California
3 ways grocers should invest their resources PAGE 36
the instacart effect PAGE 40
hee-sook Nelson: VP of everything else 2020, ISSUE 4
CALIFORNIA GROCERS ASSOCIATION
PAGE 66
FRESH THOUGHTS FOR A NEW YEAR
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To us, local means
California
We’re proud to offer more of what Californians are looking for – from locally grown produce to California-raised USDA choice meat. Long before local was cool, our family of stores made it a priority to buy direct from local growers. In fact, some of our current relationships with farmers started over 60 years ago. We’re working hard to be The Golden State’s favorite grocer. And we’re proud to employ more than 76,000 hard-working, talented Californians in our stores and other facilities..
To us local means…
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CGA | BOARD OF DIRECTORS
EXECUTIVE COMMITTEE
CHAIR APPOINTMENTS
Chair Hee-Sook Nelson Gelson’s Markets
Second Vice Chair Dennis Darling Foods Etc.
Secretary Hal Levitt The Save Mart Companies
First Vice Chair Renee Amen Super A Foods, Inc.
Treasurer Lynn Melillo Bristol Farms
Immediate Past Chair Phil Miller C&S Wholesale Grocers
Denny Belcastro Kimberly-Clark Corporation
Steve Dietz United Natural Foods, Inc.
Michel LeClerc North State Grocery Co.
Independent Operators Committee Chair
Elliott Stone Mollie Stone’s Markets
DIRECTORS
Kylie Bishop LaBrie The Hershey Company
David Higginbotham Stater Bros. Markets
Doug Minor Numero Uno Market, Inc.
Jeanne-ette Boshoff Molson Coors Beverage Company
Bryan Jankans Mondelēz International Inc.
David Moore E. & J. Gallo Winery
Mary Kasper 99 Cents Only Stores
Joe Mueller Kellogg Company
Saj Khan Nugget Markets
Ken Mueller Raley’s
Tyler Kidd Mar-Val Food Stores, Inc.
Bethany Pautsch Tyson Foods, Inc.
Nancy Krystal Jelly Belly Candy Co.
Subriana Pierce Navigator Sales and Marketing
Lori Brown Post Consumer Brands Elaina Budge Costco Wholesale (Bay Area) Pamela Burke Grocery Outlet, Inc. Doug Christman Beverages & More Inc. Willie Crocker Bimbo Bakeries USA Jake Fermanian Super King Markets Damon Franzia Classic Wines of California Sergio Gonzalez Northgate Gonzalez Markets
CALIFORNIA GROCERS ASSOCIATION
President/CEO Ronald Fong Senior Vice President Marketing & Business Development Doug Scholz Vice President Communications Dave Heylen Vice President Government Relations Kelly Ash
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Hillen Lee Procter & Gamble John Mastropaolo Chobani, Inc. Jonathan Mayes Albertsons, LLC Kelli McGannon The Kroger Company Mark McLean CROSSMARK
Senior Director Events & Sponsorship Beth Wright Director CGA Educational Foundation Brianne Page Director Digital Communications Nate Rose Director Administration & Human Resources Jennifer Gold
Chris Podesto Food 4 Less (Stockton)/ Rancho San Miguel Markets Mike Ridenour The Kraft Heinz Company Jaclyn Rosenberg Nielsen Jeff Schmiege Unilever
Jeff Severns PepsiCo Beverages North America Greg Sheldon Anheuser-Busch InBev Scott Silverman KeHE Distributors, LLC Lee Smith Smart & Final Stores Diane Snyder Whole Foods Market – Southern Pacific Region Josh Southerland Reyes Coca-Cola Bottling LLC Rick Stewart Susanville Supermarket IGA Joe Toscano Nestlé Purina PetCare Richard Wardwell Superior Grocers Karl Wissmann C & K Market, Inc.
Controller Gary Brewer
Subscription rate for non-members is $100.
California Grocer is the official publication of the California Grocers Association.
© 2020 California Grocers Association
1005 12th Street, Suite 200 Sacramento, CA 95814 (916) 448-3545 (916) 448-2793 Fax www.cagrocers.com For association members, subscription is included in membership dues.
Publisher Ronald Fong rfong@cagrocers.com Editor Dave Heylen dheylen@cagrocers.com For advertising information contact: Maria Tillman mtillman@cagrocers.com
CONTENTS | ISSUE 4
FEATURES HEE-SOOK NELSON,
36 3 Ways Grocers Should Invest Their Resources
66
VP of Everything Else Get to know the new CGA Board Chair
WD Partners breaks down the key areas operators should target for growth in 2021.
COLUMNS President’s Message Embracing A New Year. . . . . . . . . . . . . . . . . 9
40 The Instacart Effect If Amazon is trying to build the iPhone of the grocery industry, Instacart is the Android.
Chair’s Message Reimagining Normalcy. . . . . . . . . . . . . . . . 12 Viewpoint Zoom Towns, 15-Minute Cities, & The Dawning of Opportunity. . . . . . . . . 16 Capitol Insider Lawsuit Challenges Newsom’s Emergency Authority. . . . . . . . . . . . . . . . . 20 Government Relations The View from Here. . . . . . . . . . . . . . . . . . 24
44 California Food Prices and the Outlook for 2021 An examination of the dynamics impacting food prices during the pandemic.
48 52 56 62
Shopper Trends You Need to Know
What foot-traffic data reveals about shopper priorities.
The Enterprise Risk Protection Reset
How to move forward in the aftermath of Prop. 20’s defeat.
Migration and the Impact on Store Formats
Current trends reveal an exodus from urban cores, but will it last?
Inside the Beltway Food Retail Industry Speaks About Public Policy.. . . . . . . . . . . . . . . . . . 28 Washington Report Entering the Biden Era. . . . . . . . . . . . . . . . . . 34 Mommy Blogger The Comfort and Nostalgia of Shopping at Mom’s Market. . . . . . . . . . 80
DEPARTMENTS Outside the Box New Retail Perspectives.. . . . . . . . . . . . . . . 76 Index to Advertisers. . . . . . . . . . . . . . . . . . 78 CGA News. . . . . . . . . . . . . . . . . . . . . . . . . . 79
The Opportunity to Elevate
Why grocers should double down on service and value
CAL I FO RNIA GRO CER | 7
Purina trademarks are owned by Société des Produits Nestlé S.A. Printed in the USA.
PRESIDENT’S MESSAGE
Embracing A New Year
RO N F O N G PR ES IDEN T AN D CEO CALIFOR N IA GR OCER S AS SO CIATIO N
2020 did not look anything like we thought it might. But as we look ahead to 2021, it’s time to reinvigorate our thinking. Before writing this column, I thumbed through the first 2020 issue of California Grocer. It’s striking how different the future can sometimes play out compared to our best intentions. Despite the ways that COVID-19 disrupted our daily lives and businesses, 2020 was a remarkable year for California’s grocery industry. We showed tremendous levels of resiliency in the face of serious challenges. We kept our communities fed while working through wild swings in demand. The plaudits this essential industry has earned are well-deserved. I would also argue the partnership between your Association and the grocery industry has never been stronger. Tasked with navigating increased attention from consumers and media, we shared vital information. We collaborated to create a “Shop Smart, Don’t Overfill Your Cart” media campaign to urge shoppers to avoid overbuying. Membership continues to grow. With your help we built stronger relationships with elected officials, as well. I had the honor of serving on Gov. Gavin Newsom’s Task Force on Business and Jobs
Recovery, helping to raise the industry’s profile at the Capitol. The Association became a first-point of contact for local government leaders working through the state’s “Local-Up” approach to combatting COVID-19.
iStock
These thought leaders tackle wide-ranging topics that include ways to invest in your business, how to protect your store from retail theft, food-price forecasting and even how the urban exodus impacts grocery retail. As you head into the new year, we hope these pages provide value worth returning to when you are in need of food for thought. At CGA HQ we’re aiming to get back to business in 2021. Last year, we suspended educational events like Store Leader Seminars and industry gatherings, such as the Hall of Achievement Dinner and golf tournaments. Our plan is to once again serve as a waypoint for our grocery community, bringing people together to grow their careers and make new connections. We’re not through the pandemic yet, but here’s to hoping for a healthy and successful 2021, plus the opportunity to seeing your smiling faces in the future. ■
Up against a global pandemic, our goals, our well-crafted plans can seem almost quaint. Still, we thrived. Now, it’s time to continue to build on our momentum. This issue’s theme is “Fresh Thinking for a New Year.” Inside its pages you’ll find we expanded from our normal three or four features to curate several new perspectives to help stimulate your thinking.
CAL I FO RNIA GRO CER | 9
! s r e e h c The Stater Bros. Markets family
would like to thank outgoing CGA chair, Phil Miller for his leadership during the COVID-19 pandemic and welcome incoming CGA chair, Hee-Sook Nelson. Thank you Hee-Sook for your great partnership over the years, we look forward to working with you more in the upcoming year as Chair of the CGA Board of Directors. Phil Miller, C&S Wholesale Grocers
Hee-Sook Nelson, Gelson’s Markets
CAL I FO RNIA GRO CER | 11
CHAIR’S MESSAGE
Reimagining Normalcy
P H I L M I L L ER C& S WHOLE S ALE GR OCE R S
We have experienced a period of extraordinary uncertainty, the likes of which most of us have not lived through in our lifetimes.
people of all ages, gender and ethnicities work in a virtual safe space fostering inclusion and the sharing of ideas. Before the pandemic, many of these thoughts may have remained unshared.
Worries about public safety, economic security, health and wellness have all combined with an undercurrent of emotional disturbance from rising levels of anxiety, depression, fear and stress.
This disruption of our lives – the loss of normal interactions and the financial fears of losing our livelihoods – has become a bigger threat than the virus itself. We are all eager to get to a new routine that will help counteract or at least counterbalance the defensive posture we have been forced to assume in 2020.
