NEW YORK — The buying changes consumers are making in today's weakened economy may become permanent, and that bodes well for supermarkets, David Dillon, chairman and chief executive officer of Kroger Co., Cincinnati, said here yesterday.
"We're well-positioned today for customers who want to make sure they live a more frugal life than they previously pursued, and we are very bullish about that and cautiously optimistic," Dillon said in a presentation to the annual Retail and Restaurant Conference sponsored by Barclays Bank here. "Today's consumers are trying to be conservative and get through the current situation. The big question is what will their behavior look like two or three years from now, and we have no data yet to tell us that. But my view is the customer will end up being more conservative, and that bodes well for our business."
Asked about the consumer shift to private label — which apparently puts retailers in a better position than CPG companies — Dillon said it's not a question of the glass being half-empty or half-full. "It's more like the glass is two sizes too big, but it's not a question of a struggle for power between retailers and CPG companies."
National vendors have products consumers want but prices that are too high, "while retailers are happy to let consumers choose," Dillon explained. Kroger's relationships with "a couple handfuls" of national vendors is good, he added, and tonnage is up for some of them. "But as buying agents for consumers, we're in the middle," he said.
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