There’s nothing so powerful as data points that serve as wakeup calls. These were presented at FMI2012 in Dallas last week by Leslie Sarasin, the association’s president and CEO.
• Only 64% of shoppers, the lowest percentage in years, chose conventional supermarkets as their primary shopping venue, according to FMI research.
• In 2010, online shopping represented $12 billion of sales of consumer packaged goods, and by 2014 that number is expected to more than double.
• Traditional grocery stores haven’t been adding square footage, while supercenters, dollar stores, convenience stores and clubs have added 150 million square feet since 2005.
Those nuggets of information prompted discussion at the conference about steps the industry should take to reignite growth and recalibrate for a changing consumer. Self-examination is a good thing, especially when the solutions point to differentiation and innovation.
“Price isn’t a strategy to grow your business in the long term,” said Thomas Blischok, chief retail strategist at Booz & Co., who moderated a session here on collaboration.
Another urgent topic was the growing impact of digital and social communications and how retailers can join the party. That topic was addressed at a conference session with its own set of data: There are 30 billion Facebook status updates a month, 5.3 billion video views in a 24-hour period on YouTube, and 340 million tweets published on Twitter in a single day. Breaking through this clutter isn’t easy but will be increasingly important for retailers and suppliers, said Shiv Singh, global head of digital, PepsiCo.
The talk at FMI2012 wasn’t only about challenges for retailers. Attendees said the strategy of co-locating other events in Dallas, including FMI’s Private Brands Summit and United Fresh 2012, produced a more diverse experience.
Not surprisingly, one of FMI2012’s signature elements, the first-time Supermarket Chef Showdown, injected a culinary feel and was a hot topic of conversation both on the show floor and in the twitterverse.
FMI saved one piece of news to reveal last week to positive buzz. The next installment of this event, in 2014, will mark a return to Chicago, the longtime home of the trade show. At a time when the industry is dealing with all kinds of changes on the customer and competitive fronts, the prospect of returning to the Windy City for an FMI show seemed like just the right mix of nostalgia and excitement.
Many supermarket operators are big proponents of the role pharmacists play in stores. So it’s surprising that a contentious debate is now raging about how much value retail pharmacists bring.
Late last month the National Association of Chain Drug Stores blasted the CEO of pharmacy benefits manager Express Scripts, George Paz, for “comments that disparage pharmacists.”
In a conference call with analysts, Paz had remarked about the end of a contract with Walgreens, which had filled Express Scripts prescriptions, according to an AP story. “At the end of the day … Nexium is Nexium, Lipitor is Lipitor, drugs are drugs, and it shouldn’t matter that much who’s counting to 30,” Paz said.
NACDS responded in a press release that pharmacists would be outraged “at any incorrect and derogatory suggestion that they merely count pills.” The association said Paz’s statement evokes remarks last fall by David Snow, CEO of Medco, another PBM, who, according to trade press reports, dismissed the notion that retail pharmacists engage with customers and contended that Medco’s “robots” are “23 times more accurate” than human pharmacists.
It’s amazing this topic is being raised at all given the positive impact pharmacists are having in stores. Consider that Meijer has placed a diabetes care pharmacist in every store. Consider that Piggly Wiggly South Carolina has featured grocery items at the pharmacy counter with signage encouraging shoppers to discuss health benefits with pharmacists.
A crucial factor fueling this debate is the proposed merger of Medco and Express Scripts, a deal that would create a giant PBM. This combination is opposed by NACDS and organizations including Food Marketing Institute. FMI has contended the merger would destroy competition.
Let’s put aside the merger topic for now and recognize pharmacists are playing an important supermarket role.
But this isn’t just about pharmacists. Supermarkets should further enhance and promote a wide range of in-store roles — everything from dietitian to produce clerk — to improve service and make it harder for anyone to question the value of the in-store experience.
If customers view these and other roles favorably, it will be more challenging for anyone — from a pure-play online retailer to a nontraditional food retailer — to downgrade the supermarket experience in making a competitive pitch.
That’s a prescription worth trying because it goes to the heart of defending the viability of supermarkets in a shifting landscape.