Latest news with #independentgrocers
Yahoo
5 days ago
- Business
- Yahoo
Canada's independent grocers: Going beyond price and competing on value to draw customers
Canada's independent grocers are facing no shortage of challenges, from rising costs to supply chain disruptions. However, one bright spot continues to work in their favour: consumer appetite for buying Canadian and buying local. 'The impact of tariffs is a challenge. At the same time, that's resulted in an upsurge in the Buy Canada [movement] that still has not subsided,' said Gary Sands, vice-president of the Canadian Federation of Independent Grocers (CFIG), which represents over 6,900 independent grocery retailers across Canada. 'It's a classic example of a challenge becoming an opportunity,' Sands said, adding that he's optimistic that the Buy Canada sentiment will continue to work in favour of the independent grocers. While Canada's larger grocery chains, like Loblaw and Metro, are investing in new store openings to meet shifting consumer preferences for discount prices, independent grocers continue to rely on the same strategies that sustained them in the past: local sourcing, personalized service and close ties to their communities. According to a recent study published by PricewaterhouseCoopers Canada, 75 per cent of Canadians are willing to pay a premium for locally produced food. However, 62 per cent say they would choose a lower-priced imported product over a domestic equivalent. The results reveal that while Canadians prefer to shop local, their wallets might prompt them to opt for cheaper choices. In the meantime, CFIG has been supporting independent grocers with the Buy Canada movement by providing signage for them to put up in stores. 'Everybody's doing this because that's what the consumer wants,' Sands said, adding that U.S. President Donald Trump's talk of making Canada the 51st state has 'been the biggest catalyst for driving Buy Canadian that I've ever seen." Competition on value — instead of price Michael von Massow, food economist at the University of Guelph, says that while the major grocers' move to discount stores isn't good for independent grocers, most of them have always relied on other customer preferences — like convenience, and the support of local, neighbourhood institutions — to keep people coming back. Most independent grocers, historically, have not competed on price, he adds. von Massow suspects they wouldn't see a substantial loss of consumers to discount stores because their customers have already made the choice to pay more for products. Independent grocers struggle to compete on price, in part, because they don't have access to the same distribution advantages as large chains, he adds. While chains like Loblaw and Metro can buy directly from suppliers in large volumes, many independents rely on other sourcing methods, such as regional food terminals, which may not be as cost-efficient. While it's difficult to generalize independent grocers, some are trying to reinforce how they're unique from the major grocers, von Massow says. That may include focusing on the quality of local produce, custom meat products or ready-to-eat foods, or the service — staff at independent grocers can be more knowledgeable about products and their origins, and may make customers feel more valued, he adds. Sands says he has heard many suppliers call independent grocers incubators because they're often more open than chains to test new products. That openness reflects their desire to offer a unique customer experience. von Massow added: 'The ones succeeding in the current environment are doubling down on what differentiates them and taking advantage of the Buy Canadian, buy local thinking of many consumers.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Canada's independent grocers: Going beyond price and competing on value to draw customers
Canada's independent grocers are facing no shortage of challenges, from rising costs to supply chain disruptions. However, one bright spot continues to work in their favour: consumer appetite for buying Canadian and buying local. 'The impact of tariffs is a challenge. At the same time, that's resulted in an upsurge in the Buy Canada [movement] that still has not subsided,' said Gary Sands, vice-president of the Canadian Federation of Independent Grocers (CFIG), which represents over 6,900 independent grocery retailers across Canada. 'It's a classic example of a challenge becoming an opportunity,' Sands said, adding that he's optimistic that the Buy Canada sentiment will continue to work in favour of the independent grocers. While Canada's larger grocery chains, like Loblaw and Metro, are investing in new store openings to meet shifting consumer preferences for discount prices, independent grocers continue to rely on the same strategies that sustained them in the past: local sourcing, personalized service and close ties to their communities. According to a recent study published by PricewaterhouseCoopers Canada, 75 per cent of Canadians are willing to pay a premium for locally produced food. However, 62 per cent say they would choose a lower-priced imported product over a domestic equivalent. The results reveal that while Canadians prefer to shop local, their wallets might prompt them to opt for cheaper choices. In the meantime, CFIG has been supporting independent grocers with the Buy Canada movement by providing signage for them to put up in stores. 