Supermarkets Care

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

At this time of year many of us reflect on our lives and the many things for which we are grateful. We are also reminded, as we think about our own families and friends, of the many people in our communities who are less fortunate and in need of help. The supermarket industry is made up of caring people who go the extra mile for those in need, especially at this time of the year. Here are just a few examples of what is done in our home state of Massachusetts. I know this is reflective of what many in our industry do throughout the country.  

The U.S. 2010 Census Report showed that 245,000 households or 600,000 people living in Massachusetts had difficulty providing food for themselves. Hundreds of thousands of people are hungry in one of the most prosperous and livable states in the country.

Recently I had the opportunity to be principal for a day in a public school in Worcester, MA, the University Park Campus School. The award winning academic success of the school is impressive, and I have so much admiration for the dedicated staff and students with whom I interacted that day. I enjoyed my time at the school and many things left a lasting impression on me but none more than the fact that three-quarters of this high performing student body eat two hot meals a day at school because there isn’t enough food at home.

Leaders in the supermarket industry are responding to the hunger crisis. Hannaford Supermarkets has implemented a three part program called Hannaford Helps Fight Hunger at its 26 Massachusetts stores over the holiday season. The program delivers food directly to those who serve the hungry and encourages customers to make contributions to those in need at the register. Its “Buy One, Give One” program allows for designated items purchased by customers to be matched by the company with a similar item donated to the local area food bank.

Working with the Greater Boston Food Bank, supermarket chains including Stop & Shop, Shaw’s, Hannaford, Johnnie’s FoodMaster and Roche Brothers donated 16,000 turkeys to Massachusetts residents this past Thanksgiving. These contributions were matched by others and the total number of turkeys provided to families in need was 44,000.

At Imperial, the management team makes a donation to the Greater Worcester County Food Bank, matched by a company contribution, in lieu of sending holiday cards to one another.

These are just a few examples of the generosity of our industry. Big Y, Market Basket, Price Chopper, Whole Foods, Wegmans, and many others have traditions of giving to those in need, during the holidays, and throughout the year.

I’m proud of what our trading partners in the supermarket industry do to provide for those who are most in need, especially at this time of year. So, on behalf of all of us from Imperial, it is with sincere gratitude that we extend our warmest thoughts and wishes to all for a wonderful Holiday Season and a very Happy New Year.  

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Congratulations to Big Y on its 75^th Anniversary

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

During “The Great Depression”, toothpaste cost 29 cents, aspirin was 49 cents and a light bulb could be purchased for 6 cents.  While retail prices have certainly risen from those early days, in the 1930’s, the average family spent 18.8% of their disposable personal income on groceries as compared to today when the average U.S. family spends 5.5% according to the Department of Agriculture.  This is a powerful tribute to the entire food industry which has been unrelenting in its efforts to control both food and non-food costs for the consumer.   

And there’s no better example of just how far the supermarket industry has progressed than Big Y which is celebrating its 75^th anniversary.

In 1936, Big Y opened its first store in Chicopee, Massachusetts, a far cry from the fifty-nine World Class markets it operates today. The founders, Paul and Gerry D‘Amour were determined to do “whatever it takes” to serve the customer.  Big Y’s culture is one of enduring values with a commitment to customer service, price and quality, innovation and giving back to the community.

The D’Amour family sets the tone – as it always has- starting with Paul and Gerry, continuing with Donald, Charlie and Claire and now including the third generation; Michael, Nicole, Matt, Emily and Maggie.  Big Y’s team, over 10,000 strong, lives these values every day.

While many things in supermarkets have changed, Big Y’s customers continue to experience the same commitment to service, price and quality that its early customers enjoyed at the Y Cash Market 75 years ago.  Their spirit of innovation is widely recognized and their World Class Market format and Express Savings Club have become models for the industry.  We saw their passion for innovation firsthand with the expansive Health & Beauty and General Merchandise departments in the early 90’s.  They showed us all what was possible; not only in their stores but in the communities they serve.

The Big Y team has always believed in the importance of giving back to the community.  The Company’s commitment to children and education has been recognized on a national level and is the source of great pride to everyone associated with Big Y.

Today, Big Y is clearly one of the pioneering leaders in the supermarket industry.  So many of us have learned from the Big Y family and our relationships with them have made us better companies.

We congratulate Big Y on its 75^th anniversary, knowing that achieving this impressive milestone is proof positive that the best is yet to come.    

