Retail View: Significant changes evident in grocery industry

by Tim Linden | March 04, 2016

Smaller formats, home delivery and foodservice at retail are just a few of the changes coming to the food retailing business, according to Steven Muro, president of Fusion Marketing, based in Chatsworth, CA.

Muro, who has had a long career designing marketing programs for both produce and consumer packaged goods, spoke at the most recent luncheon meeting of the Fresh Produce & Floral Council, held Feb. 25 in Pleasanton, CA. He broadly defined his topic as “Trends Changing Retail,” but noted that these are not secret or hidden trends but rather changes that are very apparent.Steven-Muro 1Steven Muro

“They are all right in front of us,” he said.

At the top of his list is the smaller-format store currently being used by many different retailers to market and sell fresh foods. Although there have been some large failures in this arena, Muro said there are many more successes.  

Of course, one of the biggest impacts of this trend is that with less square footage, space is at a premium, and it follows that there will be fewer items for sale. Suppliers, he said, have to make sure their products are relevant.

Quoting noted social media strategist Sunita Biddu, Muro said, “If your presence doesn’t make a difference, your absence wouldn’t either.  Make it count.”

Muro said retailers are moving toward promoting fewer items.  However, this is not all bad for the produce industry as “big and fresh and in your face” is a growing trend in retail newspaper ads. Suppliers have to figure out how they end up on the front page of a food store advertisement, he said.

Using information to drive sales is another trend that Muro sees growing. While retailers often say they don’t want clutter in their departments, this agency executive said shoppers are clamoring for more information.

One need look no further than Trader Joe’s to validate this position, as that retailer markets an array of products with a plethora of information that consumers seem to love.

That information provided in a fun and interesting way is the embodiment of another trend: creating a “shopper experience.”

Muro showed a slide of a store that is using space in its produce department to grow mushrooms. “How can you get more local and fresh than that,” and at the same time create a unique experience for the consumer, he asked.

That quest for satisfying shoppers with a fun experience is also evident in one of the biggest retail trends he sees, which is introducing foodservice to the supermarket in a very big way.

Muro said that the fastest-growing job opportunity for newly schooled chefs is in the grocery store, as many retailers now employ an executive chef as well as cooks on-site.

“Ninety-five percent of retailers surveyed either have it now or are planning to add it soon,” he said.

Those foodservice forays include grab-and-go offerings, takeout and even eating in, with mini cafes set up in a growing number of stores.

Muro is also confident that home delivery of fresh produce is a trend that is not going away. In his hotel room the night before, he searched online for home delivery of food services for the San Francisco Bay Area and found 78 companies participating in the activity in one way or the other.

He noted that Uber, the company revolutionizing the taxi ride, is telling millennials they never have to go the grocery store again. Google and Amazon are just a couple of the many high-tech companies entering this space.  

“Home delivery is not going away,” he reiterated.