'Everybody's doing this because that's what the consumer wants,' Sands said, adding that U.S. President Donald Trump's talk of making Canada the 51st state has 'been the biggest catalyst for driving Buy Canadian that I've ever seen." Competition on value — instead of price Michael von Massow, food economist at the University of Guelph, says that while the major grocers' move to discount stores isn't good for independent grocers, most of them have always relied on other customer preferences — like convenience, and the support of local, neighbourhood institutions — to keep people coming back. Most independent grocers, historically, have not competed on price, he adds. von Massow suspects they wouldn't see a substantial loss of consumers to discount stores because their customers have already made the choice to pay more for products. Independent grocers struggle to compete on price, in part, because they don't have access to the same distribution advantages as large chains, he adds. While chains like Loblaw and Metro can buy directly from suppliers in large volumes, many independents rely on other sourcing methods, such as regional food terminals, which may not be as cost-efficient. While it's difficult to generalize independent grocers, some are trying to reinforce how they're unique from the major grocers, von Massow says. That may include focusing on the quality of local produce, custom meat products or ready-to-eat foods, or the service — staff at independent grocers can be more knowledgeable about products and their origins, and may make customers feel more valued, he adds. Sands says he has heard many suppliers call independent grocers incubators because they're often more open than chains to test new products. That openness reflects their desire to offer a unique customer experience. von Massow added: 'The ones succeeding in the current environment are doubling down on what differentiates them and taking advantage of the Buy Canadian, buy local thinking of many consumers.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
24-06-2025
- Business
- Forbes
What The C&S Acquisition Of SpartanNash Means For Grocers
Grocery wholesaler C&S has acquired rival Spartan-Nash for $1.77 billion. getty In the wake of the recent UNFI cyberattack-driven product outages that have impacted thousands of grocery stores, two of the largest grocery wholesalers are now becoming one. C&S, a privately-held distributor with over $23 billion in annual sales, is acquiring publicly-traded SpartanNash for $1.77 billion. The combined entity will manage over 60 warehouses, 200 grocery stores and service tens of thousands of independent and family owned grocery stores across the U.S. 'Being able to operate at a larger scale, supported by the combined innovative capabilities of the two companies, enables a more efficient supply chain as well as an ability to secure the best possible delivered cost of goods and promotional discounts, which are expected to translate to better pricing for community retailers and at the shelf for consumers,' the companies stated in a press release. C&S also admitted the acquisition was a competitive hedge to mass merchants such as Walmart's growing marketshare in the grocery industry, and a seeming benefit to the many independent grocers serviced by C&S and SpartanNash. C&S has plenty of cash on their balance sheet for the deal and had previously attempted to take over 600 stores as part of the failed Kroger-Albertsons merger. They recently acquired over 170 Southeastern Grocers stores via Aldi. Both chains have continued to increase their investment in retail and vertical integration throughout their supply chains. C&S also recently shut down a facility in Florida, laying off over 500 workers. The company has also been known to aggressively bust trade unions representing the employees of companies that it has acquired. By taking on SpartanNash, C&S extends their reach into new markets across the midwest and west coast of the U.S. The merger makes the already consolidated grocery wholesale sector that much more concentrated, with just four companies, including C&S, McLane, UNFI and KeHe, controlling a huge share of the business between manufacturing and retail at national chains such as varied as Walmart, Whole Foods, Sprouts, Albertsons and regional, independent and family-owned grocers. The last big wholesale merger of this scale was in 2018, when UNFI was spurred on by investors to acquire SuperValu as a hedge against Amazon acquiring Whole Foods, UNFI's largest customer. KeHe Distributors acquired DPI Specialty Foods in a smaller deal in 2023. Wholesaling is an essential feature of the U.S. grocery industry and is typically invisible to consumers. While there are still family owned, scrappy, independent wholesalers servicing grocers in many cities, the grocery marketplace will now have fewer choices for brands to use as distributors to sell into retail, or for retailers to pull their vast assortments from. Retailers play a huge part in consolidation, as they tend to have volume-dependent, contractual 'cost-plus' relationships with wholesalers that incentivize them to funnel many suppliers into a 'primary' wholesaler that manages a huge portion of their product assortment and inventory. The cost-plus mark-ups wholesalers give to key retailer partners are typically lower than the wholesalers' gross margins, meaning they have to tap many 'inside revenue' streams from suppliers to make up the difference and stay in the black. Their bottleneck in the supply chain further enables wholesalers to extract such rents from brands in the form of various fees, deductions, marketing programs, and promotional discounts, which brands pass onto consumers in the form of higher prices. Wholesale consolidation also makes it more difficult for suppliers, especially cash-strapped emerging brands and small to midsized farms and manufacturers, to avoid this deluge of rent-seeking activities. Such practices make further CPG consolidation inevitable, as incumbent brands are best positioned to afford the huge cash outlays that wholesalers demand of brands. They also make the food industry more fragile, homogenous and boring, and less likely to adapt to changing consumer preferences and less responsive to climate and geopolitical instability. At the end of the day, shareholders are the biggest winners of wholesale consolidation. The UNFI outages over the past few weeks were a stark reminder of the fragility of consolidation and centralization of grocery wholesale. One wave of cyberattacks crippled the $31 billion a year behemoth, impacting tens of thousands of stores and millions of customers, and sending retailers scrambling to food service distributors and smaller wholesale outlets for essential products. Whether it is another cyberattack, a new pandemic, new trade wars or geopolitical instability that is the fallout of Trump's latest foreign policy folly, a consolidated whole sector is unlikely to be the best model to ensure that consumers have the freshest, best quality, and most affordable food on shelves at grocery stores.