It is imperative during these times that our leaders find authentic and creative ways to bring people together, energize our progress into the future and help reimagine normalcy. Psychological safety and emotional intelligence are foundational as we travel this road together. These components of health and wellness create an environment where the absence of interpersonal fear is woven into the fabric of our society. For many people this pandemic instills a concern for physical safety. On the bright side, the fact it is a fear shared by many, can inspire us to be more open with our feelings and concern for human life. This collective fear could potentially become a driver for workplace collaboration and innovation that supports a reimagined environment. A workplace where diverse
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iStock
“We are all eager to get to a new routine that will help counteract or at least counterbalance the defensive posture we have been forced to assume in 2020.”
Our normal face-to-face workplace interactions have been replaced with formats like Zoom and Microsoft Teams. While our new virtual tethers to connectivity lack some of the intimacy of in-person meetings, we are seeing a greater adoption of these new tools and a wider network of interactions. To what extent is this increased use of technology aiding or hindering our emotional and psychological well-being? How do we stay connected to each other to try and mitigate the negative thoughts and feelings induced by the disruption of life as we knew it?
CHAIR’S MESSAGE
“It is incumbent on all of us to embrace the responsibility to sustain a level of calm and positive resolve in the midst of it all.”
As humans, we are hardwired to pick up on the emotions of others, and our current state of interacting over video make that a bit more difficult. It is incumbent on all of us to embrace the responsibility to sustain a level of calm and positive resolve in the midst of it all. Whether you are a business owner, parent, coach, teacher or in a position of leadership, it is important to remember that we are just people serving people in everything we do. The degree to which leaders can manage their own levels of stress, and the reason why emotional self-awareness is so important right now, is because leaders can be infectious and have the ability to foster positive or negative feelings for others. As we search for our new normal in the days, weeks and months ahead, it is important to sustain a positive outlook.
There are any number of activities that can activate and renew one’s mind, body and soul and fill us with sustainable energy. Activities such as better rest, more frequent recovery breaks, meditation, prayer, yoga and exercise. It is almost impossible to be positively infectious to others unless we are feeling inspired and sustained ourselves. Now is the time for leaders to invoke a higher degree of reflection and spend more time talking about our shared sense of purpose and core values. Most importantly, we should prioritize spending time to emotionally check in with family, friends, co-workers and colleagues. This will have a dual benefit of helping people move past the present suffering and begin to reimagine and create our new future together. ■
C O N G R A T U L A T I O N S
.
BRISTOL FARMS WOULD LIKE TO WELCOME THE INCOMING CGA CHAIR
HEE-SOOK NELSON Gelson’s Markets
T H A N K
Y O U .
WE WOULD ALSO LIKE TO THANK THE OUTGOING CHAIR FOR HIS DEDICATION AND CONTRIBUTION
PHIL MILLER
C&S Wholesale Grocers
CAL I FO RNIA GRO CER | 13
Fresh‌
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Contact C&S today to learn how we can help grow your business!
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VIEWPOINT
Z oom Towns, 15-Minute Cities, & The Dawning Of Opportunity K EV I N CO U PE FOUN DE R , MOR N IN GN E WS BEAT.CO M
Big stores catering to suburbia are staging a comeback, but retailers should continue to explore smaller formats that can fit into new developments. I hate it when I’m proven to be wrong. I especially hate it when I should’ve been right. Case in point – the urbanization of America, which had the potential of being a significant change agent for a lot of retailers that depended on the suburbs for most of their business. For years now, I have been arguing that a lot of retailers were dependent on a set of scenarios for their success. Young people get married while in their mid or late-twenties, have a few kids, move to the suburbs where they buy a house with a basement and a two-car garage, plus a minivan or SUV that they would use to ferry their kids back and forth to school and extracurricular activities, as well as to stores where they would do big shopping trips. My argument was that retailers building stores designed to cater to this demographic could find themselves disadvantaged as certain trends unfold. People are getting married later, if at all, and having fewer children. They are also moving back to America’s cities, living in smaller homes,
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and might not even own cars…all of which meant that retailers might need to recalibrate their approach to a lot of things, including real estate selection and format. I was cruising along, making that point in speeches and columns, supremely confident that the research backed up my logic. In retrospect, it also may be that my conclusions were colored by my own preferences – I’ve lived in the suburbs for virtually my entire life, and am anxious for the opportunity to move to a more urban environment. (Probably a good thing I am a pundit, not a researcher.) And then, COVID-19. Pandemic. And the world changed. It has been instructive to read a number of stories chronicling the degree to which the pandemic has reshaped public preferences and tastes in terms of where people want to live. Fast Company had a story the other day about how “boom towns” have given way to “Zoom towns,” or communities that are friendly to the remote employees that have grown in numbers since the pandemic hit
and forced the virtual shutdowns of many urban areas that for months resembled ghost towns. “There has been a drastic increase in remote work since March, when the pandemic hit the U.S., Fast Company writes. “Nearly 60 percent of employees are now working remotely full or part time, according to a recent Gallup poll. Nearly two-thirds of employees who have been working remotely would like to continue to do so, according to that same poll. That would seemingly give workers a lot more flexibility when it comes to where they call home.” Flexibility, it seems, that made many people prefer communities with fewer than 25,000 people, “were within 10 miles of a national park, monument, forest, lake, or river; and at least 15 miles from a census-designated urban area.” Anecdotally, there have been a lot of stories about this recently, talking about how residential and commercial rents in suburban areas are on the rise while in cities they are declining. So maybe I was wrong. Big stores catering to suburbia – and growing rural areas that are becoming suburb-like – may have more of a future than I thought. Except…
VIEWPOINT
“I am intrigued by the notion of 15-minute neighborhoods, because it expands the concept beyond an urban framework.”
iStock
There’s an interesting twist to this preference. Just because people don’t want to live in an urban area – when you’re worried that there could be yet another shutdown because of a pandemic (it seems inevitable that there will be a COVID-21 or COVID-23), having a yard and a patio seems like a fairly high priority – doesn’t mean you don’t want urban-style amenities. In the town where I have lived in Connecticut for more than three decades, for example, there is an enormous amount of development going on, creating mixed-use developments that will offer housing, offices and urban-style retail. These developments were being planned before the pandemic, but their makeup is changing with virtually every passing day, as the developers deal with changing demographics (people who have moved to the area from New York City just since February, seeing a ’burbs as being safer, more nurturing, and an environment where pandemics and other natural and unnatural disasters can be ridden out in greater comfort) and subsequent interest from retailers that previously might not have been interested in such a location.
All of which makes me think that even if there is a more robust future than I might’ve predicted for big suburban stores, it also might make sense for some of those retailers to continue to explore smaller formats that can fit into such developments. They could quite literally be feeder stores – outposts that would establish brand relevance in a smaller footprint, focusing on fresh food within their walls, but also serving as e-commerce pickup locations that are closer to the ultimate consumer. I’ve also been intrigued by the coining of another new term – the “15-minute city” – that is relevant to this conversation. This term is used to describe a small city in which virtually all your needs can be met within a 15-minute walk or bicycle ride. If you don’t work at home, you can walk to your office. Your kids can walk or bike to school. You can walk or bike to a wide variety of retailers and restaurants. Paris, France, has embraced the concept of a 15-minute city – or at least creating 15-minute neighborhoods within its borders – as a way of improving its ability to recover from the impact of the pandemic.
It builds community, and can help improve sustainability and the health of locals when done right. I am intrigued by the notion of 15-minute neighborhoods, because it expands the concept beyond an urban framework. A 15-minute neighborhood would be one in which residents have large expectations that they will expect their local governments, school systems and yes, their retailers, to meet or exceed. Are you prepared to address and cater to those expectations? Mark Twain once said, “Buy land, they’re not making it anymore.” The fact is, new opportunities for retailers to find ways to be relevant and resonant to their customers are emerging every day. The pandemic refocused people’s minds and priorities, and if retailers adjust along with them, reinventing and rethinking their offerings, there may be considerable upside. Of course, I could be wrong. ■
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ADVERTORIAL
Q&A
WITH JAVIER ROSADO PRESIDENT & CEO OF TRUGROCER FEDERAL CREDIT UNION TruGrocer Federal Credit Union provides financial services to grocery industry employees, and their families, throughout the United States and is the only Federal Credit Union chartered to serve this unique group.
