Leveraging Our Voice

Aug 28, 2019

JR_Headshot

John Ross
IGA President & CEO

It's easy to feel helpless. Every day we come to work to find more barriers, more competitors, more predators nipping at our heels. Rising wages, lack of available labor, credit card fees, injustice in pharmacy benefit management (PBM), mistakes in the tax code that hurt our ability to invest capital in our stores…the list can make your head hurt.

And yet we live in an age where shoppers are more passionate and more concerned about food, health, and wellness than at any time in recent memory. American consumers want to eat smarter, and make better choices for their families. And increasingly, they believe their local retailer is better positioned to help them win than national chains.

That’s right, 60 percent of shoppers think that local retailers are more like to sell the good stuff—like food that nourishes and nurtures their family—than national chains.

If shoppers are increasingly on our side, but regulators aren’t, we won’t be able to take advantage of all the opportunities coming our way. Many of these issues are driven by policy in our own state and national legislatures, and it can feel like our policy makers aren’t in our court.

Last week I was in Washington, making the rounds with NGA to visit members of the Senate and the White House. Our message? Local retailers, who do so much for their local communities, are being squeezed and we need to rebalance the system.

We asked these powerful lawmakers what they think a retail grocery store earns in net profit. And of course, some were stunned to learn that the grocer is paying credit card companies more per transaction than they make on the entire sale. Shouldn’t we have a seat at the table to break monopolies apart? Shouldn't we be able to bid processors against each other to lower costs to us and ultimately the shopper?

We asked them to imagine getting a bill weeks or months after shopping our store, charging 4-10 times what they thought they paid for groceries. They were stunned to hear that the PBM machine allows pharmacies to be hit with increasing direct and indirect remuneration (DIR) fees, yet no way to challenge them, negotiate them, or reduce them.

We talked about other issues too, like the impact of protracted trade wars on local farmers. It turns out the food business, from supply to retail, is a critical part of local economies. And it turns out IGA has a big voice in Washington.

I spent some time with the new president and CEO of NGA, Greg Ferrara. Like us, he started out life as a retailer. Unlike most of us, he is knowledgeable about how Washington works, and knows how to get our message onto the table and moving through the system. Greg and I stood for a picture in front the Capitol building. For me as a retailer, the process of legislation and lobbying is arcane and amazingly frustrating. But with partners like NGA, FMI, and our state associations, I have learned that we have collective clout in your voice. I have seen how we can get stuff done—like the recent Supreme Court win protecting our store data by public entities looking to dissect SNAP.

So, I congratulate Greg on his new role; but I challenge you, the IGA retailers, to make sure Greg and the entire team are working on the issues that matter to you. We do have power, and we can get things done, but only if we leverage our collective independent identity to work as a whole.

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