ORLANDO, Fla. (FNS) -- IGA retailers that promote their strengths can survive long-term, despite the influx of supercenters and other competition, a panel of independent operators said here at IGA's annual Merchandising, Advertising & Promotions conference.
Although there is likely to be some short-term fallout in the number of independent operators in the next five years, "looking at it long-term, the IGA stores left will be stronger and more viable," John Runyan, senior vice president of Fleming Cos., Oklahoma City, and group president of its price impact stores division, told the meeting.
Runyan and the retail panelists said independents should concentrate on promoting the advantages they have to compete with supercenters, including the following:
* Size. As some consumers tire of shopping at huge stores, independents can promote their smaller size and easy access, Runyan said.
"The huge size of supercenters is starting to have a negative effect," he said. "Looking at consumer surveys, we see that larger stores are not as consumer-friendly as small stores."
Panelist Roger Drake, owner of Woodcroft Foodland IGA in Torrensville, South Australia, said he agreed. "In Australia chains are really looking more like independents as they're coming back to the 30,000-square-foot format," he said.
* Perishables. Independents should emphasize their perishables departments and should expand those sections when supercenters enter their markets, Runyan advised. "Be known for perishables excellence," he said.
Jim Maevers, co-owner of Schaper's IGA Plus in Jackson, Mo., said his company plans to improve its bakery and catering operations before a new Wal-Mart supercenter opens next spring about eight miles from his store.
* Location. IGA retailers should stress the convenience of their locations, Runyan said, especially as supercenters find it harder to find good locations for new stores because of the high cost of property in some areas and the large amount of land they need.
* Customer loyalty. Smaller grocery operators can retain loyal shoppers better than other competitors, Runyan said, because they have the ability to zero in on certain ethnic or demographic groups rather than following the cookie-cutter approach used by chains.
Rod Rynke, president of Oblong Food Center in Robinson, Ill., said his store instituted a "no questions asked" return policy after hearing that Wal-Mart's return policy appeared to be stricter than in the past.
Drake said he sent thank-you cards to shoppers who stayed loyal to his store after a supercenter opened nearby. The cards read, "We know you have a choice where to shop. We appreciate you shopping here."
According to Runyan, surveys show customer loyalty to supercenters is slipping; among those polled, the number of shoppers going to supercenters for groceries has dropped from 70% two years ago to 50%, and the number of consumers who said they visited supercenters weekly has dropped from 70% to 60%.
* Values. With the current political situation in Washington, Runyan said he believed retailers should emphasize IGA's "Hometown Proud" theme or similar ethical values.
"It's a perfect time to emphasize the hometown pride of working with a community where people have values and ethics," he said.
Panelists said they always benefit from involvement in community activities. For example, Rynke said a school band that his store supports refused to play at a Wal-Mart supercenter grand opening because the parents and band administrator wanted to stay loyal to Oblong Food Center.
* Employees. Retaining and training employees will help independents withstand supercenter competition, panelists said.
Rynke said his store did not lose any employees when a Wal-Mart supercenter opened nearby last month; Drake suggested retailers should make employees feel more important with simple programs, such as giving business cards to all department managers.
* Price integrity. Runyan said supercenters have a harder time controlling prices. "Because they are so large and have so many stockkeeping units, they have had trouble in the past keeping shelf prices even with computers and ads, which confused customers," he said.
Citing surveys, Runyan said there are some areas in which supercenters are more successful than independents: they offer one-stop shopping; they are 24-hour operations; they have lower prices on general merchandise and health and beauty care items, and lower labor costs because they are nonunion operations.