LAS VEGAS -- Independent retailers can compete with big chains and supercenters in the specialty foods category, according to industry sources at the recent National Grocers Association convention.
This year's show placed a strong emphasis on specialty foods, and a big section of the show floor was dedicated to the genre, including ethnic foods, one of seven "concept areas" that were featured for the first time this year.
More than 86% of the 140 retailers surveyed for the NGA by Dakota Worldwide Corp. Marketing Research Group agreed that specialty foods enhance their variety image and their stores' reputation, increase the average sales per customer, have higher than average margins and make their stores a one-stop shopping destination. The survey repesents 466 supermarkets across the United States.
"I'm looking at specialty foods here, because it is a growing category," said Rex Harcourt, president, Carter's Inc., Charlotte, Mich., who does procurement for the chain's 23 stores.
Seven workshops at the show, held Feb. 11-14 at the Paris Las Vegas hotel here, had specialty foods as their topic, and three of the nation's premier specialty distributors exhibited, sponsored and lent expertise to the show -- on the show floor and as workshop panelists. They were Kehe Foods, Grand Rapids, Mich.; Tree of Life/Gourmet Awards, St. Augustine, Fla.; and Gourmet Specialties, a division of Unified Western Grocers, also known as Grocers Specialties in the southern part of California.
Demographics and lifestyle data useful for neighborhood marketing was presented by Tree of Life on an interactive kiosk in the specialty foods section of the show floor. There, Joy Simonsen, a category manager for Tree of Life, showed how Spectra data could be called up to show retailers whom they might be missing as customers.
In a workshop titled "Specialty Foods: A Win-Win Strategy," sponsored by Kehe Food Distributors, Raymond Burton, general manager, Gourmet Specialties, Hayward, Calif., showed how specialty foods drive the market basket. The win-win strategy he described relies on good customer service, a knowledgeable staff, speed-to-shelf of new and interesting products, and effective display.
Shoppers he called Lucy Loyal and Russell Regular account for 97% of a store's long-term gross profits and should be courted, Burton said. According to the recent survey, Whole Foods Market was listed among the top three competitive threats to independent retailers, he said.
"They want your customers," Burton said. "We can help develop natural and organic programs." With product assortment in general, he said, "your supplier should be able to advise you on which categories to grow."
Browsing in the Center Store section of the show floor, Don White, vice president of Geyer's Markets, Lexington, Ohio, which has six stores, told SN his company is getting ready to add four more. "There is always a culture change when you do that, and Kehe will play a role," he said.