PUMPING UP THE VALUE

LAS VEGAS -- Value-added will be the catch phrase for the National Grocers Association in 1995, according to Thomas K. Zaucha, president and chief executive officer.Interviewed on the eve of NGA's annual convention here, Zaucha said the Reston, Va.-based group will focus on offering more services to independent operators."The association's strength during its first 12 years has been its advocacy positions,

LAS VEGAS -- Value-added will be the catch phrase for the National Grocers Association in 1995, according to Thomas K. Zaucha, president and chief executive officer.

Interviewed on the eve of NGA's annual convention here, Zaucha said the Reston, Va.-based group will focus on offering more services to independent operators.

"The association's strength during its first 12 years has been its advocacy positions, and that role will continue," Zaucha explained.

"But with change occurring at such an incredible rate, NGA has recognized the need to identify and make available more innovative programs, products and services that can benefit the independent sector."

That recognition has resulted in the formation of a new entity called NGA Member Services Corp., which will encompass existing offerings -- such as Grocers Fixtures and Equipment and the two-year-old Electronic Payment Systems program -- and a host of new initiatives.

The member services program will be officially unveiled at this week's annual convention, Zaucha said. The convention runs Feb. 1 to 4.

Member Services Corp. is one of three divisions within NGA's new organizational structure. The other two are Grocers Research and Education Foundation and Advocacy.

Zaucha discussed each group's activities during the SN interview. Among his observations:

NGA plans to offer a co-branded credit card later this year that members can offer to customers, as well as a program that offers manufacturer "checks" redeemable at the front end, under the auspices of the Member Services Corp.

Under the Grocers Research and Education Foundation banner, NGA anticipates an increasing amount of cooperation among trade associations to provide more efficient and effective programs and services for their various memberships.

On its Advocacy division's agenda is regulatory and welfare reform, for which NGA expects to find more receptive ears in the new Republican-dominated Congress.

The development of the new Member Services Corp. was inspired in part, Zaucha said, by the success of the electronic payment system NGA introduced in 1993 in cooperation with Concord EFS, Minneapolis, and a variety of credit-card companies and equipment manufacturers. That system has already been installed at 1,700 stores, Zaucha noted.

"The success of that program prompted significant interest by some of the credit card associations, including Visa and MasterCard, who approached NGA about developing a national co-branded card program from which supermarkets could benefit," he explained.

Because several details of the card program remain unresolved, Zaucha said he was reluctant to discuss too many specifics about the program for at least a month.

He said NGA is in the process of developing a consortium of noncompeting retailers to create added value for the card. "To make the card more valuable, it will have to involve a variety of local merchants in a given area, including, for example, a supermarket, hardware store, toy store and travel agency," he said.

"By identifying a series of noncompeting retail entities that could give added value to the card, the card will become more beneficial to consumers, whereas limiting it to just one business would make it more difficult for it to be competitive."

Consequently, the card will be more of a generic "customer value" type of card than a card with a specific supermarket's name on it, Zaucha said.

"As much as people like name identification, the reality is that it takes a significant universe of card users to justify the economics of issuing a card under one company's name," he pointed out.

Zaucha said NGA is reviewing "six or seven other" potential member services programs, some of which are likely to be in pilot installations during the year.

One such program, he noted, is StoreChecks -- an alternative to traditional coupons that involves a booklet of manufacturer "checks" redeemable at the supermarket's front-end. Zaucha said the StoreChecks program will be tested this spring "by a cross-section of retailers and wholesalers."

According to Zaucha, the addition of more member services has helped boost NGA membership to 2,000 companies -- an increase of 15% to 20% during 1994, compared with a growth rate of only 4% to 5% in 1993.

With the jump in membership, this week's convention will have more than 5,000 attendees -- up by 1,000 over last year, Zaucha said; it will be NGA's largest annual convention attendance ever, he added.

Under the aegis of its Grocers Research and Education Foundation, Zaucha said, NGA hopes to sponsor more joint meetings and seminars with other associations.

"There's a need to deliver education and research services as efficiently as we can, without duplicating what other groups are doing, and the creation two years ago of the foundation allows us to offer programs and generate information and channel those services through other associations," Zaucha explained.

He said that, within the next year, NGA hopes to announce a series of joint conferences with the Food Marketing Institute, Washington, and the National-American Wholesale Grocers' Association, Falls Church, Va.

"We've been part of NAWGA's productivity conference the last two years, and we've participated in a joint buyer-seller conference with the Grocery Manufacturers of America and the National Food Brokers Association. "It's simply a question of sitting down and looking at each association's schedule and tying all those common needs together."

At NGA's convention this week, Tim Hammonds, FMI president and chief executive officer, will make a presentation on changing consumer demographics, "which is an opportunity for NGA to utilize FMI's consumer research expertise," Zaucha said.

In addition, C. Manly Molpus, GMA president and CEO, will be part of a panel on the effect of the new Congress on the food industry.

Turning to NGA's advocacy role, Zaucha said regulatory reform is high on the agenda. "In past administrations, both Republican and Democratic, we felt government agencies continued to overstep their statutory authority." But Zaucha contends that the current Congress will take a different attitude. "As we look at government's agenda now, there seems to be an attempt to put more reasonableness back into regulatory standards," he explained.

He also said he believes Congress will be more attentive to private-sector initiatives.

Another area of NGA concern is welfare reform, Zaucha said. "The issue is not simply whether the food industry supports food stamps or the Women, Infants and Children program. The real objective from NGA's standpoint is what we can do to significantly improve our system of welfare recovery.

Zaucha said NGA is in the second phase of a national research grant with the Department of Education whose intent is to identify all entry-level positions in the supermarket industry, identify the skills inherent in each, develop training and education procedures and then make those procedures available at the public school level.