About TruGrocer TruGrocer Federal Credit Union is the only federal or state credit union in the United States that has been specifically chartered to serve grocery industry employees and their families. This includes not only employees who work for grocery store chains, but also includes grocery wholesalers that primarily sell to grocery stores. There are over 3.4 million grocery workers in the United States. Since chartered in 1965, TruGrocer has maintained a solid history of supporting the financial needs of people in the grocery industry and understands challenges unique to the industry and industry workers. TruGrocer stays involved in the grocery industry through its participation in the National Grocers Association (NGA), the California Grocery Association (CGA) and through its National Advisory Council (NAC) made up of volunteers from TruGrocer’s various nationwide grocery partners. TruGrocer’s partnership with industry supporters, such as FMS, also keeps the Credit Union well informed on industry related trends and issues. What Makes TruGrocer Unique? Unlike many other credit unions that are limited to select employer groups or geographic communities, TruGrocer’s charter allows grocery and grocery wholesale employers to offer their associates a credit union employee benefit without having to submit for federal or state approval, or be concerned with geographic limitations. TruGrocer has stayed true to credit union principles and the philosophy of “common bond”. While TruGrocer offers many of the same financial services as a bank, it is not like a bank nor does it operate like a bank. TruGrocer’s management team and volunteer Board of Directors is committed to providing valuable financial services to grocery industry employees, while not charging members outrageous fees. TruGrocer typically beats the competition with regard to savings rates, loan rates, service fee rates and the number of no-fee financial services. For example, TruGrocer checking accounts have no minimum balance requirements, no monthly service fee, no per transaction fee, no service charge for using a non-
TruGrocer ATM and no fee to replace ATM/POS/Debit Card plastic. By partnering with TruGrocer, grocery employers can help their employees keep more of their hard earned month. Another advantage of partnering with TruGrocer is assurance that employees considered “un-bankable” will be able to open accounts, giving them another opportunity to establish good credit and good credit habits. Employers can eliminate costly “Pay Card” programs and have their employees utilize a checking account at TruGrocer, direct deposit and a TruGrocer Debit Card. Employees have access to their funds 24/7 at over 30,000 CO-OP Network surcharge free ATM’s nationwide (and TruGrocer doesn’t charge members a “back end” service fee for using an ATM not owned by TruGrocer!). What else does TruGrocer Offer Grocery Industry Employers? There are many compelling reasons to partner with TruGrocer, including: • The opportunity to differentiate a company with a distinctive competitive advantage; • TruGrocer is committed to the grocery industry, unlike credit unions whose membership is open to everyone who works or lives in a designated geographic area or works for a specific company; • Offering a credit union is a great employee benefit, at no cost to employers, which enhances an employer’s benefit package and value proposition; • Marketing materials can be co-branded at a grocery partner’s request, helping to strengthen an employer’s image as an “employer of choice”; and • Save time and money by eliminating payroll cards – direct deposit to TruGrocer, with an ATM/POS/Debit Card, is all employees need and if their card is lost or stolen, they work directly with TruGrocer staff for a free replacement.
CAPITOL INSIDER
Lawsuit Challenges Newsom’s Emergency Authority LO U I E B ROW N IN THE S ACR AMEN TO OFFICE O F KAHN, S OAR ES AN D CON WAY, LLP
Without the numbers to push back against Gov. Gavin Newsom in the Legislature, two Republican assemblymembers have used the courts to challenge the Governor’s pandemic executive orders. Brown
On Monday, November 2, 2020, the Sutter County Superior Court issued a tentative decision declaring Gov. Gavin Newsom’s Executive Order N-67-20 unconstitutional and finding the California Emergency Services Act (CESA) does not allow the Governor to amend or create statutory law.
stating the issue of determining how broad the powers of the Governor are under CESA were ripe for judicial determination.
This case was brought by two Republican legislators, Assemblymembers James Gallagher and Kevin Kiley, after Governor Newsom issued Executive Order 67-20, which required all county election officials to use the Secretary of State’s barcode scanning procedure to track mail-in ballots. This order also provided that counties not subject to the Voter’s Choice Act shall not be required to make more than one polling place available per 10,000 registered voters, so long as they are compliant with specified conditions, among other things, required ballots to be mailed to every voter in California.
In consideration of the arguments presented during a court trial held in October, the court analyzed whether CESA allows the Governor to exercise legislative powers by changing or creating new statutory law, recognizing this controversy as one of widespread public interest that elicits judicial consideration. CESA (Govt Code §§8550 et seq.) states a governor may “make, amend, and rescind orders and regulations necessary” during a “state of war or state of emergency,” and that “whenever the state of war or state of emergency has been terminated” those orders and regulations cease to take effect (Govt Code § 8567). Additionally, CESA allows the California Governor to suspend a statute that prescribes a protocol for state business (Govt Code § 8571).
Newsom’s legal team first requested the court to dismiss the case because the Legislature had acted after the Executive Order passing legislation to accomplish the same. The court denied the motion
Plaintiffs expressed concern about this change to voting protocol and argued the Governor lacks authority under CESA or the California Constitution to unilaterally amend existing statutory law and asked the Court to
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find it an unconstitutional delegation of authority, violating the separation of powers. The Governor argued that CESA grants broad police power to the Governor and to support this claim, pointed to “the Legislature’s long-time acquiescence” to the practice of amending statutory law during emergencies. The court upheld the separation of powers doctrine under the California Constitution, Article III Sec. 3. The court reiterated that the Constitution authorizes the legislative branch as the exclusive authority to create and amend law, while the executive branch is authorized to ensure that law is faithfully executed. Finding Executive Order N-67-20 changed sections of the Elections Code, thus exceeding the Governor’s authority under CESA, the court declared the order invalid. Finally, the court found this as good cause to issue a permanent injunction to prohibit the Newsom Administration from creating or amending statutory law under CESA. The impacts of this decision will reach well beyond elections. A review of the Governor’s Executive Orders while the Legislature was on COVID recess finds a number of actions relied on Government Code Section 8550 et seq. as authority for the action.
CAPITOL INSIDER
Executive Order 51-20 which provides for two weeks of supplemental paid sick leave for employees in the Food Sector states “in accordance with the authority vested in me by the State Constitution and statutes of the State of California, and in particular, Government Code Sections 8567, 8571 and 8627, do hereby issue the following Order to become effective immediately.” While this was done to provide conformity with the Families First Coronavirus Response Act (FFCRA), the main difference is the FFCRA was an act of Congress signed into law by the President. No corresponding legislative act occurred in California. Executive Order 62-20 extended workers compensation benefits to employees with any COVID-19 related illness using the same Government Code sections as authority. SB 1196 was later passed codifying much of the language included in Executive Order 62-20. Does creating a new benefit equate to
creating statute? If yes, is it possible that any claims that occurred between the issuance of the Order and passage of the bill could be deemed null and void based on the findings of the Sutter County Court? Without specific litigation on this matter, we may never know. However, if the decision is upheld, we may see several actions brought on this Executive Order. As expected, the Newsom Administration has stated its intent to appeal. If the decision is upheld, Governor Newsom and future governor’s will clearly be limited in the type of actions taken during a State of Emergency. If overruled, it paves the way for Governor Newsom and future Governor’s to act with a broad brush during times of emergency, and deems the Legislature unnecessary during those times. ■
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Congratulates
The Daily
BY CALIFORNIA GROCERS ASSOCIATION
Hee-Sook Nelson Gelson’s Markets
@CalGrocers
CAL I FO RNIA GRO CER | 21
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Congratulations!
Hee-Sook Nelson Gelson’s Markets
2020-2021 CGA Board Chair
CCCatulatiis!
C�gratulates Hee-Sook Nelson Gelson’s Markets
2020-2021 Chair of the CGA Board of Directors
Hee-Sook Nelson
of on becoming the Chair of the California Grocer’s Association Board of Directors
CAL I FO RNIA GRO CER | 23
GOVERNMENT RELATIONS
The View From Here
K EL LY A S H V ICE PR ES IDEN T CGA GOV ER N MEN T R ELATION S
The November General Election held plenty of surprises for California politicos, and with one of two Senate seats open, 2020 might not be done making news. 2020 will forever be known as a unique year. The Olympics were postponed for the first time since 1944, Australia and California experienced devastating wildfires seasons, the President faced impeachment, Beruit was rocked by a devastating explosion, murder hornets made their way onto the map, and a global pandemic shut down many countries and continues to change the way we live life and do business. The November General Election was no exception. While it’s no surprise that California’s electoral votes went to Biden and Harris, there were other unforeseen outcomes that are worth highlighting. Counter to pollsters that predicted another “Blue Wave” in California, the Assembly Republicans held most of their minority seats. Incumbent Assembly Democrats faced hard-fought battles from within their own ranks, thanks to their supermajority status and some eager outside interests. In the Senate, it was a different story. Democrats added three seats to their supermajority, and they now hold a 31 to nine seat edge. This result is closer to what some projected. 24 | CAL I FOR N I A G R OC E R
Looking towards vacant seats, there will be a special election for Sen. Holly Mitchell’s District 30 slot because Mitchell earned a spot on the Los Angeles County Board of Supervisors. Asm. Syndey Kamlager recently announced her candidacy for this vacant seat to run against political novice Cooper Heffner. At the federal government level, Congressional Republicans secured new seats. This is notable because they have not flipped a seat since 1998. The party both defeated incumbent Democrats and added vacant seats formerly held by Democrats. While this is an achievement for the California GOP congressional delegation, the Democrat delegation still holds a supermajority of the Congressional seats. Not to be outdone, California’s senatorial makeup will see some changes as well. With Senator and soon-to-be Vice President Kamala Harris leaving her seat, the floodgates for influence-peddling are open as Gov. Gavin Newsom seeks to fill this vacancy. California’s Latino Caucus argues
the state needs a Latino senator while the LGBTQ Caucus argues the same – only to highlight a couple of the interested groups. It will be interesting to see who Newsom taps for the job and how he will be able to appease all of the special interests coming his way on this. One must also consider how this appointment fits into his own political aspirations. Names like Rep. Karen Bass, Secretary of State Alex Padilla, Attorney General Xavier Becerra, and Los Angeles County Supervisor Hilda Solis have all appeared in speculations. One thing that is likely…Newsom likes to make history. His most notable political act thus far came as mayor when he decided to allow same-sex couples to marry in San Francisco. With all this speculation and so much at stake, we can be sure that the surprises are not over. If there is one lesson to be learned from 2020, it’s that things can change in a moment. ■
Thank you to this year’s honorees of the Chair’s Circle. Criteria: Is a member of the Association in good standing, exceeded a minimum annual participation of $60,000 and participate in a minimum of five individual sponsorship opportunities with the California Grocers Association and/or CGA Educational Foundation. Anheuser-Busch InBev Bimbo Bakeries USA C&S Wholesale Grocers Coca-Cola North America/Reyes Coca-Cola Bottling, LLC Kellogg Company Kimberly-Clark Corporation Molson Coors Tyson Foods, Inc.
