WHAT'S PREDICTED FOR THIS YEAR, AND WHAT'S HAPPENING

Now that we've started the first work day of this fledgling year, there's no better time to take a look ahead at what's next for the industry.Predicting is never an easy task. Natural and man-made disasters continue to take their ruinous course notwithstanding what anyone thinks is going to happen. Luckily, our focus can be a little narrower so several top-level industry executives agreed to give

Now that we've started the first work day of this fledgling year, there's no better time to take a look ahead at what's next for the industry.

Predicting is never an easy task. Natural and man-made disasters continue to take their ruinous course notwithstanding what anyone thinks is going to happen. Luckily, our focus can be a little narrower so several top-level industry executives agreed to give SN their thoughts about the industry. See the reference on Page 1.

Some told SN the economy has taken a good turn lately with consumer confidence pointed upward and employment showing a little life.

The director of the Conference Board's Consumer Research Center said those factors could prove critical as this year proceeds: "The continuing economic expansion, combined with job growth, has consumers ending the year on a high note. The most significant contributor to the rebound in confidence has been the overall improvement in current conditions over the past 12 months. And consumers' outlook suggests that the economy will continue to expand in the first half of [this year]."

There are negatives at work, too, among them the unpredictable direction of oil prices. Should they increase, money will drain from consumers' pockets, reducing spending at price-driven stores, changing competitive metrics. Moreover, as one executive pointed out, the cost of oil drives the cost of product packaging.

Let's take a closer look at some of the key issues and what executives had to say. You'll find more detail in the news feature itself, of course.

Competition: One executive said that for conventional supermarkets, the biggest job ahead is to find a unique selling point in an increasingly competitive environment. As always, part of that effort must be to shift eyes off price: "We will continue to differentiate based on our ability to provide customers a world-class food-shopping experience that showcases the region's freshest, highest-quality food," said one operator.

Economy: Among the optimistic notes sounded was this one, albeit with a caveat: "The economy will improve over what it was in 2004 because business feels comfortable with Bush as president. ... I also think business will be willing to make new investments. ... The only negative factor I see affecting the economy is the war in Iraq, [which is] becoming such a divisive issue and it's bringing back memories of Vietnam on the home front."

Another executive pointed out that the small increases in interest rates seen last year indicate a stronger economy ahead.

Medical costs: Several executives identified health care costs as a major problem: "[Health care costs] continue to be a huge challenge, and any solution has to start at the top with tort reform ... because of what physicians and hospitals are faced with in terms of liability insurance."

Now let's look away from predicting and toward what's happening for the first time: 2005 Sunrise.

That's a deadline that went into effect a couple of days ago. It means that the time has arrived for North American retailers to be ready to read and process 13-digit bar codes on product imported from elsewhere. See how that's going on Page 27.