Editor's note: A previous version of this article was originally written for The Shelby Report.
Life as an independent retailer is tough right now. Really tough.
We're entering our second year of the pandemic. Grocery retailers and their teams are overworked and understaffed. Supply chain woes make it seem like we are increasingly at the tail end of the inventory feeding trough—nothing is more frustrating than your weekly supply coming up at 65 percent of what you need, week after week.
There's inflation, climbing 6.2 percent in October over last year—the steepest rise in 30 years—resulting in increasing costs in labor, insurance, and energy.
Then there's the dark and scary world of cybercrime. If you attended my speech at The NGA Show in September, you heard me discuss this growing threat as we created hacking emails live on stage, showed off hardware that could easily plug into your system and take control of your POS, and showed how the organized world of cybercrime is turning its dark eyes on small-format retail. (Of course, we also shared ways to harden your systems and train your teams to dramatically lower your risk, too.)
And the most challenging may be the long list of regulatory and governmental policies that make running a viable family-owned business more difficult. Most recently, it's OSHA's COVID-19 Vaccination and Testing Emergency Temporary Standard (ETS), which, while good-intentioned, could put even more strain on independents as we move into the busy holiday season.
We've been here before.
Overall, the list of things that challenge small business owners is long—and appears to be getting longer. And yet, is it really anything new? Think back to when you first started, or when your parents or grandparents first started. Were those years truly better?
Was there any time where you told yourself, “Wow this is a really easy job!” Was there ANY time where it didn’t seem like you were fighting against bigger, better funded competitors? Wasn’t there always a governmental issue, an inventory issue, an argument with the city council? Was it ever truly any easier?
Not in my lifetime. Every year is always harder. Challenges come and go, and the things we once worried about (Walmart logistics, category management, new POS, mobile marketing, etc.) become a part of our daily landscape.
Think about our big box competitors. IGA was formed by 60 wholesalers almost 100 years ago because they were afraid of the growing threat of a national chain called A&P. Then Walmart came into small town America in the 1970s and transformed small format retail forever. Today independent owners in the grocery business list competition as encroaching dollar stores; predatory commodity pricing by the Euro retailers like Aldi; and emerging tech vendors selling more and more grocery like Amazon.
We can beat big competitors.
And those big guys? They worry, too. Once you get big, you worry about the cost of growth, about feeding the public market with Year-Over-Year performance metrics, about building new stores without cannibalizing others. You worry about being a target for regulatory change, for unionization. And you worry you can’t figure out a way to be more local.
That’s right, every big grocer in the U.S. has prioritized being more locally focused—this year, last year, a decade ago—all of them have tried to do what we do. But for the most part, they fail.
Why? Being local is expensive. It requires customization of their assortment, their advertising. It means celebrating uniqueness in their stores. Terms like “custom" and “unique" sound good in a strategy meeting, but they are expensive to implement when your entire big box competitive advantage is efficiency and scale. And every one of their chief merchants will tell you that they can’t figure out a way to beat a well-run independent.
When I was with Home Depot, we tried and failed to beat Ace Hardware. We even built our own version of those stores, called Villagers. The stores were amazing, they had great sales, but they weren’t accretive to overall sales. We couldn’t figure out how to get bigger by doing better smaller, and so we closed them. Walmart did the same thing.
We have a long list of challenges in our business today, but dealing with challenges is where independents excel. IGA evolves, changes, and grows: 2021 will be our biggest year ever, on the back of over four years of incredible growth. A&P is gone. So are dozens of other bigger chains that grew and floundered and retrenched. For any independent, we survive because we are really good at dealing with the latest scary thing. And then we do what we do best: focus on quality, customer service, taking care of our associates and customers.
I am sure there will be a new list of challenges to tackle in 2031, or 2041. And whatever ever they are, they will be worthy of attention. But what won’t be different is our resiliency, character, and connection to the community. As always, with our partners, brands, wholesalers, and industry associations, we will figure out the way.
No Comments Yet
Let us know what you think