Alabama Grocer 2023 Issue 3.indd

INDUSTRY NEWS

IT'S A WORLD OF CHANGE

Michael Sansolo Retail Food Industry Consultant DO NOT RISK COMPLACENCY AND THE IRRELEVANCY THAT COULD FOLLOW

Alabama’s love for football is well known thanks to the state’s extremely successful main university. (And not to annoy anyone, but Auburn isn’t bad either.) However, there was recently a development at the professional football level that sends a strong reminder to the supermarket industry in Alabama and everywhere that change is the only constant and evolution is essential. Saquon Barkley, arguably one of the best running backs in the National Football League, recently signed a new, one-year contract for $11 million, but that’s only a small piece of the story. In decades past, Barkley would have likely received much more money thanks to his proficiency at one of the most important positions in the offense. Only that day has passed. More than ever, running backs like Barley are seen as unworthy of massive multi-year contracts due to their likelihood to suffer injuries and frankly a large supply of acceptable replacements. In fact, according to various reports, running backs now get paid only slightly better than punters, hardly the company they want to keep. Why does this matter to you (no doubt you are already wondering)?

It’s simple: the world keeps changing; what people value or don’t value keeps shifting; and if you don’t keep evolving with those changes, you and your business can be irrelevant really, really quickly. Think for a second about basic supermarket advertising. For years, the main medium was print newspapers, especially for coupon circulars. But increasingly newspapers are less and less important, especially in print format. People are dropping subscriptions at an alarming rate and it’s hard to find young adults who think newspapers are a source of anything essential. Instead, many people now get their news through social media sites like Facebook and TikTok. So if your company still relies on traditional media you need to at minimum ask a lot of tough questions of your team because your traditional advertising might be completely invisible to the younger generations of shoppers. Likewise, the value of items in the store keeps changing. More than ever you need to examine how to provide convenience and ease to time pressed shoppers. It’s not a new trend, but it’s still a huge trend.

The Wall Street Journal recently reported on what it sees as long overdue changes and threats for supermarkets. The Journal outlined how traditional operators continue to lose market share to clubs, supercenters and discounters. As the Journal pointed out, those other formats all have built in advantages the supermarket lacks. For example, clubs have membership fees to provide an additional source of revenue and both clubs and supercenters sell a broad variety of profitable non-food products that give them the ability to reduce prices in traditional groceries. The explosion of limited assortment deep discounters creates a different challenge thanks to their reliance on private label products to give them a competitive price advantage.

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