Congratulations 2021 CGA Chairman Hee-Sook Nelson Thank You for Your Service and Leadership
At Kimberly-Clark, our team is committed to leading the world in essentials for a better life, with products sold in over 175 countries. ® Registered Trademark and TM Trademark of Kimberly-Clark Worldwide, Inc. © KCWW. © Disney © Disney/Pixar
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INSIDE THE BELTWAY
F o o d R e ta i l I n d u s t ry S p e a k s A b o u t P u b l i c P o l i cy J EN N I F ER H ATC H ER S E N IOR V ICE PR E S IDE N T, GOVERNMENT AND PUBLIC AFFAIR S FOOD MAR KETING INSTITUTE
FMI’s analysis explores retailer sentiment ahead of 2021. As you may know, the Food Marketing Institute has published an annual compilation of industry trends for 71 years. This year’s annual Speaks analysis of the food retail industry is unique. By its very nature, Speaks is reflective – asking leaders to look back on the past year, in this case, 2019, and then make some projections about where they think their companies and the industry are headed.
channel would soon receive, 67 percent of retailers experimented with e-commerce and investigated new technologies. This year, some 83 percent are investing in the enhancement of their online businesses.
Obviously, there were a lot of challenges with this year’s survey. First, asking people to take the time to complete this survey when the COVID-19 emergency demanded 100 percent of their attention was a significant request. Second, asking respondents to ignore COVID-19 when offering their evaluations was impossible, especially when it would factor heavily in their projections for this year.
Likewise, some old and well-known, nagging culprits – credit and debit card interchange fees, rising health care costs, and higher wages and benefit expenses – continued to play havoc with the profit margin.
By most measurements, 2019 was a good year for the retail food industry. Same-store sales rose 3.3 percent, and retail executives noted that the national and local economies had positive impacts on retail business. Online sales jumped from 1.4 percent to 2.5 percent of total sales and, in an almost precognitive preparation for the boom this
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Of course, 2019 also had its trials and tribulations, with more than half of retailers reporting that international tariffs had a negative impact on the bottom line.
But, one cannot look back on 2019 or make intelligent projections about 2020 without acknowledging the elephant in the room… or in this case, the microbe in the room – COVID-19. So, as we review this data, we will address some pre-pandemic realities, but also pay attention to how a virus undetectable to the human eye has changed the way we look as an industry, the way we view our work, and the way we contemplate our lives.
On federal, state and local levels, government relations truly kept the plot interesting as the COVID-19 drama unfolded and continues its run. At FMI, we’ve always known the food industry is crucial to America’s success as a country, but it took a nationwide emergency to amplify that fact for all the world to see. We can be proud of the way our industry responded, working with others and modeling the understanding that we will get through this by all pulling together. From Day One, we wanted to ensure all Americans the industry and government were working closely with stakeholders across the food and consumer products supply chain to ensure that stores stay open and stocked with the products consumers needed. It was also crucial that we be designated as essential businesses. All along, we remained sensitive to the varying needs of customers, including our WIC and SNAP shoppers, and the food banks our stores support. We were (and remain) committed that the availability of food should not be something Americans had to be worried about – on top of all their other pandemic-related concerns. Making that conviction a reality required strong and continuous public-private partnerships with a wide range of government agencies.
INSIDE THE BELTWAY
“At FMI, we’ve always known the food industry is crucial to America’s success as a country, but it took a nationwide emergency to amplify that fact for all the world to see.” iStock
We will ensure our supply chain remains resilient, nimble and effective.
Federal, State and Local Government
Our Speaks research reveals – not surprisingly – that retailers have mixed views regarding government efforts to help businesses navigate the array of pandemic challenges. FMI worked hard to make sure the food industry was included as part of the nation’s essential workforce, and that industry and customer needs were on the radar of a wide array of different government entities at the federal, state and local levels.
This 2020 sentiment of frustration with difficult-to-implement government regulations is not completely unexpected. Historically, government regulations at all levels have been identified as having a negative impact on food retailers’ businesses in past Speaks surveys.
One challenge cited by retailers was the conflicting and constantly changing nature of guidance from different government levels and agencies. Notably, members identified inconsistent policies on mask usage as a top concern, and they said regulations from the federal, state and local governments were extremely difficult to follow. With 170 different COVID guidance documents just from the Centers for Disease Control (CDC) and thousands more across the U.S., I would have to agree. FMI has developed an online portal and a multipage spreadsheet just to track all of this government guidance.
However, in 2019, the negative perspectives were somewhat reduced. In a tale of two worlds some burdensome federal regulations were pulled back as were those in municipalities with business-friendly leadership, but the opposite was true in other areas, particularly state governments. While nearly a third of food retailers reported that federal and local government regulations had negative repercussions, an even greater number (nearly half) believed state government regulations were particularly challenging, stemming in large part from labor and sustainability issues – particularly those involving restrictions on plastic bags or polystyrene packaging. But just as many retailers – if not more – said in 2019 that regulations from different levels of government were under control and were not having negative impacts. Clearly, these respondents were not in California.
Payments National crisis aside, let’s talk about one of the biggest, continued threats to the profitability of retailers’ businesses: interchange fees. Nearly 81 percent of Speaks survey respondents highlighted credit/debit interchange fees as the most adverse effect on their bottom lines, a trend that is likely to only increase as more transactions are initiated online. FMI has continued to seek fixes to this anti-competitive fee system through federal and state legislation and with ongoing discussions at the Federal Reserve and the Federal Trade Commission. Credit/debit interchange fees averaged 1 percent of total sales in 2019 and represented as much as the average profit for most companies. The future of payments is changing, influenced by e-commerce and mobile, but don’t discount the in-store experience and how it is becoming more reflective of the convenience-minded shopper. Speaks suggests that mobile payments are up nearly 50 percent since a year ago, and 87 percent of stores now accept mobile payments.
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INSIDE THE BELTWAY
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highlighted among about half of survey respondents. On average, food retailers spent $314 per employees for training and skills development in 2019, but a majority (55 percent) expect that amount will increase in 2020.
Benefits It’s often noted that we are only as good as the people we employ, and benefits continue to be a key differentiator for employers. iStock
“Retailers enacted strategies during the pandemic to keep customers and front-line associates safe.” Taxes With tax reform and rate reductions in both the corporate and passthrough rates in effect for more than two years, Speaks asked if food retailers had made, or are planning to make, any changes in how they invest in their businesses. Just over one-half of responding retailers said they have or are likely to make at least one of these investment types as a result of tax reform. Many food retailers pointed to investments in employees and store development, they either made or plan to make, as being possible due to lower tax rates, a policy that new Democratic leadership wants to change.
Workforce So, let’s look at these employee investments. Retailers enacted strategies during the pandemic to keep customers and frontline associates safe. Additional employee costs due to COVID policies and personal protective equipment, or PPE, were and continue to be significant.
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Retailers also focused on a range of benefits for associates including higher compensation, bonuses, flextime, training/skills development, employee wellness programs, education programs and hiring/retention incentives. Speaks evaluated the food retail labor market in the context of 2019’s robust economy. The low unemployment levels (about 3.5 percent) made the ability to recruit and retain employees a challenge for most food retailers, with turnover at 40 percent, improving five percentage points from 2018. How different these numbers will be for 2020. These improvements in turnover were a result of significant investment among employers. The most common investment made possible by lower tax rates was to offer higher compensation either through higher wages or bonuses. In fact, 93 percent of retailers offered higher compensation in one of these two ways. However, food retailers were also turning to other incentives. In addition to 65 percent of retailers offering training and skills development, education programs, flextime and employee wellness programs were
Most of our retail members offer a 401k, with 74 percent offering a 401k with an employer match. In 2019, health care costs continued to represent a significant expense, at 1.9 percent of sales. That has a major impact on the bottom line for an industry that averages only 1 percent profit. On average, 58 percent of employees were eligible for health care benefits in 2019.
Conclusion Speaks illustrates how food retailers did whatever it took to serve and feed the nation during this unprecedented time. We look to continue this commitment, and to build on the goodwill we established with all levels of government and our customers throughout the pandemic. Food safety, health and wellness, worker safety, customer safety – these have always been at the top of food retailers’ list of priorities, but COVID-19 suddenly elevated them to centerstage. ■
In a time of social distance, get connected by advertising with CGA. Show your support for our hard-working industry today.
For more information, contact Maria Tillman at (916) 228-4436 mtillman@cagrocers.com
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WELCOME
HEE-SOOK NELSON as the 2020 – 2021 CGA Chair of the Board
THANK YOU
PHIL MILLER for your dedication & service this past year
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WASHINGTON REPORT
Entering the Biden Era
G R EG F ER R A R A PR E S IDE N T AN D CEO N AT ION AL GR OCER S AS S OCIATIO N
What can independent grocers expect from a Biden Administration and 117th Congress? This year’s presidential and congressional election was among the biggest in our nation’s history, with record voter turnout.
Biden has indicated support for a method similar to the California ABC test to be implemented on a national level.
Regardless of the leaders or parties in power, the goal of the National Grocers Association remains the same: to work with our nation’s leaders on policies and programs that help independent supermarket operators grow and better serve their communities.
We’d also expect Democrats to pursue higher taxes and a federal hourly minimum wage of $15, matching the rate already enacted by many localities. As outlined on the campaign trail, Mr. Biden will likely seek to boost the corporate tax rate to 28 percent, phase out small business deductions and increase the amount of businesses being hit by the estate tax.
As of press time, former Vice President Joe Biden has been declared the winner in the presidential race, with Democrats in control of the House despite losing a few seats. Two key U.S. Senate runoff races are still up in the air to determine which party will control the Senate. Assuming we find ourselves in an all too well-known scenario of divided government, in which Republicans maintain a majority in the Senate and with Democrats at the helm in the House and the White House, what can independent grocers expect from a Biden Administration and 117th Congress? A reversal of many Trump-era regulations, for one. Specifically, keep a close eye out for changes in labor and workplace regulations.
