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Leaving Las Vegas: NGA Show Insights

Basket Economics: Balancing local service, attention to tech in a disruptive world

basket economics

The exhibitors packed up their displays, and their robots; old friends and new said their goodbyes; a few attendees departed with new deals for equipment, services and products; and many more probably left a little something behind in the casino.

I left the 2018 National Grocers Association Show—its last in Las Vegas after many years there—with an appreciation for the precarious balancing act required of its member companies and a reminder that understanding a retail world disrupted by technology is as much a challenge for me as it is for them.

All over were reminders of the old-fashioned, small-town genuineness of many NGA members, as well as their need to be modern, fast, technologically proficient and efficient. Shortly before winning NGA's annual Best Bagger contest—a test of efficiency and technological proficiency if there ever was one—Trevor DeForest, assistant manager of a Fareway Market store in tiny Maquoketa, Iowa, told a cheering crowd he’d donate the first 10% of his $10,000 prize winnings to his church. The 35-year-old said he’d learned his bagging skills beginning at age 14, when he was hired by the store’s manager, who also happened to be his dad.

USDA Secretary Sonny Perdue, a featured speaker on opening night, devoted much of his 25-minute appearance to a message of solidarity with small food businesses. He described growing up in Bonaire, Ga., patronizing the local grocer (“The big boxes didn’t know where Bonaire was, but we knew where Davidson’s Grocery was”), and said he understood the struggle Main Street businesses faced.

“I appreciate you sticking it out, and not because you’re getting rich doing that,” Perdue said.

This was a segue to Perdue touting the Trump administration’s efforts to trim back regulations he said were costly to small business—28 withdrawn over the last year, leading to an annual savings of $56 million. While the NGA and its members heartily applauded, many members I spoke to at the show were just as dumbfounded by what Perdue had teased as a “bold new approach to SNAP,” as revealed the very next day in Trump’s proposed federal budget.

The program would direct a portion of SNAP benefits currently going to eligible participants who spend them like cash at supermarkets to a program where the federal government would send them boxed food—what Office of Management and Budget Director Mick Mulvaney described as a “Blue Apron-type” program. “It lowers the cost to us because we can buy prices at wholesale, whereas they have to buy it at retail,” he said.

Beyond the potential lost sales likely to prove extremely unpopular with retailers, anyone who thinks delivering food to shoppers at their homes could be more efficient than having them shopp for it themselves in a store probably didn’t tune into the discussions on e-commerce at the NGA event.

But you heard some good ideas out there too. A student case study contest with the feel of an NCAA tournament came down to St. Joseph's University vs. Western Michigan University. The contest challenged teams of four representing the schools to present to grocer Coborn’s strategies to improve health-and-wellness sales and positioning. St. Joe's won in part on the strength of a suggestion that the grocer deploy university students compelled to do internships as “wellness ambassadors” at stores, complementing Coborns’ existing staff of dietitians.

In another session, I heard an insightful remark from Jimmy Wright of Wright’s Marke, who said the disruption his store feels from Walmart doesn’t come from its giant investments in e-commerce, necessarily, but from the improved store conditions that have come along with that effort.

You need to do both right, and even then, it’s only beginning. According to Nick Nickitas, CEO of Rosie.com, independents will need to occupy each channel a customer shops. Their advantage is “valuable real estate very close to the end customer,” providing a potential base to succeed in the new world.

Next year's NGA Show will be held in San Diego. One reason, officials said, was that exhibitors have been seeking more space than they could fit in the current arrangement. That’s an encouraging sign to take away.

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