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Secretary-Treasurer’s Report

Big changes seen for the grocery industry

Experts have been writing about developments that are changing the ways customers will buy their groceries. How these trends will affect those who work in the industry will be impossible to predict with any accuracy, but our union will continue to monitor them closely and will act vigorously to ensure our members’ rights are protected at every step of the way.

Writing in Forbes magazine, analyst Laura Heller writes about four trends that she believes will change food stores in the years to come:

  • New retailers on the horizon: Two German non-union retailers known for their extreme cost savings are opening stores in the U.S. in 2017. The first is Lidl, which will open its first U.S. store in Virginia this summer. By the end of 2017, Lidl plans to open 20 stores in North and South Carolina. Aldi operates more than 1,600 stores in the U.S., and Lidl is expected to try to match Aldi’s store counts. This would increase competition but also could endanger union market share and lower wage standards.
  • Online shopping: This young trend hasn’t taken off as many industry analysts expected. While Amazon is tinkering with grocery delivery and its cashier-less Amazon Go store, Walmart is trying to expand its grocery pickup service. Kroger also has a similar service called ClickList in which consumers can reserve one-hour windows to pick up their groceries at their local stores. Look for these experiments to continue.
  • Healthier food options at traditional chains: This trend is already hurting the bottom line at Whole Foods, which has posted six consecutive quarters of sales declines now that most traditional grocery retailers offer organic foods. Consumer demand for fresh and healthy foods is driving many retailers to offer more of these options as well as packaged foods without artificial flavors and ingredients.
  • More consolidation: As the airline industry experienced in the 1980s and ’90s, the grocery industry could undergo a new round of corporate mergers. Smaller independent chains may be unable to match the prices offered by their dominant competitors.

Catering to millennials

Meanwhile, analyst Bob Sullivan writes the next wave of changes will be made to catch the attention of millennial shoppers. 

“It’s hard being an old-fashioned grocery store these days,” he writes for Credit.com

“Adults, for the first time since such data was recorded, are spending more money eating out than cooking in,” he says. But even when they do buy their food, young shoppers want something different from a grocery store than what is offered by many of the longstanding chains. 

“Small, boutique food shops that are part-restaurant, part-brew pub, part-exotic grocer are all the rage,” Sullivan writes. 

The irony is that small specialty grocers used to rule the land in the first half of the last century before supermarkets catered to larger groups of shoppers. Now, Sullivan writes, “the do-everything grocery store is struggling to stay relevant.” 

Like it or not, changes are coming, and it’s best to be aware of them so we can help guide them instead of merely reacting to them.