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Economic Troubles Foreshadow a Tough 2014 for Mainstream Retailers

The year 2013 will go down in the record books as one of the most challenging in recent memory for mainstream retailers. 2014 promises more of the same.

 

The big events of 2013 and the impact they may have in 2014 and beyond were explored by a blue-ribbon panel of industry experts and journalists assembled by PLMA. An online video version of the panel discussion appears this month on the PLMALive! website, and can be viewed by clicking on PLMALive.com.

 

The panelists agreed that economically-squeezed shoppers played a pivotal role in 2013. "The middle has changed," said one panel member, "the rich are getting richer and the poor are getting poorer, serving people in the middle is not the place to be." This economic division resulted in especially strong growth for value-oriented retailers such as Dollar General, Family Dollar and Aldi.

 

Mainstream supermarkets and mass merchandisers are fighting back by introducing opening price point store brand programs to keep their customers from going over to their price-oriented competitors.

 

For many younger shoppers, often called "millennials," price is less important than convenience. Ordering online and never having to enter a store may be the ultimate in convenience for them.  While online grocery retailing has grown slowly in recent years, 2013 might be the year when everything changed. Amazon made its first expansion of its Amazon Fresh program. "You have to think Amazon's time is coming really soon," declared a panelist.

 

Panelists participating in the PLMA Live 2013 Year-End Review were: Joe Azzinaro, senior researcher for PLMA; Jim Hertel, Managing Partner, Willard Bishop consulting company; Terry Lee, former executive with Safeway and Dollar General and now consultant with The Partnering Group; David Merrefield, former Editor-in-Chief of Supermarket News, and Michael Sansolo, commentator for MorningNewsBeat and former vice president of Food Marketing Institute. Tim Simmons, PLMA's vice-president, communications, moderated the session.      

 

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