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

HBC Pricing Matters in Independent Supermarkets

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

We all know price matters. A recent Nielsen study reinforced that consumers become increasingly more price sensitive during a recession. The growth in private label is more evidence of this trend. Ironically, private label products are less price sensitive than national brands because consumers associate private label with lower prices. So, how does the independent grocer compete on HBC?

It starts with understanding that consumers are more price sensitive on products they buy frequently. Secondly, retailers need to know the competitive prices in their market area on key national brand HBC products – like Colgate, Pantene, and Listerine. Then they should develop a pricing strategy and change consumer perception about where to buy these products.

Recently a friend of mine was telling me that she creates two shopping lists: one for an independent grocery store which she visits weekly and one for Wal-Mart where she only occasionally shops. On her Wal-Mart list was deodorant, shampoo and toothpaste. When I asked her why she wouldn’t buy these items at her grocery store, she said it was “too expensive”. Her perception was that HBC was higher priced in the grocery store. But was it really?

We recently completed a study for an independents grocery group. We surveyed the marketplace on 16 top selling SKU’s. Where our retailers were more expensive, we worked with vendors to source the product to meet the market’s lowest price. Once the price was lowered, the challenge of changing consumer perceptions was critical. We developed a program which included store banners, HBC floor and shelf signs, and off shelf displays which drew attention to the items and the market’s leading HBC prices. We even showed these items on their Facebook page. The program resulted in a threefold increase in sales on the key products. More importantly, traffic increased in the HBC aisle. And while there’s always trade-off between margin rate and margin dollars, it is clear that price matters in growing HBC sales for the independent grocery store.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

“Innovate or Die” – We choose to Innovate.

Innovation is the life-blood of all successful organizations. Bill Gates may have been the first business leader to be quoted as saying “Innovate or Die”, but many have said it since, and we agree. We know we need to innovate to keep pace with our retailers who are changing and improving every day. We also understand that value comes from expertise – and innovation – in most non-food categories. Shoppers’ tastes change and financial pressures impact consumer purchases now more than ever. As always our industry anticipates consumer behavior as we strive to better market and sell our products.

One example of innovation can be found in the growth of the vitamin category. Anyone who has recently visited a doctor knows that Vitamin D is highly recommended, and people are heeding advice to supplement diet with vitamins. Sales in this category have seen double digit growth over the last two years. To respond to this trend, space for vitamins has grown threefold and sections are brand blocked to enable effective promotions that drive sales. Many retailers have moved from small integrated sets to free standing sections, seeing strong results.

Another example of recent innovation can be found in the expansion of fruit and vegetable cross merchandising displays. Products needed to peel or eat fruit and vegetables are colorful, high quality and adapt to new life style consumers.

And in the spirit of innovation, we recently renamed our merchandising center at Imperial. Our “Innovation Center” represents substantive changes which in many ways the center looks and feels like a grocery store albeit one dedicated to non-foods. It’s not unusual to see category managers and supermarket operators working together developing planograms, designing new programs, reviewing advertising plans, or simply choosing new price tags or signing to support promotions. Looking at best practice and learning from each other is what sparks innovation.

“Innovate or Die”. We choose to innovate.

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Non-Food for Thought

 Congratulations to Mike Bourgoine, Associated Grocers of New England

Mike Bourgoine, President and CEO of Associated Grocers of New England is being inducted this month into The Food Industry Hall of Fame. I want to join others in our industry in congratulating Mike for his many years of leadership of AG of New England which have led to this honor and recognition by his peers. His induction has caused me to reflect on my relationship with Mike that spans 40 years,
and to consider the reasons for Mike’s success.

Mike and I began our careers in the industry at about the same time and I remember being impressed
early on by his great instincts for retail. He was intuitive, always constructive and very insightful about
the needs of the retailers he supported. He was also willing to try new things. Mike encouraged and
supported Imperial’s first seasonal merchandise show which was conducted in New Hampshire for
Wetterau retailers. I have always been grateful for Mike’s cooperation with suppliers. I also admire the
collaborative spirit he helped to create and nurtures among the independent retailers that make up
AG of New England.

Jim Collins the often quoted author of “Good to Great” and “Built to Last” points out that getting
the right people on the bus comes first, and that the right people will take your organization where
it needs to go. Mike has done that. He created a great team and AG of New England has grown
and flourished as a result. When Mike assumed the leadership of AG of New England, it was a
small group of independent retailers who were benefiting from group buying, with a warehouse in
Manchester, New Hampshire that was outdated. Today AG of New England has grown to a major
wholesale grocery operation with an impressive state of the art distribution center in Pembroke, New
Hampshire that supports and supplies retailers in seven states. Mike and his team have gained the
respect and confidence of their retailers and the cooperative members they serve, and together they
have grown their business and made AG of New England the success it is today. The right people on
the bus, indeed.

