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Some Retail Insights

A "show of hands" is a pretty subjective method to use in answering any group question, but there's still a grain of truth in the response.

In this case, the query put to the audience was: How many of you have seen year-over-year increases in sales at your stores?" The person asking the question was Bill Crawford of our sister Penton Media [3] publication, Natural Foods Merchandiser [4], during a session called "Retail Idea Exchange."

Surprisingly, most of the retailers present raised their hands in the affirmative; a smaller number said sales were the same (Flat is the new up!); and only a few admitted sales were down. But overall, it seems that independent natural food stores are faring pretty well during the recession. And the discussion turned to why this might be, and while the reason surprised me, it was a refreshing insight, indeed.

These stores - small, independent, local and highly specialized - do not compete on price. Let's face it, they can't! They can't promise the volume required of discount buy-ins. They have a number of factors working against them, right? Well, think again.

What they do have is a value proposition, a high-touch service level and quality products that are often unique to the marketplace (even exclusive to them, in some cases). This differentiation has been enough to help them retain core wellness consumers, and still attract those looking to live more healthful lives.

And who are those consumers? All of us, apparently. Citing a recent study conducted by Nutrition Business Journal [5] (another Penton publication), Crawford said some 60% or respondents stated they stopped buying organic when the economy soured... yet 65% said they were looking for products that didn't contain any additives or preservatives, etc. Isn't that organic?!?

So, basically, people have stopped buying "cool" organic, and are now just looking for foods that are organic. The contradiction expressed by the respondents here demonstrates we have a long way to go in explaining organic and other wellness categories to mainstream consumers. And those armed with the best educators and environments in which to convey that information are in a winning position. Score one for the indie natural channel.