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Another key point is health insurance. Expect an effort to restore Obamacare mandates and demand stricter employer requirements. Although the policies listed above present challenges to independent grocers, a Biden administration would likely be more responsive to expanding federal nutrition programs, such as the Gus Schumacher Nutrition Incentive Programs – that incentivizes SNAP customers to purchase healthy produce. The 117th Congress, alongside the Biden administration could also usher in a new era of vigorous antitrust enforcement. Depending on who is nominated to lead enforcement agencies, federal lawmakers
may turn an eye to the Robinson-Patman Act (RPA), meant to protect small businesses from discriminatory terms of trade but no longer enforced. While a divided government can be testing and often lead to stalemate, I believe there will be some opportunities to advance policies that are advantageous for independent grocers. For example, one area is the expansion the Supplemental Nutrition Assistance Program (SNAP) Online Purchasing Pilot. USDA Food and Nutrition Service (FNS) has already made great strides this year to increase capacity in the SNAP Online Purchasing program and these efforts have bipartisan support within Congress. NGA has been serving as a critical partner in helping independent grocers maneuver the application process, while also actively lobbying Congress to create a level playing field for independent grocers in this important program. On behalf of the staff here at NGA, we look forward to working with all the winners of this historic election toward our common goal of creating a stronger America. Leading the charge toward that goal are independent grocers, whose investments in their communities create jobs, generate tax revenues and provide essential goods to generations of individuals. ■
Congratulations HEE-SOOK NELSON
2020 – 2021 CGA Chair of the Board
Thank You PHIL MILLER
for your leadership this past year
And
Congratulations DAVE HEYLEN of CGA on your retirement! Thank you for over 30 years of dedicated service!
3 Ways GROCERS SHOULD invest their RESOURCES
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By Joanne Heyob SVP, Operations, Strategy & Design, WD Partners WHERE SHOULD YOU INVEST IN 2021? THE FUTURE WILL REQUIRE NEW STRATEGIES FOR CONSUMER LOYALTY, THE DEVELOPMENT OF NEW FULFILLMENT METHODS, AND A PORTFOLIO STRATEGY. There is no question that this year has changed everything, and the grocery industry is no exception. It was already on its way to innovation as the adoption of ecommerce opened the door to more convenient purchasing options. But now we have seen a shift that has pushed many consumers out of stores altogether. We know how the grocery industry looked pre-COVID, and we have come to see how it transformed throughout 2020. But what about the future? Where should these retailers invest their resources to succeed in 2021? It’s not as simple as requiring associates to wear PPE in-store; we feel that considering changes in consumer loyalty, fulfillment methods, and a portfolio strategy is essential preparation for what’s to come. CONSUMER’S WAVERING LOYALTY In times that are so uncertain, one may venture to assume that consumers would stick with the brands they know and love. But in reality, things are much different. Research has shown that consumer loyalty amidst the pandemic has been profoundly unstable. People aren’t as interested in brands that they used in the past and are now more apt to seek out providers that fulfill their needs in terms of convenience, availability of products, and services offered. In fact, since the start of the crisis, 77 percent of consumers in the United States have tried unfamiliar shopping behaviors like new channels, stores, and brands.1 With the grocery industry in the middle of an extensive and ongoing structural change, grocers need to find ways to keep (or bring) these consumers on their side and make it worth their while.
The popularity surrounding options like BOPIS and grocery delivery services has only been increasing over the past few years, but COVID has truly pushed these services into the spotlight with the demand for online grocery booming. And for good reason; as of mid-September, 64 percent of consumers reported that they have not resumed “normal” activities outside of their homes. Grocers offering these services and executing them well is now a huge factor in getting consumers to choose your brand over the next. In terms of fulfilling their other needs, consumers who are choosing to go out and about want to trust that they are safe doing so. Ensuring that you offer a frictionless, safe, and sanitized experience that addresses customer pain points is one step; you also need to offer something that your competitors don’t. McKinsey recommends incorporating a paid loyalty program. These programs drive higher purchase frequency, purchase amounts, and brand affinity. But there are also other methods to consider when it comes to creating a desirable shopping experience. MANAGING FULFILLMENT METHODS As third-party shoppers and store pickers are occupying a majority of the store floor, consumers are now left to compete for products, making for a less than desirable brand experience. Even though grocers had already begun adopting the practice of creating fulfillment centers directly in their physical stores before the pandemic, we feel that it is important to consider this option now more than ever.
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1
mckinsey.com/business-functions/marketing-and-sales/our-insights/survey-us-consumersentiment-during-the-coronavirus-crisis
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With over half (54 percent) of consumers opting for grocery pickup and grocery ecommerce doubling in some cases,2 adding these micro fulfillment centers (MFCs) can make in-store picking more efficient, improving the shopping experience for store associates and consumers alike. With MFCs also comes automation. Prior to COVID, autonomous grocery delivery was a future-forward concept that most consumers thought of as a novelty rather than a necessity. Now, customers and grocery providers welcome the option with excitement as increases employee efficiency and convenience. It has benefitted tech start-ups as well. Starship Technologies, Nuro, Refraction AI, and Duece Drone have all created partnerships with major brands like Walmart and CVS to provide automated delivery services in certain areas around the U.S.. And automation doesn’t just apply to deliveries. Stores are also beginning to implement automated pickup kiosks, both in-store and at standalone locations. Regardless of which system of fulfillment retailers choose to adopt, they will need to continue honing them for the new world. In this new world not every store needs to incorporate an MFC, but they may just need to take a look at their portfolio strategy.
“THOUGH IT IS HARD FOR ANYONE TO SAY WHAT IS GOING TO HAPPEN IN THE FUTURE, WE DO KNOW THAT RETAILERS NEED TO TAKE THIS TIME TO IDENTIFY SOLUTIONS TO GET THEM THROUGH THE SHORT-TERM WHILE SETTING THEM UP FOR LONG-TERM SUCCESS.” REEVALUATING PORTFOLIO STRATEGY
2. Create a plan to lean into your strengths or to pivot in a new direction
When attempting to navigate this new industry landscape, there is no better time to learn how to leverage current and new real estate. Getting down to the art and science of your brand is now essential as stereotypical grocery is now a thing of the past.
3. Design a solution that suits both the needs of your brand and the needs of the consumer
Online ordering has accelerated, and consumer sentiment has projected that this behavior will continue. The great thing about this shift is grocers now have the opportunity to experiment like never before to see how consumers will respond to new shopping methods like small format smart stores (looking at you, Amazon GO) and dark stores. As we discussed before, MFCs may be incorporated, as a new addition in terms of ecommerce fulfillment, so long as there is a strategic growth plan outlined for a particular area where market share needs to grow. Experiential showrooms could also be a good addition, allowing shoppers to escape reality and learn about new products in an unfamiliar setting. Overall, WD Partners believes this method3 is perfect for reevaluating your strategy for today, tomorrow, and beyond: 1. Uncover the possibilities for your brand and conceptualize your path forward
4. Scale your innovation by showing up in a meaningful way and evolving to meet your consumer’s needs TOMORROW’S VISION Though it is hard for anyone to say what is going to happen in the future, we do know that retailers need to take this time to identify solutions to get them through the short-term while setting them up for long-term success. Grocers need to ensure that they are adapting swiftly, implementing new fulfillment strategies, and are not afraid to fail fast in this complex business environment. ■ Editor’s Note: At WD Partners we’ve been helping brands create consumer centric experiences that are grounded in sound operational practices and have the ability to be scaled across the country for the last 50 years. It was a pleasure presenting at CGA Strategic Conference 2020. If you’d like to discuss the topics shared in this article we’d love to connect. Please reach out to the author, Joanne Heyob, at joanne.heyob@wdpartners.com.
2
grocerydive.com/news/grocery-pickup-is-here-to-stay-heres-how-its-evolving/587702/?utm_source=Sailthru&utm_medium=email&utm_ campaign=Issue:%202020-10-27%20Grocery%20Dive%20%5Bissue:30484%5D&utm_term=Grocery%20Dive
3
wdpartners.com/pov/21st-century-grocery
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CONGRATULATIONS HEE-SOOK NELSON 2020 – 2021 CGA Chair of the Board
THANK YOU PHIL MILLER for your leadership this past year
From your friends at
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THE INSTACART EFFECT By Dan Frommer
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If Amazon is trying to build the iPhone of the grocery industry, Instacart is the Android. One of the big consumer shifts during the COVID-19 pandemic has been the rise of online grocery shopping, which, almost overnight, transformed from nifty convenience to essential infrastructure for millions of Americans. And one of the big winners from this shift has been Instacart, the San Francisco-based online grocery technology and delivery provider.
big chains like Kroger and Costco. With a network of more than 500,000 shoppers, Instacart now delivers from nearly 40,000 stores, and is now accessible to more than 85 percent of U.S. households (and 70 percent of Canadian households).
To make a loose analogy to the smartphone business: While Amazon is building the iPhone of online grocery shopping – a tightly integrated experience with Prime, Prime Now, Subscribe & Save, Whole Foods, Amazon Fresh, etc. – and Walmart is building, um, the Windows Phone, Instacart is building the Android: A platform that any grocer can use to sell online for home delivery or in-store pickup. And it’s getting big. Just as Android now runs on devices from hundreds of manufacturers around the world, Instacart has spent the past few years signing up hundreds of grocers. The company says it’s now working with more than 500 retailers, from small local grocers like Bi-Rite in San Francisco to
• The consumer that wants to shop for groceries online. • The grocery store that needs a platform to power e-commerce and delivery. • And the consumer-goods brands whose products are being bought and sold.
