Published on: May 11, 2011by Michael Sansolo
DALLAS -- Billed as focusing on leadership for tomorrow, the Food Marketing Institute (FMI) Future Connect conference began yesterday with a heavy dose of education in management skills and a look at the challenges that will face the supermarket industry and its leaders in the very near future.
FMI CEO Leslie Sarasin highlighted the opening session with the presentation of the association’s main research reports examining the state of consumer trends and industry performance. Sarasin focused on a couple of key areas of challenge and change:
• Food safety, where consumer confidence is growing, but remains fragile. While confidence is at its highest point in seven years, consumers remain suspicious of foods imported from many parts of the globe. Sarasin talked about the need for the industry to stay on top of this issue by using technology like social networking to improve communications with shoppers, who admit they may be the main cause of food safety problems.
• Economic issues continue to dominate industry worries even while consumers seemed to be easing on slightly bargain hunting. Industry executives, however, aren’t so optimistic with almost equal percentages predicting improved and reduced conditions in the year to come, especially as concerns on inflation grow. It’s clear from some statistics how price conscious shoppers have become. Some 60% of shoppers say their primary store is not the one located closest to their home and 74% says price remains the main driver of their shopping decisions. What’s more the number of shopping trips made each week has dropped to 1.7, down nearly 0.5 from past years, with some shoppers now making only one trip each week. And when they make those trips, 46% of shoppers now use debit cards and another 30% use credit, highlighting industry concerns about interchange fees charged for those transactions.
• Economic pressures are dampening concerns on health and wellness, but as Sarasin pointed out, this is only due to the sky-high concerns about the economy. She urged the entire industry to keep up education efforts on nutritional information to serve consumers who believe meals made at home are both more nutritious and more economical.
• Societal issues provide both challenges and opportunities, she said. Retailers are finding increased interest among shoppers for locally sourced products and for a growing percentage of “green-minded” shoppers environmental attributes can tip the balance in favor of a store or product. In addition, the growing use of social media provides new opportunities for linking to shoppers and creating community centers on line. One social issue that remains a big concern is health care, with vast majorities of retailers reporting higher costs in 2010 and predicting more of the same in 2011.
Sarasin’s challenges were amplified by Dan O’Connor of RetailNet Group, who provided an industry outlook for the next decade. O’Connor highlighted key challenges facing retailers including demographic shifts such as the aging of the population, increased urbanization and the growing use of Internet-based commerce. All these forces, he said, promise to heighten current levels of competition and force retailers to examine new formats, new strategies and new market solutions to remain successful and relevant. O’Connor said many of the changes facing retailers in the US are found in industrialized countries around the world and emerging urban formats in areas like Germany and Latin America are worth studying for clues to the future.
O’Connor said continuing economic pressures weigh heavily on the vast majority of US shoppers, which will lead to greater pressure on value shopping and pressure on profits and sales growth.
Industry outlook didn’t dominate the entire day at Future Connect however. The pre conference program began with a range of sessions examining supermarket financials, hiring practices and highlights from the previous edition of the conference in 2009. And the general session kicked off with an upbeat and emotional presentation by conductor Roger Nierenberg, that featured members of a symphony orchestra seated within the crowd. Nierenberg used the metaphor of a conductor to talk about the importance of leadership, the need for communication among teams and even the challenge of tying together disparate talents to create beautiful results.
In other news from Future Connect...
FMI has launched an online petition in support of debit swipe fee reforms enacted by Congress last year, and is “strongly” encouraging members to sign the petition and also share this initiative with any associates, members or contacts who support FMI’s debit card fee reform efforts.
According to FDMI, the petition will eventually be shared with members of the U.S. House and Senate. Given the ongoing potential for Senator Jon Tester (D-Montana) to push for a vote on his amendment to delay the debit card fee reforms, FMI want to gather signatures as quickly as possible.
The petition can be found here .
FMI Future Connect runs through Thursday.
Michael’s View: In the interest of editorial transparency, let me get a few things out of the way. In my past role as a senior vice president with FMI, I worked with the committee that created the original Future Connect in 2009. In addition, in my work with the Coca-Cola Retailing Research Council, I was part of one pre-conference presentation and I’ll be serving as a moderator for one of the education tracks.
Beyond that, one optimistic observation must be made about this year’s conference. If Future Connect is truly about future leaders, the demographics of the group deserve some comment. While there are no statistics on this, it is apparent that the percentage of women and people of color in the audience are both up sharply from 2009. In many ways, that’s promising for the relevance of the industry.
As O’Connor pointed out in his presentation, the US is becoming increasingly diverse and the rise of a more diverse generation of leaders seems perfectly in line with that.
Apparently, things do change.
- KC's View: