As we do each year, Food World reached out to several retailers in our marketing area, asking them to look ahead at some of the issues facing the industry in the coming year. This year’s panelists include: Rod Antolock, president of Harris Teeter; Rick Rodgers, president of Green Valley Marketplace/B. Green; Dan Croce, SVP-store operations for the East division of Sprouts Farmers Market; and Nicholas Bertram, president of The Giant Company. Our questions:

 

  1. Among many other things, the pandemic has wreaked havoc with supply chains and, ultimately, item availability. Assuming post-pandemic normalcy occurs later this year, what long-term changes in SKU rationalization do you foresee?
  2. Post-pandemic, how do you view overall vendor relations changing in such areas as top-to-top meetings, new item introductions, overall trade spending, etc.?
  3. With the COVID-19 virus came the need for extreme cleanliness at store level. What have you done to permanently change your sanitation and company-wide safety protocols?
  4. As the pandemic has changed many buying habits/patterns, ecommerce continues to be a growing platform. Did you make changes during the pandemic and what future changes do you anticipate for 2021?

 

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Rod Antolock

President, Harris Teeter

  1. Retailers will continue to reduce assortment over the next couple of years—this will improve shelf efficiencies and improve DOS (days of sales) and COS (cases on shelf) for their stores. This will result in lower out-of-stocks as well as improved sales. Additionally, this reduction will have to be balanced with new item innovation.

 

  1. Top to top meetings should go back to normal once travel restrictions are lifted. It’s very important that retailers and suppliers meet at the highest level in person annually. However, quarterly meetings should be a combination of virtual and in-person meetings throughout the year.                                                                                                                                                                                                                                 I believe post-pandemic new item introduction meetings should go back to pre-COVID routines; it is critically important to meet in person in order to discuss and evaluate all new item products.                                                                                                                                                                                                                                We expect overall trade spending to increase post-pandemic as competition amongst retailers is going to be fierce and we are going to expect heavy investment, keeping in mind that many suppliers saved trade spend during the pandemic

 

  1. One of Harris Teeter’s core values has been and will always be operating clean stores. Some of the enhancements to our usual strict sanitation procedures that were put into place due to COVID will likely remain in place and become part of our everyday standards. Some examples are wiping down self-checkout screens more often and other frequent touch points such as Frozen food and dairy door handles.

 

  1. As our business grew this year, we focused much of our efforts on ensuring adequate storage capacity for storing and staging orders. While most of this work is already complete on the easy-to-do stores, this year, our focus will be on “In the wall reset” to improve storage and staging orders where the opportunity was not readily available during the pandemic.

 

 

Rick Rodgers

President, Green Valley Marketplace/B. Green & Co.

  1. When we look at product assortment and supply chain issues there are many factors to consider. We had supply issues due to demand, manufacturing capacity, raw material challenges, COVID out-breaks that shut down plants and transportation/logistic gridlock. There was also a conscious effort by many manufacturers to reduce their assortment as a solution to meet demand on their core variety. It is the opinion of many wholesalers and retailers that most companies will only be bringing back a limited amount of those items and eliminate the others permanently. It has been extremely difficult to manage shelf integrity based on the plethora of supply issues and changing purchase habits due to the pandemic. Our team will be working continuously to rationalize our SKU assortment using our internal data and in partnership with our manufacturer and vendor partners.

 

  1. I think that even prior to the pandemic, vendor in-person meetings were going more virtual. New item introductions have also become more sell sheet and email based and the frequency and number of items has been more controlled. So, I think the trend to virtual interaction with customers has been accelerated by the pandemic. The cost and travel time coupled with a reduction in sales team staff was already dictating the transition for most companies and I think what we see is now the new normal. The interesting thing to look at as it pertains to selling, is how this will impact food shows and expos going forward.

 

  1. Cleanliness is always a good thing for grocery operators, and we have always prided ourselves on operating clean stores. With a pandemic it is more about a sanitary approach to protect both your employees and customers. We immediately wanted to take care of our associates and give them confidence they were protected at work. We installed plexi-glass at the registers, customer service and in all service departments where there was direct contact with customers. We provided gloves and face masks or face shields to all associates. As the pandemic continued, we allowed our associates to be creative and wear their own mask. We even had a contest at each store for the most creative and gave away gift cards. We placed floor graphics throughout the store promoting social distancing, directional signs in the aisles and queuing lines at the registers and service departments. We also offered hand wipes and sanitizer in multiple areas around the store. Cart sanitizing, register cleaning and a strict routine of store cleaning/sanitizing was in place and strictly enforced. The company followed all the CDC guidelines to the fullest as soon as they were made available and always took the approach of extreme caution with every decision about our employees’ well-being. Our associates are hero’s in our minds and cannot be praised enough for their tireless efforts during this difficult time. One of the few positives to come from this challenge is confirmation of just how amazing our B. Green team is.

 

  1. To keep up with the continued use of eCommerce during the pandemic, we made several operational changes. The number of slots available daily to customers for both pickup and delivery was dramatically increased to keep up with demand. This required the need to both hire additional employees and cross-train existing employees to assist in order picking and processing.  Administrative changes were also made to improve the customer interaction on the eCommerce website and also improve our ability to do suggestive selling to ensure we captured what would have been impulse sales in store.  Current plan for 2021 is to continue to invest capital in technology and infrastructure to improve order processing efficiency and increase profitability on eCommerce orders which necessitate more labor.  These investments will also improve the turn time of the order process and result in an overall better customer experience.

