The National Grocers Association (NGA) has released a white paper arguing that "big box stores and e-commerce giants have used their influence during the pandemic to further disadvantage independent grocery stores and the communities they serve through economic discrimination.
Here's how NGA frames the issue:
"NGA represents more than 1,600 independent grocery retailers who account for nearly 9,000 store fronts across the country, including at least one in every congressional district. These stores and their independent wholesalers play a crucial role in American communities. They compete to offer low prices, higher food quality, better service, more accessible and convenient locations, a greater variety of products, and good jobs.
"But independent grocers have watched over the years as dominant chains ignore antitrust law and abuse their buyer power to demand suppliers provide lower prices and more favorable supply terms, special package offerings and product availability, leaving independent grocers to pay the price.
"In light of the pandemic’s supply chain disruption, NGA members are feeling the heat more than ever. Walmart alone captures one out of every four dollars Americans spend on groceries. Meanwhile, independent grocers are unable to secure many of the must-have products and face supplier prices up to 53 percent higher than what their larger competitors are selling the product for at retail.
"This isn’t just bad for independent grocers; it’s bad for their customers, who are often people of color and people living in rural areas who are forced to pay higher prices or travel farther distances to get the staples they need. From 2005 to 2015, the number of independent grocery stores available in rural and minority communities has increased, while access to big chain stores has decreased. "
"Congress has to stand up for local businesses and consumers to demand an end to these harmful tactics and restore a competitive marketplace that benefits the economy and grocery shoppers alike," argues Greg Ferrara, NGA's president-CEO.
NGA is calling for congressional investigations and hearings that would "shine a bright light on anticompetitive practices in the grocery sector - with a particular focus on the discriminatory impacts on rural and urban consumers, producers, and businesses … Congress should use its inherent oversight and authorization powers to hold antitrust enforcers accountable if they continue to fail to take steps to check retail buyer power and its harmful effects … The antitrust laws provide the tools enforcers need to curb discriminatory practices by dominant retail chains. However, if existing court decisions prove too high a bar to more vigorous enforcement, then Congress should step in to restore the original purposes of the antitrust laws. "
NGA goes on: "The FTC, DOJ, and state attorneys general should investigate the arrangements between grocery power buyers and suppliers to determine the extent to which dominant retailer bargaining leverage is imposing discriminatory prices, terms, and supply on independent grocers."
- KC's View:
If indeed the big box stores have been ignoring and violating antitrust law, then there ought to be enforcement. But, not being a lawyer, I'm not sure where being able to get better prices and availability through higher volume ends and antitrust begins.
But … I do find myself wondering how many independent grocers are as hampered as much by lack of vision as by lack of size and resources. There are a lot of independent grocers that have risen to the occasion during the past year, innovating as never before and charting a new path for themselves that builds on traditional strengths and embraces customers' behavioral shifts. But there are also some that have not - that yearn for days gone by and a return to the way things were.
Things never will be as they were. There is no backward … only forward … on the retailing vehicles that will succeed in the future.