We congratulate Mike Bourgoine on the occasion of his well deserved induction into The Food
Industry Hall of Fame.

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Is Wal-Mart Beatable?

There’s no question about it! Wal-Mart is a powerhouse, and one of the toughest competitors in retailing today. Not since the Great Atlantic and Pacific Tea Co., a century ago, has one retailer experienced such a rapid growth and dominant market share.

Probably no other company has as many detractors and downright enemies, yet all can agree that Wal-Mart is BIG…even bigger than big. Sales volume from about 9,000 stores world-wide amounted to more than $400 billion last year. This figure gains even more significance when you consider other factors. Worldwide, much of Wal-Mart’s energy and resources have been deployed in Canada, Mexico, Central and South America, Great Britain and in more distant places with huge populations like India, China and Japan. So far, 14 nations are on Wal-Mart’s roster, and more will be signing up to allow the company to acquire one or more well-established local chains as a means of doing business more quickly and efficiently.

At its first-quarter meeting last April 30th, in Bentonville, AK, Wal-Mart told investors and reporters that overall sales were up 3.4%, reaching a new quarterly high and with excellent profits. However, management was disappointed to report that same-store sales had declined by 1.1%. This was a bad moment in an otherwise upbeat session. Same-store sales reflect an accurate picture of a retailer’s operating sales success.

That “true performance” is magnified when it runs more than one quarter. In Wal-Mart’s case, the poor showing of same-store sales has run eight consecutive quarters behind prior year.

So the question is, what’s changed and why? Is Wal-Mart trying too hard to please everyone, and losing some of its core customers? Is their price advantage as compelling as it once was? Is their assortment and quality competitive? At the end of the day is Wal-Mart beatable? Perhaps the answer is twofold: (1) no retailer can be all things to all people, and (2) size and past performance alone cannot guarantee future success. Most important of all, there’s no substitute for adapting to the needs of the local consumer market, and providing exceptional customer service, which may well be the ultimate competitive edge for today’s supermarket.

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Thank You!

What to do or say when your company is recognized in the trade press? You can say with modesty, we don’t deserve this. Or you can sit back and enjoy the publicity. I would like to take a different path and use this opportunity to say thank you.

First to the Griffin Report for the recognition in this issue of my dad, Frank Sleeper, and the company he founded more than 70 years ago. We very much appreciate the acknowledgment of his efforts and ours.

And how does one thank a dad for his vision, support, hard work and dedication, all of which contributed to creating the company the Griffin Report recognizes this month? The way my family shows our appreciation is to keep him in our thoughts every day and try to live by his example of treating everyone with respect and kindness, and doing the “right thing”.

I also want to take this opportunity to thank our customers, who operate nearly 2,000 stores in twelve states. We strive to be the performance leader in the distribution and merchandising of supermarket non-foods, to improve shopper’s experience, and contribute to our retailer’s bottom line.  We know we work for you and we need to earn your vote of confidence every day. We are extraordinarily grateful for the opportunity we have to partner with our colleagues in the supermarket industry: retailers, vendors, and brokers, and on behalf of all of us at Imperial, I want to thank each of them for their friendship and support.

And most importantly I want to thank the 650 Imperial team members who are Imperial Distributors and who made this recognition possible. Imperial has stood the test of time and that is because of the talent and dedication of our people. I know I don’t say it enough – and I’m grateful to have this opportunity to say it again – thank you!

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Are There Too Many Items in HBC?

A recent Wall Street Journal article observed that “an explosion” of specialized pastes and gels to whiten teeth, reduce plaque and fight gingivitis, combined with all the flavors and sizes, turns consumer buying of toothpaste into “sensory overload.”
While one might conclude that SKU “overload” exists in other HBC categories, the real question is: Are there too many SKU’s in the HBC department?

The Mintel International Group points out that 69 new toothpaste items hit store shelves last year, down sharply from 102 in 2007, and Spiro LLC research found that 252 different toothpaste SKUs were sold at retail last February, compared to 412 in March of 2008. So is “capping” the number of brands, package sizes and flavors in stores, good for growing HBC categories?

Retailers must deal with dozens of items per category before deciding on which items must go and which to keep to assure that sections are fresh, easy to shop and complete. But more importantly, retailers must never forget that (1) consumers still remain brand loyal, (2) new items are the life blood of the HBC department, and (3) print ads and coupons are critical in growing HBC.

