AlabamaGroceryJan2017Final

that’s the easiest thing to do. As a result, most will be disrupted by outside forces and will end up in trouble.” For more than 100 years, consumers relied solely on supermarkets as a source for groceries, Stephens said. “Consumers had very few other options, and they depended on supermarkets to provide access to brands and products,” he added. “And if there was something the local grocer didn’t carry, then the consumer was out of luck.” But with the advent of online shopping options, that approach is unlikely to remain appealing for much longer, Stephens said. “Every supermarket retailer today must look at his business with fresh eyes and ask what value he is bringing to the table or adding from manufacturers. “Selling groceries is a very product-centric business, and companies live and die by tenths of a percent in profits, which is a precarious position to play from because it doesn’t afford much wiggle room to be highly creative. It leaves everyone living on the razor’s edge. “But someone has to step up and say they will create a store that’s more about the experience than the food.” Online selling is a competitive reality that isn’t going to disappear, he pointed out. “Right now it’s Amazon against the world. Amazon’s market capitalization is higher than Walmart’s, and grocery sales are rising 20 percent a year, whiles sales at the average supermarket are up just 1 percent, 2 percent or 3 percent annually. “With 60 percent of every incremental dollar spent online going to Amazon, Amazon is not only massive but dominant, and with consumers willing to buy anything online, its grocery sales will continue to grow rapidly.” Changes in the way most supermarket operators think are likely to occur gradually, if they occur at all, Stephens said.

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“I’m talking with some companies that are considering doing new things or working on innovation. Whether or not they can come up with a new grocery model with a strong entertainment value within the next couple of years is debatable, but within five years, most grocers will realize they can’t make money unless they create something unique and different from what they’re doing today.” Companies don’t need to launch experience- focused stores on a chainwide basis in the short term, Stephens said, “but they should be experimenting at test locations, the same way Amazon is testing brick-and-mortar stores. Innovation matters.” Stephens said the most important skill for any business, particularly grocery stores, is continuity, adding that all companies have creative people within their organizations that are assets and must be utilized. “What supermarkets should be doing is testing innovative stores and understanding who their creative people are because they will need a ton of creativity going into the next decade,” he concluded. ■

Editor’s Note: Elliot Zwiebach was a reporter with Supermarket News for more than 47 years.

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