Inflation, labor shortages and an uncertain regulatory environment are among the thorniest issues facing independent grocers at the start of 2022. Greg Ferrara, president and CEO of the Washington, D.C.-based National Grocers Association (NGA), representing 21,000 independent grocers throughout the U.S., spoke with Winsight Grocery Business recently about these challenges as well as the NGA’s upcoming 40th anniversary.
Diane Adam: The nation’s independent grocers are contending with unprecedented staffing challenges as we step into 2022. What are your thoughts on this in regard to the vaccine mandate and the impact of Omicron?
Greg Ferrara: That is definitely taking a lot of people out of the supply chain who are certainly needed and that is having an impact. We are optimistic at what we hear from medical experts that this wave will hopefully peak very quickly and we'll continue to see asymptomatic or very mild illness for the vast majority of people, particularly those who are vaccinated and boosted, which we think is a good thing.
I think if you look at the industry over the past couple of years dealing with COVID, this is just one more strain that they are having to deal with to get through this thing. Regarding the vaccination mandate, we are certainly concerned by a mandate that would impact our ability to staff stores and distribution centers at a time when we continue to face acute staffing shortages. Our industry is incredibly supportive of vaccines. But the reality is right now we have an acute staffing shortage, and any more pressure on that is simply going to give people the excuse or the option to walk away and go to other businesses or other opportunities that fall maybe below that mandate threshold.
The other important piece of this is testing. We have been talking to the White House regarding testing—there is simply an acute shortage of tests. We are hearing that state governments in particular are taking all capacity or most of the capacity for rapid tests before they can get to the marketplace. So even if this mandate were to go into effect, it’ll be incredibly difficult for employers to comply, because they can’t get access to tests.
One of the biggest concerns in the grocery business is the widening gap between dominant and smaller players, which creates a disruption of checks and balances. What are some steps NGA is taking to promote viability for independent community grocers in 2022?
Since this organization was founded nearly 40 years ago, ensuring a robust competitive marketplace that all consumers can benefit from has really been at the core of who we are. Unfortunately, for the past 20 or 30 years, there really has been lax enforcement of U.S. antitrusts laws. And that has allowed certain dominant players in the marketplace to get incredibly big.
We’ve seen the emergence of what we call these “power buyers” that have so much influence and so much dominance in the marketplace that they are able to influence decisions that suppliers and others make. We have seen the results of the lack of enforcement of antitrust regulations. You have hundreds of communities in rural America that no longer have local grocery stores; they no longer have local community pharmacies. They may today only have a dollar store that has a very limited selection of fresh, healthy foods. That is absolutely a concern of ours.
We believe that having a robust antitrust policy that is enforced by the FTC, (a policy) that the industry knows that agencies are paying attention to and can abide by, is better for everyone. It is better for retailers (and for) manufacturers who have the ability to push back against dominant players that may demand unfair practices. And at the end of the day, it is better for consumers and communities across this country. We’re going continue to be very much focused and invested. We’re going to continue to work with members of Congress from both parties on this, the Biden Administration, and the Federal Trade Commission to ultimately ensure that the Robinson-Patman Act is once again being adhered to and being enforced as it should.
Over the last several months, supply-chain disruption has wreaked havoc on the grocery industry. How has this affected the independent grocery community?
Everyone has been impacted by the challenges in supply chain. Those challenges have moved seemingly from category to category, certain products to other products over time. But one area where I think independents have an upper hand is ... they are often smaller and more agile, and because they’ve got stronger relationships with local suppliers and regional suppliers, they’ve been able to pivot. When they couldn’t get a certain commodity or product from a primary supplier, they were able to go to a secondary or a third supplier or go to a supplier that wasn’t even in serving retail supermarkets at the time and they were able to obtain a product.
I think we are going to continue to face supply-chain challenges. We are not only facing challenges in terms of production but also a shortage of employees, trucker shortages, ingredient shortages, packaging shortages and inflation. I think all that’s going to continue to have a significant impact probably through a good bit of 2022. At the end of the day the independents have learned how to adjust and how to pivot.
With Congress returning to work, how will you ensure NGA's "At the Heart of the Community" tagline is heard and acted upon in Washington for independent community grocers?
One of the things we have seen over in Washington over the last year or so is that big is out and small and local is in! We are seeing members of Congress on both sides of the aisle very much focused on and interested in small businesses and local businesses as opposed to very large employers, which for many years had a very strong influence in Washington. And that plays right into who we are—obviously we’re part of the community.
We’re focusing on the relationships that we have on both sides of the aisle and making sure that those members of Congress understand what our members are doing [with respect to] the community and jobs they’re creating and how policy and legislation impact our members businesses.
Something I think we do very well is we get members of Congress into stores. We do that in person. We’ve done it throughout the pandemic virtually through virtual meetings. We want to make sure we are connecting elected officials with their local constituents who can explain in real terms what is going on in their local marketplace.
The other thing we’re doing is we’re going to be very proactive. We’re not going to wait for things to come to us. We’re seeing our work on the Robinson-Patman Act and antitrust. Congress will be starting to ramp up the next farm bill, believe it or not. We’re going to be leaning in, and we’re going to be proactively working toward ensuring that the independent supermarket's voice in the $253 billion slice of the economy that they are responsible for is heard and has influence.
Many people are approaching 2022 with a sense of hope and renewal despite the current climate. How will this year be different for the NGA as the association prepares for its 40th anniversary in October?
We are going to do what we do every day—focus on the core of who we are as an organization and who our members are. It’s neat to see this historic refocus on the Robinson-Patman Act—on competitive markets, antitrust—come about on our 40th anniversary, because that really has been one of the tenets of who this organization is from Day 1. We are going to make sure we are focused on our mission, focused on our members and supporting them by making sure they not only have the tools and resources and the connections they need but that they continue to have a very strong advocate for them not only in Washington but also in the industry. We are making sure that independence voice is heard through the industry.
The other part of this is grocers in general, particularly independent grocers, are resilient. We’ve obviously faced a very challenging last couple of years, but we’re still smiling. We’re still doing great things in our stores, innovating and taking care of customers and pivoting as we need to. Our members have done that for generations, and I know that they will continue to do that going forward. NGA will be there with them to ensure they have everything they need to be successful.
On a positive note, the NGA Show 2022 is happening Feb. 27–March 1 in Las Vegas. What are you looking forward to there?
We are so excited and fortunate to be able to do this. The 2021 show we held in September was about bringing this industry together after the challenges during the pandemic. The 2022 show is about looking ahead to the future. We have dynamic content and speakers and a brand-new venue at the new Caesars Forum Convention Center. We have a slew of new exhibitors and more coming in every single day. I think it’s going to be a high-energy and fun event. We will continue to do it safely with our protocols, which worked incredibly well for the 2021 show—we had no problems whatsoever. We are just looking forward to having an amazing event and bringing the industry together so that we can look to the future and really embrace the opportunities independents have been given and have in front of them right now so they can make investments in their companies and their people and really take what they have earned over the last couple of years and use that to grow for the future.
At the end of the day, the grocery business is a relationship business. You make those relationships, and you work on those relationships when you come together in person, and it’s just who this industry is and who we are. So thanks to the resiliency of our members who have been in their stores and distribution centers every single day and have done an amazing job. We know that we can continue to bring this industry together in person and do it safely. We can ensure that the independent industry is going to have the information, tools, resources and connections they need from this show to be able to bring back and implement in their businesses right away to make sure the next year is going to be incredibly successful.