Probably the most famous misstep in reducing product assortments with the avowed aim of making shopping easier and more efficient was Wal-Mart’s decision to eliminate hundreds of items, presumably slow-movers. It didn’t take long for Wal-Mart to realize that the move was ill-advised since it was losing and antagonizing their customers. Last year, Wal-Mart reversed itself and, under new leadership, reinstated most of the lost items. Another misstep was seen when the nation’s largest food wholesalers embarked on a similar strategy of SKU reductions. Simply put, it was counterproductive to growing their retailer’s HBC business.

Competition is ferocious – Mass Merchandisers (Wal-Mart and Target) and Chain Drug (CVS and Walgreens) are out-doing each other in growing large food departments. With all the forces battling for business, does it really make good sense to reduce item count on important and profitable HBC and risk losing loyal customers who are looking for their preferred brands in their supermarket?

We believe reducing HBC SKUs as an overall strategy is not the way to build the business. It certainly does not mean that HBC assortments should forgo consistent review and periodic shelf planograming. Reducing sizes before brands, with the right method and a process and a practical objective in mind, should not diminish commitment to variety. Variety keeps loyal shoppers in supermarkets and discourages them from taking their HBC purchases elsewhere. It’s important for HBC, but equally important for the rest of the store.

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

NGA’s – “Taking Charge of Change” Hits the Mark

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

Last month, I attended the 2011 National Grocer’s Association (NGA) Annual Convention. NGA focuses on independent supermarkets, family run regional chains and retailer owned wholesalers. With 2,100 attendees and a sold out trade show of suppliers and manufacturers, NGA’s members do about half of U.S. supermarket sales or $200 billion.

The convention opened with an exciting keynote session; “America at a Crossroads” with Jed Bush and James Carville. They were more aligned than opposed on what lessons Americans should take from the recession. Even their recommendations for bringing the country back to prosperity were surprisingly similar.

The business program included a report by Peter Larkin, NGA’s new President and Chief Executive Officer. The findings of this, just released membership survey, will be used to strengthen what the association does currently and what will be offered in the future.

Among the 40 different workshops which ranged from topics of best practices in food safety to pricing as a traffic builder; many of the ideas for growing the food business applies to building non-foods as well. I liked the ideas of not trying to price compete with every competitor but rather to focus on one competitor who is most important in the market. Keeping price points simple for consumers to understand is a basic must, but the recommendation for moving to round numbers like $3.00 rather than $2.99 was insightful. And striving for more creativity by grouping best items, generating exciting themes, using stronger POP materials and putting enlarged copies of printed ad specials on signs next to the featured items, all help to address the reality that impulse shopping is down and successful retail strategies are needed.

The session on how social networks are changing the fundamentals of communicating and involving shoppers, was meaningful from an advertising promotion and new ideas perspective.

So at a time when marketing, merchandising, collaborating and communication have never been more important, NGA’s convention theme of “Taking Charge of Change” hit the mark.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com

Happy Anniversary, Griffin Report

Michael D. Sleeper, Chief Executive Officer, Imperial Distributors, Inc.

It was about 45 years ago that I came into our family business.  My, how times have changed!  In Worcester County, the big players then were Wonder Markets, Iandolis and Victory.  Today, those businesses have changed to Price Chopper, Shaw’s and Hannaford.  But a good number of New England’s best chains have thrived during the past 45 years.  Big Y, Market Basket and Roche have grown tremendously, and while Stop and Shop’s ownership moved from the Rabb family to KKR and then to Ahold, they are still a major factor throughout the Northeast.  But, what is also gratifying to see, are so many family independents who continue to compete in an ever changing market place.  Foodmaster, Donelan’s, Trucchis, Crosby’s, Lees, McQuades, Geisslers, LaBonnes and Caraluzzi to name a few.  Of course, new retailers on the scene like Whole Foods and Trader Joes, Wal-Mart, Target, Club and Dollar stores were not in business 45 years ago, but they have added to the fabric of the supermarket industry and, in many ways, have redefined the competitive landscape.

Through it all, The Griffin Report has provided probing news to keep everyone informed with a personal touch and local flavor.  The Griffin Report has adapted well to the changing times, but one constant has never changed; The Griffin Report continues to be an important source of reporting and information in a dynamic and ever-changing supermarket industry.

So, to the entire Griffin Team, we offer you our warmest congratulations with thanks for all you have done and, will continue to do, measuring the pulse of the broker, distributor and retailer community over the past 45 years.

For comments or questions, contact us by phone at 508-756-5156, or e-mail: msleeper@imperialdistributors.com