There's something about the start of a new year that seems to require a look into the future. Maybe it's written into the Constitution.
So let's simultaneously acknowledge the impossibility of divining the future while bending to the tradition of trying. On Page 1 of this issue of SN you'll see we've asked a few clairvoyants -- actually a few well-placed executives -- to hazard the risky business of taking a look into the future.
In general, our panel of seers made predictions concerning the agenda for 1994 that assume the economy will continue for a while much like it is now -- that is, in a slow-growth mode, which mandates that the bottom line can best be beefed up by finding efficiencies. The fact that the focus is currently on something as basic as the economy and cost cutting represents a little change from this time last year when the challenge of the future was described more in terms of competition from alternate formats.
That fact was pointed out by Randall Onstead Jr., head of Randall's Food Markets, a regional chain with stores in Houston and Dallas: "A year ago the challenge in the industry was that everyone was trying to learn to compete with clubs, supercenters and other formats that sell groceries," he said in an interview for this week's front-page story.
"Although that phenomenon is still prevalent, retailers are finding they can survive against those types of formats."
Randall Onstead also is finding that competition is more of a moving target than it was. Now, "it's a mixed bag. One city [either Houston or Dallas] is competitive for one period, then not as much."
As for the impact of the economy, that theme was picked up by Stuart Rosenthal of Big V Supermarkets. "We're fighting for sales in a bad economic climate with an overdose of competitive activity," he said. The cost side of the business caught the attention of James Ukrop at Ukrop's Super Markets: "We're working harder to take costs out of the system through technology. We're also working with our wholesaler, Richfood, in the areas of using computer programs for pricing and promotional buying." Michael Julian at Farm Fresh put the whole economic-driven efficiency consideration in plain terms: "Our biggest challenge in 1994 will be to upgrade the productivity and competency of our work force. Because sales growth is so hard to come by today, the work force is very important, and profitability must come out of efficiency. "Customer relations must evolve from a work force that understands how to serve customers. Providing good customer service is becoming a more critical aspect of growing sales. So we need a better-trained, better-motivated work force than ever before." Operational costs also drive decisions about fundamentals, such as which store in a chain will survive, as Robert Piccinini of Save Mart Supermarkets mentioned: "These decisions have become more pressing because the economy is tougher now. Three or four years ago, we would probably keep a 20,000-foot store that was making a little money. But now we have to decide if a bigger store would be more profitable or whether we'd be better off leaving that location completely."
It looks like the conclusion to be made as the mid-1990s approach is that the industry is learning quickly how to survive this decade of lean -- and is taking action to make sure it survives profitably.
