FMI 1998 ANNUAL CONVENTION

CHICAGO -- Food-stamp reform -- coupled with the strong economy -- has taken nearly $400 million worth of food stamps out of the system each month, according to the Food Marketing Institute.The Washington-based FMI repeated its call for members to get involved in crucial government issues like food-stamp reform, electrical deregulation and the minimum wage, which affect supermarket sales and operating

CHICAGO -- Food-stamp reform -- coupled with the strong economy -- has taken nearly $400 million worth of food stamps out of the system each month, according to the Food Marketing Institute.

The Washington-based FMI repeated its call for members to get involved in crucial government issues like food-stamp reform, electrical deregulation and the minimum wage, which affect supermarket sales and operating costs.

Melissa Plaisance, senior vice president for finance and public affairs for Safeway, Pleasanton, Calif., said the retailer was concerned "that dollars would leak out of the system and go to other food sources," such as fast food.

However, she said, it is unclear whether that has actually happened.

Safeway is supporting a measure that would enable legal immigrants to once again be eligible for food stamps. That move would spur sales in states like California, where many legal immigrants reside and raise families, she said.

From January 1996 through October 1997, food-stamp cases have dropped 20%. Food-stamp usage is down, from 26 million users to about 21 million recipients in that same 18-month span, said Michael Sansolo, the FMI's senior vice president, during the FMI Speaks presentation at last week's annual convention here.

The total value of the food stamps dispersed through the system has decreased 22%, or about $400 million per month, he said.

Sansolo said the strong economy helped to lower unemployment figures from 6.3% to 4.8% in that period.

Safeway's Plaisance also said food retailers could realize reduced operating costs through electricity deregulation, a process that is rolling out on a state-by state basis. "Most food retailers will benefit from deregulation," she said.

She said Safeway, one of California's largest power customers, stands to save about 5% on its energy bills through deregulation, which allows customers to choose their energy supplier and buy energy in "bulk rates."

But operators in other states could see costs reduced by as much as 10% or 15%, she added. Plaisance also said the food industry should lobby Congress against raising the minimum wage. A current proposal in Congress would raise wages to $6.15 per hour by Jan. 1, 2000. "We want people to get involved," Plaisance said.

"We want them to write letters, because those letters get attention."

"Raising the minimum wage will crimp new jobs," she said. "It could cause problems in the industry, particularly with small operators."

Although Safeway is a union operator, and not directly affected by minimum wage increases, Plaisance said, a raise in the minimum wage could put "wage pressure" on union operators.

Currently, the low unemployment rate is making it difficult for supermarket operators to find capable employees to fill existing vacancies and new vacancies created by store expansion and new store construction, the FMI said.

According to the organization, the supermarket industry needs employees who understand food safety and who can provide customer service, as well as better managers.

The FMI said the food industry needs to become more creative in its approaches to recruiting, benefits, hours and training, and also to do a better job of portraying itself as an attractive and rewarding field in which to work.