E-commerce is now estimated to represent around 10 percent of the roughly $1 trillion U.S. grocery market this year, according to market research from the technology firm Mercatus. That’s up from about 3 percent of the market last year, and more than double its previous forecast for this year, which was 4 percent. The firm now projects that e-commerce will double again to represent more than 21 percent of the market by 2025. Amazon and Walmart have been aggressively building out their online grocery businesses, and racing to outdo each other with faster shipping speeds, eager to steal share from incumbents and each other. But right now, most Americans still buy most of their groceries from the grocery store. And that is where Instacart comes into play.
What’s interesting about Instacart is that it is a potentially useful platform for multiple parties:
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“With a network of more than 500,000 shoppers, Instacart now delivers from nearly 40,000 stores, and is now accessible to more than 85 percent of U.S. households.” Instacart doesn’t say how many users it has, and, as a privately held company, does not report its financial results. But it has been able to raise financing this year at increasing valuations, including a $200 million round that it announced in October, with a valuation approaching $18 billion.
The consumer proposition is pretty straightforward: Instacart’s software can provide a familiar interface for online shopping at a variety of local and national retailers. Over time, Instacart should be able to increasingly personalize the shopping experience for each customer based on their purchase history, stated preferences, and other signals, something stores can’t really do. It could offer “playlists” of products, organized around recipes, events, and even individual curators. For retailers, Instacart turns on e-commerce and delivery without having to build the platform. This is, it turns out, useful for almost every grocery store, all of which now have to fend off Amazon and Walmart on multiple fronts. The immediate result is that online shoppers, while perhaps shopping in-store less often, tend to spend more money, with larger online basket sizes than in-store. This year, as shopping habits have changed during the pandemic, Instacart says it has seen average basket size grow by as much as 35 percent. Some larger chains should eventually have the technological expertise and unique needs to build parts or all of this on their own. And you have to assume that over the span of decades, this will all change substantially. Recently, the lines have blurred between grocery and food delivery, for example. But for now, Instacart is the top choice for many grocers. Continued on page 42 ▶
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◀ Continued from page 41
Fresh Market, were up almost 80 percent, while shipments to Wegmans were up 55 percent, compared to the prior 12 weeks before it started advertising. “They build awareness because we show up at the top of certain searches,” Cayne says, “but also they’re putting us in their carts, so sales are jumping.”
For consumer and food brands, Instacart offers a marketing platform – and a rare trove of data. The company already offers advertising tools, including featured promotion in search results, coupons, delivery promotions, and ads on the site.
“For consumer and food brands, Instacart offers a marketing platform – and a rare trove of data.”
As the pandemic continues to affect shopping behavior and how consumers discover brands and products, digital advertising figures to fit into more brands’ marketing and promotional plans. Haven’s Kitchen founder Alison Cayne, for example, started experimenting with Instacart ads to increase visibility and demand for her line of fresh sauces, as her distribution grew rapidly but in-store tasting events were off the table. “We’re new on all of these shelves around the country” Cayne says, “and when COVID happened, we knew fewer people would be in the actual stores. And when they did go shopping, they weren’t toodling around, browsing for new, fun things – it’s in and out and get home.” Since launching Instacart ads in August, Cayne says average weekly shipments from her distributor into one grocery chain, The
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Longer term, I imagine, it will be tempting for Instacart to start doing more itself, too, from its own private labels or exclusive products to warehouse stores or fulfillment centers. Instacart maintains that it’s focused on partnering with and delivering from existing grocery stores. But one of the things I’m most interested in, as a lover and frequent patron of grocery stores large and small, is how online commerce broadly drives evolution in the physical store experience, especially once coronavirus restrictions eventually lift and new habits are solidified.
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Instacart is very excited about these programs, as they are very close to the purchasing funnel, and can be targeted and tracked.
Amazon wants to take – and will be able to take. But the grocery industry is huge, and won’t quickly collapse.
Instacart also should be able to offer brands much more data about how their products are performing organically than they’re getting now – because it has a much wider range of visibility and, theoretically, better reporting capabilities. What are people buying? With what other products? When? Are those Facebook ads working? As the layer between the consumer and retailer, Instacart is increasingly in the powerful position to track and report that information. (In aggregate, over time, Instacart could do so much more with that information, too. It could tell stores what products to sell to attract new shoppers and increase sales, help merchants and consumers discover new brands and items, and help emerging brands get distributed more effectively.) So, at least for the next several years, Instacart appears to be a fascinating player in the shift to online grocery shopping. The big question marks are around how much share
If you are getting pantry staples delivered monthly on subscription, and fresh foods weekly or so via delivery, how does the grocery store change? Does it become a place where you spend more time on discovery, via sampling and other displays? Does it include restaurants, like an Eataly? (Or just a lot more prepared foods?) Does it devote more space to community and events? Or coworking spaces? Or health clinics? Or growing hyper-local produce on site? Is it just smaller? I’m eager to find out. ■ Editor’s Note: Dan Frommer is the founder and editor in chief of The New Consumer (newconsumer.com), a publication about how and why people spend their time and money. Follow him on Twitter at @fromedome.
Congratulations HEE-SOOK NELSON 2020 – 2021 CGA Chair of the Board
Thank You PHIL MILLER for your leadership this past year
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California Food Prices and the Outlook
for 2021
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BY RICHARD J. VOLPE Associate Professor, Agribusiness Department, Cal Poly San Luis Obispo THE COVID-19 PANDEMIC HAS BEEN A SHOCK TO THE FOOD SUPPLY CHAIN WITHOUT ANY MEANINGFUL PRECEDENT.
In economic terms, a shock is an unpredicted effect on a market. Shocks come in many shapes and sizes. They can affect supply factors, demand factors, or both. What nearly all shocks have in common is that they drive price changes. The COVID-19 pandemic has been a shock to the food supply chain without any meaningful precedent. The U.S. endured widespread pandemics in 1918 – 1920 and in 1957 – 1958, but the driving forces of technological change, consumer preferences and corporate strategy have created a modern food supply chain that bears little resemblance to those that faced previous pandemics. COVID-19 has caused grocery prices to increase significantly. Perhaps the best tool for measuring food price changes in aggregate is the Consumer Price Index (CPI). According to the national food-at-home CPI, grocery prices ticked up only 0.4 percent in 2018 and another 0.9 percent in 2019.
But the USDA Food Price Outlook predicts an increase ranging from 2.5 to 3.5 percent for 2020 and another 1 to 2 percent increase in 2021. This has led to many questions, being posed and answered (to an extent) throughout the popular press and trade publications, on the specific impact of COVID-19 on food prices and the outlook for 2021. The prices in grocery stores reflect factors all throughout the food supply chain, and most of these have been affected in some way by COVID-19. It is useful to start with the production sector. California is by far the most important state agriculturally and many growers throughout the state sell predominantly to either the grocery or the foodservice sectors. COVID-19 effectively shut down foodservice in the blink of an eye. Those producers selling mostly to foodservice buyers, including restaurants and sports and entertainment venues, were left without outlets for highly perishable commodities. Continued on page 46 ▶
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“GROCERS WERE FORCED TO SCALE BACK OR ELIMINATE ENTIRELY MANY OF THEIR HIGHER-MARGIN OFFERINGS, INCLUDING SALAD BARS, BULK FOODS, PREPARED AND READY-TO-EAT FOODS, AND MORE.”
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◀ Continued from page 45
Regulations, trucking shortages, and issues with packaging or product sizes all combined to make the short-term transition to the grocery channel difficult. This phenomenon led to the widespread disposal of food and beverage commodities throughout California, some of which made headlines in popular press. Those commodities that did make it to the grocery sector featured significant price premiums, as growers needed to overcome lost foodservice revenues as well as additional costs associated adapting their operations to COVID-19. The transportation and food manufacturing sectors bridge the gap between production and retail. The full impact of COVID-19 on the trucking industry continues to be complex. However, based on data from the USDA Agricultural Marketing Service, average refrigerate truck rates have been consistently at or near five-year highs throughout the pandemic (particularly since May), while truck availability has been at or near 5-year lows during the same time.
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This means trucks have been harder to find and costlier for firms in the food supply chain, accelerating food price inflation. Manufacturers throughout agribusiness, but particularly for meat, have had to adapt their practices considerably due to COVID-19. This has resulted in significantly higher labor costs, lost and destroyed products, temporary closures, and, in some cases, investments in new capital and equipment to operate during this challenging time. Retailers have been faced with higher wholesale food costs throughout the pandemic, as these factors have rippled throughout the supply chain. Moreover, the grocery sector is truck-intensive, meaning retailers are also incurring higher transportation costs as well. Retailers have faced a number of additional expenditures to adapt their operations to COVID-19, including plexiglass barriers, stickers and markers, signs, masks and gloves, and more. Turnover, which is associated with training and onboarding costs as well as lost productivity, spiked in grocery more intensely in California than
in many states. Finally, grocers were forced to scale back or eliminate entirely many of their higher-margin offerings, including salad bars, bulk foods, prepared and readyto-eat foods, and more. All of these factors, affecting an industry with low operating margins, drove retail food prices up at a much faster pace than normal throughout the pandemic. National food prices have made plenty of headlines since COVID-19 began to affect the food supply chain. However, the Bureau of Labor Statistics publishes a Food-atHome CPI for the western U.S., which gives a clearer picture of the changes in grocery prices in California. Figure 1 shows monthly percent changes in the western U.S. grocery CPI from 2010 to the time of writing. April 2020, the first month that was fully affected by COVID-19 in the U.S., saw the biggest monthly increase in grocery prices since 1991, at 2.6 percent. Since that time, grocery prices have been volatile, but they have not seen sustained decreases, and therefore have remained considerably higher than average.
Monthly Percent Changes in the Food-At-Home CPI for the Western U.S. 2010–Present
“APRIL 2020, THE FIRST MONTH THAT WAS FULLY AFFECTED BY COVID-19 IN THE U.S., SAW THE BIGGEST MONTHLY INCREASE IN GROCERY PRICES SINCE 1991.”
