Interviews with Grocers
A series of interviews with area grocery store managers reminded us that shifts in the grocery retail market have been occurring on a number of fronts—and for existing stores the changes have been continuous. These conversations highlighted the importance of recognizing that changes in the marketplace are not limited to the 2018 Kroger closures. It also revealed how some of the previously discussed national and global pressures are felt locally.
Below are takeaways and quotes that highlight the recurring themes raised by the grocery store managers in the interviews conducted during the Fall of 2018. The stores were a mix of local independents and national chains, but they shared many sentiments concerning both their challenges and opportunities.
The process of interviewing business owners and managers to discuss opportunities and challenges is often practiced by economic development organizations with larger employers that comprise a region’s economic base. Business Retention and Expansion programs are used to assist businesses and ensure their sustained success. Adapting this practice more regularly to food establishments and grocery retailers should be considered as part of the strategy to improve food access by retaining and expanding existing businesses.
It’s not just about the numbers
We heard repeatedly from managers that we spoke with about the importance of community involvement. Store loyalty is hard to come by and grocery store operators are aware of the need to do their part as a member of the community. According to one of the independent grocers:
The community is a key piece of this location…people grew up in this neighborhood and are buying homes, staying a tight-knit community looking out for one another.
With this culture of community connectivity comes customer loyalty to the store that is reciprocal for organizations. Everyone working for the benefit of the whole contributing to scouts, fire department, etc. Building community is a continuous practice.
Location is as critical to small independent grocers as to the national chains
Every manager interview discussed the importance of store location, surrounding amenities, and neighborhood features as part of their business success. Retail, especially restaurants, coffee shops, and farmer’s markets, were mentioned as complementary businesses. One of the grocers said:
This central location attracts a diverse clientele base. Through the week and during the summer the farmer’s market complements the business very well.
When nearby retail vacancies occur, it creates a good deal of concern for grocers. Although the retail “apocalypse” mentioned earlier has not directly impacted grocery stores in quite the same way as consumer goods, the impact is still felt by grocery stores as vacancies reduce foot traffic and and shopping centers fall into disrepair.
Grocery operators were also aware of commuters and recognize that their customers may live within a 30-45 minute drive. Depending on a store’s location, some may have a greater advantage for drawing in daytime commuters who shop before returning home from work.
Managers stressed the importance of workforce care
The participants recognized the value and importance of jobs to youth and families. As many youth are helping with expenses at home, they want to make people's lives better. Investing in training will provide greater opportunities for their employees as well as support sales growth. There is a great deal of strength and talent in our grocery retail community, as most all of the businesses interviewed had more than five years of business experience and several of the small grocers were generational businesses.
Theft is a challenge to manage
Some stated that retail theft is one of the greatest challenges to overcome. Following a low-risk model, some managers avoid stocking high-theft items such as health/beauty, liquor, cigarettes, and formula. One of the participants commented:
Conditions of unemployment, poor housing, education levels are all contributing to issues of theft. I am often surprised by what they steal. There is good police support, but they do not often catch theft.
Empathy For Struggling Families
Managers were all quite empathic to individuals situations. As one participant stated their belief that a lot of theft in their store is committed by people suffering from hunger and that they worked closely with social service agencies to see that families get the assistance they need. Some stores have added affordable food bundles that help to make a family’s food dollars go further.
SNAP & WIC Widely Accepted but Adds Challenges for Grocers
All of the managers interviewed accepted Supplemental Nutrition Assistance Program (SNAP) and other forms of public assistance the percentage of customer base utilizing food assistance programs ranged from 5% to 20%, with the majority of respondents indicating between 0 and 10% of customers.
Of concern was the timing of monthly disbursement of SNAP benefits. For the two weeks surrounding the release of SNAP funds, grocers mentioned the need to increase stock and staffing significantly, while the remaining two weeks in the month required a reduction in staffing and invetory. This especially impacts operations for small independent grocery stores.
Food assistance support provided by Women Infants, and Children (WIC) presents much greater challenges for store managers and some stores have stopped working with the program because they were not always able to meet the reimbursement requirements due to the strict product guidelines of the program and constant changes in product packaging.
an awareness of consumer trends and and interest in technology and innovation
Some of the larger stores interviewed emphasized current or future projects to fund technology and infrastructure upgrades and to create alternative revenue streams with online shopping. Although only a couple of the managers interviewed indicated online shopping as a significant portion of their store’s current revenues. A 2018 Nielsen report for the National Grocers Association indicated that only 11% of those interviewed shopped for groceries online, but of those purchases 76% chose the store’s delivery option.
All were aware of increased demand for health-conscious and specialty food items (local, organic, restricted diets, etc.) and an increased interest in food ingredients and sourcing. Some were actively offering prepared foods and meal kits and looking toward models similar to Blue Apron, a company that delivers prepared meal kits to a customer’s home.