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The New Generation of the Grocery Industry

Author: Peter Larkin
Peter LarkinJuly 14, 2014

A message to IGA retailers from...
Peter Larkin 
President & CEO
National Grocers Association (NGA)

The National Grocers Association (NGA) is the national trade association representing the retail and wholesale grocers that comprise the independent sector of the food distribution industry. Today, NGA's Peter Larkin shares insights about the future of the grocery industry.

As the new generation of sons and daughters take on leadership roles in the family supermarket business, they will face an array of different challenges and opportunities than their parents. Here are five likely trends that will impact food retailing in the years ahead:

1. SOCIAL MEDIA will continue to transform customer service by making the relationship much more direct and real time, creating many new opportunities for savvy retailers to connect with their shoppers. However, operators who don't embrace social media or don't respond quickly may suffer. According to a 2013 survey of customer service in mid-sized companies by Dimensional Research, more than half of consumers surveyed said they would stop buying after a bad service interaction. Even worse, a negative customer service experience can quickly go "viral" in a digital blink of the eye.

2. BIG DATA, effectively harnessed, will provide unparalleled insights for retailers who want to improve their decision-making capabilities. "Big data" will help clarify consumer buying, cooking and shopping patterns, while also improving core business operations (such as new store location choices, layouts and service touch points).

3. COMMUNITY ORIENTATION will help independent grocers compete against "lifestyle" venues like Starbucks by reimagining their stores as community hotspots where consumers can shop, eat, bank and socialize with free Wi-Fi access and similar amenities. Service in these stores may well include shopper assistants to help consumers with cooking tips, nutrition advice and personalized checkout. Food stores could become the place where people will want to congregate.

4. CULTURAL & ETHNIC DIVERSITY will continue to transform product selection and variety to embrace more varied tastes and cultural/ethnic choices. The new generation of food retail leadership will staff their stores with people fluent in Spanish, Mandarin or Korean; certainly their store shelves will cater to an increasingly diverse consumer profile with much broader and more varied choices. Advertising and marketing efforts also will reflect this trend with bi- (or even multi-lingual) print, electronic and digital formats.

5. BACK TO THE FUTURE FORMATS will include smaller, more intimate formats and may even include repurposed buildings in the central core and inner neighborhoods of increasingly large cities. As the United States continues to become more urban, with retiring baby boomers and young Millennials opting to locate in densely populated, close-in neighborhoods, opportunities will expand for nimble-minded independents to profitably mine this rapidly mushrooming trend.

In the face of these new changes, the development of next generation of industry leaders will become even more important to the independent supermarket industry. Through its Share Group initiative, NGA has created a Next Generation Leaders group, which provides a platform for high potential executives, who are poised to assume a significant leadership role in their organization, to discuss the challenges and opportunities of leading a family-owned business. These rising executives, sons and daughters of current CEOs and owners, participate in high-level strategy discussions as well discuss leadership development opportunities.

Our members understand that leadership and training programs will be critical for the growth of the next generation, and NGA is working to provide those resources and opportunities for grocers to invest in their future leaders. To learn more about NGA Share Groups, or these other opportunities, please contact NGA at 703.516.0700. 

Peter Larkin