Progressive Grocer - September 2017 - 8
By Jim Dudlicek
Relevance in the Room
to be had for
create a new
ead enough commentaries on the future of retail, and you start wondering why anyone in their right mind
would still want to sell groceries.
But cooler heads realize that even
with the current sea change, there are plenty of opportunities to be had for traditional grocers, provided they
chart a strategic course and create a new tradition.
It's all too true that competition is fierce and
the game is changing on what often seems like a
daily basis. With so many players, there are bound
to be casualties. Most recent among them: Healthy
Home Market (HHM), a three-store natural and
organic food retailer operating out of Charlotte,
N.C., since 1979, which has put itself up for sale.
"Over the last several years, we suffered a series of
financial setbacks due to difficulties associated with
store expansions and relocations," the retailer told
Progressive Grocer's Bridget Goldschmidt in a recent
online story. "Although our current locations in key
neighborhoods continued to perform well despite
these events, even in the face of headwinds in the retail
grocery industry, we then suffered an additional -
and by far our largest - financial setback with the
opening of our Lenoir [N.C.] store this past year. Unfortunately, the Lenoir store venture was not successful
and resulted in substantial stress to HHM's finances."
Industry observers rightly note that HHM's
move is in keeping with a national trend of small
regional grocers losing share to discount grocers, warehouse clubs and ecommerce sites. Plus,
HHM's in the overstored Southeast, where it
wrangled with the likes of Harris Teeter, Publix,
Lowes Foods and Walmart, all of whom are now
coping with the arrival of Lidl in their area
as the deep-discount, limited-assortment format gains steam.
That can't be pleasant news for
Anthony Hucker, recent successor to
Ian McLeod as CEO at Jacksonville,
Fla.-based Southeastern Grocers,
whose Winn-Dixie, Bi-Lo and
| Progressive Grocer | Ahead of What's Next | September 2017
Harveys banners also vie for share in the region.
In a recent interview with PG, Hucker described
Harveys, which opened seven more stores in Florida
last month, as being the banner "best equipped to
deliver quality, service and value" to shoppers, in the
form of a "personalized shopping experience."
It's been a tumultuous time at Southeastern,
which earlier this year closed at least 20 stores
across its system while renovating others and
launching a Hispanic-focused brand at WinnDixie, meanwhile reorganizing its management
structure to better tackle the challenges ahead.
Indeed, the food retail landscape is shifting
dramatically as shoppers gravitate from traditional
stores to formats that more closely meet their needs,
according to a recent study from Long Grove, Ill.based consultancy Inmar Willard Bishop Analytics.
"By 2021, dollar share for the traditional
grocery channel will reach 44.4 percent, an
increase of 0.2 percent," the study notes. "Shares
for nontraditional grocery will drop 0.7 percent
to 39.1 percent. The convenience store channel
will have a slight increase in shares, reaching
16.5 percent. However, modest changes are often
masked by large fluctuations occurring within the
channel. For example, the number of traditional
supermarkets will decrease by 24.6 percent. This
decline is offset by double-digit growth in store
counts for fresh-format, limited-assortment and
super warehouse formats."
And, the study says, grocery ecommerce will grow
exponentially as food retailers adopt it faster than
other retail sectors have done previously, banking on
the promise of big sales across all channels and the
digital acumen of time-starved Millennials seeking
greater convenience and personalized service.
But the days of being all things to all people
appear to be over.
"The key to building market share and increasing loyalty requires one thing: relevancy," the study
asserts. "Relevancy must be reinforced at every
touchpoint along the path-to-purchase continuum
... to influence shopper behaviors. Missing the mark
in one or two areas will likely result in more 'channel
hopping,' which further diminishes loyalty."
Our August 2017 Store of the Month feature on
Lowes Foods in Simpsonville, S.C., should have listed
api(+) as the store's designer of record, with D/Fab as
fabricator and Williams Spencer as architect. PG