities for independents specifically as we look ahead to this year,” Ferrara explained.
“If you look at issues in terms of nutrition programs, SNAP programs, incentives for some of the nutrition programs that are out, there is a lot of work that NGA has done in this space to benefit independent community grocers. We believe that there will be continued opportunity around these areas.
“We also are going to continue to work on addressing the issue of power buyers. COVID has really laid bare the challenges that exist in the supply chain. We do believe that there are power buyers in this country that are using their influence in a negative way.
“That has impacted local communities, rural communities, urban communities, independent stores and regional chains. We think this is an area where policymakers really need to look at the antitrust laws and make a determination of whether there has been unfair activity that has been occurring in terms of supply. Those are the areas where we’re going to be spending a lot of time in 2021.”