Figure 1
In fact, in August 2020, grocery prices in the western U.S. were 5.8 percent higher than they were in August 2019, the highest 12-month percentage difference since 2011. Selected CPI numbers are available for specific food categories in the western U.S., and these indicate that food price inflation has varied quite a bit throughout the supermarket. As of September 2020 (the most recent month available), prices for cereals and bakery products were up only 0.8 percent year over year. Meanwhile, prices for meats, fish, and eggs are up 7.4 percent while dairy prices are up 7.3 percent, year over year. As noted above, grocery price inflation is expected to abate in 2021 nationally, relative to 2020. Most of the capital expenditures required due to COVID-19 have already been made, and future expenses related to upkeep and replacement should be small compared to those incurred in the early months of the pandemic. Farm prices decreased in June and have been fairly stable since then, relieving some of the most important inflationary pressure on
grocery prices. In recent months, refrigerated truck availability throughout the west has been stable, with few shortages reported by USDA. For some food spending categories, such as fruits and vegetables, inflation may be lower than the national average in California simply due to lower transportation and storage costs.
Editor’s Note: Dr. Richard Volpe is an Assistant Professor at Dal Poly – San Luis Obispo and teaches courses on food retail and supply chain management, transportation and logistics, and data analysis. He also works closely with CGA to facilitate collaboration on public-private partnerships, student internships and scholarships.
Grocery prices in the western U.S. have increased by an average of 1.9 percent each year since 2000. Over that same time, the All-Items CPI for the west increased by an average of 2.3 percent each year. This means that, despite the ongoing march of inflation and the regular proclamations of record high food prices seen in news stories, food is cheaper for Californians today than it was 20 years ago, in real terms. Despite the diverse and significant impacts of COVID-19 on grocery stores and the entire food supply chain, there is no reason to believe that food price inflation in 2021 will exceed the average of recent history, and may well end up below average. ■
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SHOPPER TRENDS YOU NEED TO KNOW
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BY ETHAN CHERNOFSKY VP of Marketing, Placer.AI
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THE PANDEMIC ALTERED THE GROCERY LANDSCAPE CREATING NEW WINNERS IN THE CALIFORNIA MARKET. Across the country, the grocery sector has been upended by a fundamental shift in the way supermarket shopping is done. Much of this has centered around three key shopping trends. The first is mission-driven shopping where visitors look to accomplish as much as possible in as few visits as possible. This had led to decreases in visits-per-visitor metrics, but growth in elements like visit duration and basket size. The second is the ongoing pursuit of value in a period of economic uncertainty. More visitors are looking to find deals as opposed to focusing solely on finding ideal items. Finally, we have seen a shift to suburban shopping and away from city locations as business travel, university studies and a general exodus from cities has limited traffic. These trends have given an edge to traditional grocery brands like Albertsons, Kroger, and Publix. All three grocers offer a wide selection, allowing consumers to find their full grocery list in one place. They also tend to be oriented towards value while possessing a large distribution of stores near major residential areas in the suburbs.
The California Market Looking at visit trends – from the onset of the pandemic in early March through the recovery into October – shows how these same patterns are impacting the
California market. Trader Joe’s and Whole Foods struggled more than most in the early months of the pandemic, with visits dropping nearly 50 percent year-over-year in April.
“Even when the pandemic ends, the period of economic uncertainty it caused is likely to last for far longer, giving an ongoing privilege to traditional, one-stop-shop grocers.” Whole Foods, not known for being a “value” retailer, is heavily oriented towards cities, and sees less visits per visitor. This last metric is a very effective means of understanding whether a grocer is seen as the core of a grocery trip, or as part of the puzzle. So while Trader Joe’s is not known for providing huge “value” in the classic sense, customer loyalty served as a powerful engine driving visits back towards normalcy. In comparison, traditional grocers like Albertsons and Ralphs not only saw visit rates perform better than the competition but actually gained visit share against key state-level competitors. Albertsons saw its visit share grow from 14.69 percent in October 2019 to 16.04 percent in October 2020. This shows a very powerful surge that could have significant staying power.
While hope abounds that the reign of COVID-19 could come to an end in early 2021 with a vaccine, some of the related trends may continue. Even when the pandemic ends, the period of economic uncertainty it caused is likely to last for far longer, giving an ongoing privilege to traditional, one-stop-shop grocers. Additionally, there is significant conversation around the potential that more people will look to spend time working from home and leaving behind the costs and challenges associated with city life. If so, these suburban retail powers could show strength into the coming years. On a more hopeful note, the wider trend of economic uncertainty could lift all grocery players as more people lean on home-cooked meals as opposed to more-costly dinners out. Whatever the situation, the key will center around the ability of these brands to strengthen their customer relationship with consumers in the coming years. ■ Editor’s Note: Placer.AI’s “Grocery Deep Dive” whitepaper can be found here: trends.placer.ai/grocery-deep-dive-0
Congratulations Hee-Sook Nelson incoming Chair of the California Grocers Association
Congratulations! Hee-Sook Nelson From your friends at
Gelson’s Markets
from your friends at GE is a trademark of General Electric Company. Used under trademark license.
Congratulations
Congratulations
Hee-Sook Nelson 2020-2021 CGA Chair
From your friends at Daniels Meat “MEATing Your Every Need”
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CONGRATULATIONS
Hee - Sook Nelson VICE PRESIDENTOF TEAM DEVELOPMENT AND PUBLIC AFFAIRS FOR GELSON’S MARKETS
ON BECOMING THE 2020–2021 CHAIR OF THE CGA BOARD OF DIRECTORS From your friends at
Reset
THE ENTERPRISE RISK PROTECTION
BY M I K E B OW ER S N OR THGATE GON Z ALEZ M ARKETS
THE KEEP CA SAFE INITIATIVE WAS THE INDUSTRY’S BEST CHANCE TO FIX THEFT ISSUES PLAGUING OUR STORES. BUT AFTER PROP. 20’S FAILURE, IT’S TIME TO GET BACK TO BASICS. Proposition 20 was squarely defeated by California voters. Its demise probably seems like a crushing blow to the hopes of people who knew the intentions of Prop. 20 and supported it. But, herein lies the rub; many people simply did not understand the intent of the proposition. Prop. 20 sought to give the California criminal justice system some basis for holding serial offenders and those committing improperly classified violent crimes accountable for the damage they cause society. It sought to create a safer environment for our employees and customers, free of the intimidation caused by deranged shoplifters threatening violence. It also sought to give Californians hope that service-resistant addicts, powerless to get healthy on their own, just might get help through the courts again. And, having fewer used needles on the ground for our children to step on would not be such a bad thing, either. Now I turn my thoughts to what grocers should be doing at a time like this. Instead of further lamenting the outcome, we need to pick ourselves up and focus on what we can do to make a difference.
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First, and perhaps most important, we need to resume reporting every crime to local police departments. Opponents of Prop. 20 pointed to the fact that many reported misdemeanors have decreased since Prop. 47 was adopted in 2014. As insiders well know, businesses and the public at large have all but stopped reporting non-violent crimes of many types.
on the record. This might mean that we input a case report over the internet, or through the phone, or some other way that does not involve a police response. Our internal case reporting systems are not going to cut it; public records come from police reports and that is where both lawmakers and investigative reporters find facts. If you want change, report every crime, period. Finishing where I started, many of the “no” votes were likely cast without a real understanding of Prop. 20. Let’s recognize the opportunity to communicate with dissenting voters who probably want the same things we do.
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Even law enforcement agents have discouraged the practice of reporting crimes with the attitude of “what good will it do?” If we hope to make a case for change, we need to break out of that mentality and insist that every crime goes
Talk with your customers and your lawmakers. When you speak in public, take the opportunity to outline the problems we are facing. Keep communicating and we will get there! ■ Editor’s Note: Mike Bowers is Vice President, Enterprise Protection, for Northgate Gonzalez Markets, based in Anaheim, Calif., and Chair of the CGA Enterprise Risk Protection Committee.
Cо a la оs
Thank Y
Hee-Sook Nelson Gelson’s Markets Incoming CGA Chair
Phil Miller C&S Wholesale Grocers Outgoing CGA Chair
1020 N. Lake Street Burbank, CA. 91502 818.817.6712 www.retailsolutionsus.com
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Taste the Legacy
Congratulations, Hee-Sook!
100% estate grown organically farmed since 2000 family-owned-and-operated
MIGRATION
AND THE
IMPACT ON
STORE FORMATS
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BY LEN LEWIS
The suburbs are booming again. Americans are driving less. What does this mean for the future of grocery store formats and in-store operations?
The history of the human race – and retailing – is inexorably tied to trends in migration – people avoiding persecution, seeking jobs and a better life on the proverbial city streets paved with gold or in the relative safety of the suburbs. But this scenario has rarely been more unstable. The COVID-19 pandemic has been the reason for a retail apocalypse – a flashpoint for change and exacerbated by a downward economic spiral that could rob consumers of their peak earning years and spending power. At the same time, online shopping in every retail category has soared to new heights. The question is whether this is a
temporary aberration or a lasting trend that will send retailers scrambling for new store formats, consumer services and operational strategies get economic and pandemic-weary customers back in stores. By and large the future of retailing doesn’t hinge on finding new store formats or even a coronavirus cure. The damage has already been done. Shutdowns triggered double-digit employment in every demographic group. Those jobs may never return or may become part of a growing gig economy where job security is a myth and the idea of collecting a pension after 30 years with one company has gone the way of the Dodo.
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◀ Continued from page 57
This is particularly problematic for Millennials, a group representing 73 million people and a microcosm of retailing’s future. They have already come through two recessions in their lifetime and now a pandemic threatens to deplete their savings. They are suffering from economic burnout and a series of restarts.
fled the pandemic. However, many people, particularly those in higher paying tech jobs, are now working remotely and may not be inclined to return any time soon.