 

Dan Croce

SVP-Eastern Division, Sprouts Farmers Market

  1. We’re committed to serving our customers coast to coast the good-for-you groceries they rely on Sprouts for throughout the pandemic. Our team members take great pride in serving the community as they are working hard to process new shipments and keep shelves well-stocked with fresh and healthy foods along with essential vitamins and supplements to support overall health and wellbeing. Additionally, we continue to work with our long term vendor partners and collaborate to help fortify the product pipeline not just in the short term, but long term through all quarter of 2021. Partnership and clarity in planning has served us well and look to fortify these consistent efforts by both Sprout and our partners every day.

 

  1. As Sprouts continues to grow, we’re committed to growing our relationships with niche vendors to bring their unique, quality products to the millions of shoppers who visit our stores every week. Being a people powered business, we are very serious about the safety of our team members, our partners, and our customers. We continue to invest in our differentiated assortment by meeting new vendors through virtual events and growing innovation with our current vendors though deepened relationships. As we all learn every day and hypothesize what post pandemic will be like, we are committed to forging our relationships with current and future partners.

 

  1. Operationally, many of the health safety procedures you see in-store are here to stay. They are a good thing for the industry going forward. The scope of where we clean and how often we clean has dramatically ramped up and Sprouts is one of only a few retailers to join Ecolab Science Certified program. The program combines advanced chemistries with new public health and food safety training and audit validation to deliver a higher level of cleanliness.

 

  1. Ecommerce is a natural way for Sprouts to engage with our customers and offer them broader access to healthy foods. We now also offer pickup in all our major markets after swiftly expanding our pickup service from 55 stores to 344 stores in a matter of weeks. As the country continues to practice social distancing, Sprouts’ grocery delivery and pickup sales have remained elevated.

 

Croce added some information about the retailer’s growth plans as well: “In 2021, Sprouts will open a similar number of new stores as we did in 2020 and we will introduce our smaller store layout of 21,000 – 25,000 square feet and a new format design and layout in several stores.  We will also add distribution centers targeted to be within 250 miles of each store ensuring the freshest products for our guest.”

 

Nicholas Bertram

President, The Giant Company

  1. No question that the industry faced supply chain challenges this year but through them, I believe we gained valuable long-term learnings that will serve our company, supplier partners and our customers in the future. What our customer needed this year was very different than in years past. We saw that category availability was more important than specific item or flavor for most of the year. As we move forward it will be important to get those favorite brands and flavors back, but with more focus on item variety versus size variety.                                                                                                                                                                                                                                           An important part of what we do at The Giant Company is simplifying shopping for our customer and being there for her, whenever and wherever she needs us. Continuing to refine our store segmentation, in conjunction with our partners at RBS and PDL will help us continue to hone the assortment on a store-by-store basis.We saw more of our customers preparing meals at home, and we believe this will continue well into 2021. We have doubled down on our efforts to support this trend, with our dedicated “All Set” meal program, which will continue to give our customer the solutions they need to make the most of their family meals, where ever they may be. We are cautiously optimistic that the industry supply chain will continue to improve every day.

 

  1. While we were all thrust into this virtual world, there was a quick realization that business could still be conducted, and be effective, without physically being face to face. With the introduction of vaccines, we are hopeful that travel restrictions will ease and at some point, we are able to return to certain face to face meetings.                                                                                                                                                          Top-to-top meetings have long been a very important part of our industry and they will continue to be, but the content and physical locations will look different. Specifically, as 2021 gets underway, both sides will need to have more conversation around supply chain as well as e-commerce.                                                                                                                                                                                                                While the industry saw a decline in promotional spending in 2020 based on product availability, The Giant Company is planning an aggressive commercial plan in conjunction with our vendor partners and we anticipate the need for increased promotional activity and consumer.
  1. Our stores had rigorous safety protocols in place prior to the pandemic so we were able to leverage our safety program as a building block to enhance safety throughout our facilities. Some examples of these enhancements were adding plexiglass at checkout lanes, redesigning workflow to promote social distancing, supplying and requiring face mask usage by all team members.                                                                                                                                                                                                            In terms of sanitation, we’ve always taken pride in the cleanliness of our stores. We’ve leveraged an already strong cleaning and sanitation program to add additional iterations of cleaning and disinfecting throughout the day further ensuring the safety of our team members and customers. This includes additional disinfection of high touch surfaces throughout the store. Some of these changes may be temporary in nature and will be assessed when the pandemic subsides.

 

  1. As part of our evolution as an omni-channel retailer, we had been investing in and fortifying our Giant Direct business in 2019, so we were really well-positioned for the incredible demand for the online grocery services triggered by the pandemic. That preparedness allowed our team to focus on enhancing our offering to deliver an even greater experience and value to our customers. In fact, it is hard to find a time in which something on our site or within our ecommerce operations was not changing for the better, as we had to make sure we were constantly improving our customer experience and meet the increased demand.

As far as our ecommerce operations, we were extremely focused on increasing picking efficiency and increasing capacity. Contactless pickup and delivery was also implemented, to ensure the safety of our team members and customers. We also began our “Flyby” pilot, technology that let our stores know when a customer was pulling into the parking lot to pick up an order, to help reduce wait times.

On our website we implemented a Chatbot to help with customer service during their online shop. To help simplify the shop, we also digitized the high value clip coupons that have traditionally just been in our paper ad and took our very popular Scan It! App, for frictionless shopping, and integrated it into our core Giant app for a more seamless experience.

We also had our Cyber Days promotion for the second year in a row. The week after Thanksgiving, Giant Direct featured an exclusively online promotion. Beginning on Cyber Monday, customers could shop 65+ BOGO’s, with the opportunity to save over $100 with these online only deals. This program was built in partnership with our valued CPG partners, and we could not be more proud of the results.

As we look to the year ahead, accepting SNAP benefits online is a major priority to deliver on our promise of connecting families for a better future and making it easier than ever for all customers to share a meal together. And we’ll continue to improve our online customer experience by reducing customer wait times and bringing more value online through special online exclusive events with our CPG partners.