Moving from Worry to What Works

By: Leslie G. Sarasin, President and CEO, Food Marketing Institute

I have a confession to make. It bothers me that the most popular feature in FMI’s Food Retailing Industry Speaks report is the section dubbed the Worry Index. As a good-news oriented, lets-find-the-opportunity–here kind of person, it troubles me that the piece of FMI research posed for annually providing a snapshot of the state of the food retail industry tends to focus on concerns and apprehensions.

Some may argue it makes sense that the Worry Index has been the characterizing feature of a piece capturing the essence of food retail, because food retailers can be construed as a nervous lot. They are always questioning, always pondering and always scrutinizing what they should do to enhance operations, offer better customer service and improve margins, and to many that equates to worrying. However, rather than excessive worriers, I have always found food retailers to be a creative, positive and progressive lot and those qualities just aren't captured in a focus on the industry worries.

Others may argue that in recent years a focus on the worry index has been appropriate. The past decade has seen unprecedented change in and to the food retail industry. Food retailers have had to pick up the pace of modifying operations to remain competitive and have had to learn to adapt faster to keep up with consumer trends. And change -- even if it is self-generated -- tends to raise the anxiety level, so perhaps a worry barometer has been strangely fitting.

All these reasons make it even more significant that the 2018 version of the Food Retailing Industry Speaks initiates a significant move from the Worry Index to a reconfiguration that we have titled, Food Retail Pulse. In analyzing the data from the questions that historically contributed to the worry index, we found this year that as many factors potentially contributed positively to sales and profits as there were factors negatively affecting the bottom line. Topping the downside of the ledger (qualities with a largely negative impact) were some old familiar friends, including cost of health care benefits, interchange fees, energy costs, competition from traditional, online and non-traditional sources and upward wage pressure and ability to recruit/retain employees. These, however, were offset somewhat by the strong opportunities recognized by retailers on the positive side of the balance sheet. The industry is showing a strong pulse in the following areas:  health and wellness proposition, food as medicine trend, strong local/national economic outlook, consumers' changing consumption patterns and shoppers' demand for transparency. 

Shoppers recognize food retailers as trusted allies in helping them achieve their health goals, so it should be no surprise that the two categories with the most positive promise concentrate on the retailer’s role as a curator of healthy products and health information. Retailers recognize the opportunity to shine in the snack category by paying attention to the consumption trend away from three square meals a day and toward smaller, more numerous snack opportunities. And truly savvy retailers are finding a real sweet spot where helping with health goals overlaps with providing more snack options. Rounding out the top potential growth areas, retailers are recognizing that shoppers’ expectation, hope and request for transparency holds a real opportunity for building loyal customers by providing them with clear, accessible information regarding the products they buy.

I cordially invite you to join me as I elaborate on these factors and share more good news about the food retail industry when I present our Speaks findings in a webinar on October 4 at 11 a.m. Click here to register for the webinar.