Chains and independents must focus on a complete digital transformation and gather more data that can translate into actionable results. This includes improved digital storefronts that enable consumers to view multiple brands in an e-mall format. This strategy, part of what some observers call the fourth industrial revolution, may require grocers to team up with a third-party ecommerce platform.
In fact, the Pew Research Center has estimated that 15 percent of Millennials are now living with their parents compared with 8 percent of baby boomers when they were the same age. This is creating what some observers call a “burb boom.” But migration and its potential impact on retailing must be viewed through a larger lens to see where people are going. Overall, Census information reveals that about 14 percent of the population moves every year for a variety of reasons. In 2019, California, Illinois and New Jersey were the top three for outbound moves. Interestingly, we are also seeing a push-pull in places like Los Angeles, which had the highest number of people moving out and moving in. San Francisco is not in as good a place with a population decline responsible for a 29 percent drop in the city’s sales tax in the second quarter. Adding insult to injury, online taxes increased only one percent during the period, compared with gains in excess of 10 percent in other California cities. The jury is still out on whether and when the city’s extensive Pandemic Economic Recovery Plan will have a positive impact on business. The program would extend the Shared Spaces program for three years, enabling retailers and restaurants to use sidewalks. Over 1,600 permits have been issued to date and could be an interesting outlet for urban grocers. The plan also defers impact fees for real estate developers who put projects on the back burner when financing dried up. More building could hold down San Francisco’s exorbitant rents and bring back people who
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First, let’s admit that “dark stores” as non-consumer distribution points and BOPIS (buy-online-pickup-in-stores) are not passing fads. They were trends before the pandemic and will remain part and parcel of the retail experience.
You can find examples worldwide. One recent move was made by Robinsons and Marks & Spencer stores in Shanghai. Both have their own websites but have added storefronts on Lazada, an e-commerce platform that operates LazMall stores. iStock
“Migration and its potential impact on retailing must be viewed through a larger lens to see where people are going.” On top of all the sales tax rates impacting consumers in 51 California cities including Alameda, Contra Costa and Sonoma counties, upped the minimum statewide tax to 7.25 percent. If there’s an upside, it’s that out-of-state retailers such as those selling on Amazon, must collect sales tax, a move that legislators feel will increase sales at brick and mortar stores that were lost to online ordering. What does this all mean for future grocery formats and in-store operations everywhere?
But retailers are still faced with the issue of physical store formats – what will or won’t work and where. One concept being closely watched is Amazon Go, cashier-less supermarkets that are in the process of being expanded. Some see this as the next logical step in joining technology with grocery retailing. However, these small, unmanned stores with a very limited selection are not seen as a threat to neighborhood stores as much as a convenience store for the lunchtime crowd. These smaller urban formats still capture the industry’s attention and will continue to grow albeit at a slower pace. A declining inner city consumer base makes expansion less urgent despite the increase in commercial vacancies. And those people who remain may find smaller stores problematic from the standpoint of social distancing, opting instead for home delivery of online orders.
Insuring the health and safety of consumers and employees may require a shift in opening hours to accommodate cleaning and sterilization, more timely replenishment of essential products, rationing volume purchasing and new labor requirements to address online shopping, click-and-collect and curbside pickup, according to a recent Accenture report.
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“Future success will hinge on a seamless combination of online and physical retail.”
Clearly, anything related to digital commerce will continue growing in a post-pandemic world along with an increased need for artificial intelligence across multiple products and services. Not to minimize the importance of store formats, but future success will hinge on a seamless combination of online and physical retail. As to larger suburban stores, the general wisdom is that they will become more popular because of their ability to stock
a greater variety of items in a space that allows for social distancing. This may put grocery retailers in the catbird seat when it comes to real estate, with developers clamoring for tenants to replace anchor locations abandoned by chains like Sears and JCPenney. One thing that some observers feel might impact larger suburban stores is the recent big drop in vehicle miles traveled – 41 percent between February and April according to the Federal Highway Administration. The decline has lessened and will likely improve further as people return to their offices. But according to a study by KPMG may not get beyond 90 percent of pre-pandemic levels. For retailers this means the same number of shoppers but fewer trips. ■
CONGRATULATIONS
HEE-SOOK NELSON, CHAIR OF THE CALIFORNIA GROCERS ASSOCIATION! FROM YOUR MOLSON COORS FAMILY
CELEBRATE RESPONSIBLY® ©2020 MOLSON COORS, LLC
CAL I FO RNIA GRO CER | 59
Congratulations
Hee-Sook Nelson 2020-21 CGA Board Chair
BETTER BUSINESS • BETTER PARTNERS • BETTER WORLD
WE PROUDLY SUPPORT AND CONGRATULATE
HEE-SOOK NELSON,
ON BEING NAMED 2020-2021 CHAIR OF THE CGA BOARD OF DIRECTORS. WELL DESERVED!
WWW.FTCINSTALL.COM
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Continuously Providing the Most Customer-Focused Solutions in the Food Retailing Industry
Salutes Hee-Sook Nelson Gelson’s Markets
on your election as Chair of the CGA Board of Directors
! t e e w S
Congratulations to the new CGA Chair,
Congratulations Hee-Sook Nelson Gelson’s Markets
2020-21 Incoming CGA Chair Thank You Phil Miller
C&S Wholesale Grocers
2019-20 Outgoing CGA Chair
Hee-Sook Nelson Gelson’s Markets
CAL I FO RNIA GRO CER | 61
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THE OPPORTUNITY TO
ELEVATE BY DOUG MADENBERG PRINCIPAL, RETAIL FEEDBACK GROUP
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The pandemic has lowered shopper expectations, which means food, service and value offer a tremendous chance to stand apart from competitors. Ground floor, going up. This elevator imagery well describes the state of the in-store supermarket experience these days. In California and across the United States, the coronavirus pandemic has caused shoppers to reevaluate their priorities when venturing out to their grocery store. In our recent survey of California supermarket shoppers, respondents were clear about their lowered set of expectations. “After COVID, I’m thrilled when I can find most of what I need or want. Outstanding service means getting in and out quickly without incident,” explained a millennialgeneration shopper from Lancaster, CA. On an even more basic level, most California consumers expressed some reservation about the safety of grocery shopping. Only 34 percent feel highly confident in the safety of a supermarket, a result on par with our national research findings, both early on and later into the first wave of COVID-19. In other words, in-store grocery shoppers in general are focusing on the most basic of needs: protection from viral exposure and simply finding the items they need. When we asked California shoppers more specific questions about their own supermarket’s capabilities, the results were less than stellar. At this time when retailers are understandably focused on keeping shelves stocked and providing for the safety of employees and customers, stores received low marks for food passion and expertise, for customer engagement, and for the relative value they provide. All this presents a golden opportunity at this moment for supermarkets to delight their customers by exceeding their expectations when it comes to food, service, and value. Many retailers in the Golden State are in fact doing this, and I had the opportunity to
connect with three of them during the recent California Grocers Association Strategic Conference.
Great Food Northgate Markets knows that food provides a powerful connection within homes and families. “Customers remember those smells, those tastes” of family meals and gatherings, explains Sergio Arturo Gonzalez, Customer Experience & Vital Factor Manager of the Anaheim-based operator.
“The pandemic has lowered shopper expectations, which means food, service and value offer a tremendous chance to stand apart from competitors.” When it comes to eating around the family table, 2020 has been reminiscent of years ago when in-home food preparation and consumption were far more prevalent. During the pandemic, the company has continued its commitment to providing authentic signature offerings such as staffed guacamole stations and ceviche bars, and store-made salsas of every color and variety. These offerings draw customers into Northgate’s stores for the sensory experience that so many shoppers are missing from discount stores, supercenters, and the slew of online grocery options now available for pandemic-fueled grocery delivery and pickup.
Great Service Providing top-notch in-store service during a pandemic has proven challenging for every grocer. The primary need to maintain and project a safe, socially distanced shopping environment is at odds with the friendly interpersonal service that typically distinguishes the best in-store experiences. Winning retailers are finding ways to deliver on both the safety and service dimensions. A shining example is Encino-based Gelson’s. Using its own employee porters to clean and sanitize the stores ensures compliance with the company’s stringent standards, according to Yvonne Manganaro, Vice President of Marketing. Combined with a host of other safety protocols in place, Gelson’s is able to keep its eye on another of its company pillars: personalized service. Manganaro explains that their in-store staff, comparatively longtenured for the grocery business, have been remarkably empathetic to the needs of their customers during this stressful time, greeting them extra warmly at checkout and around the store.
Great Value With the wide-scale financial impact of COVID-19 on California and beyond, consumers are shopping for groceries with value in mind. Food retailers have been challenged with supply shortages and rising operating costs, but they are trying to keep prices in line to the extent they can. Respondents to our recent California survey described the ways their own supermarket demonstrated strong value, including targeted savings for loyalty program participants. Other shoppers appreciated universal promotions and events as well as everyday low pricing. Continued on page 64 ▶
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◀ Continued from page 63
One company that has mastered the latter approach is the FoodMaxx division of The Save Mart Companies in Modesto. Dean Willhite, Vice President of Operations at the 54-store warehouse format, describes a singular focus behind everything they do: to save their customers money with the absolute lowest prices. Food Maxx looks for opportunities to source product directly and therefore at lower cost from vendors and growers, with the capacity to store excess product high in the rafters at their stores. This capability has helped shield the chain from the severe product shortages faced at other grocery stores during the height of the
pandemic. Willhite also credits their Wall of Value for creating a strong price impression, and treasure-hunt experience, among shoppers entering a FoodMaxx store. So supermarket shoppers may have a lower, more basic set of expectations during these unprecedented times. But many retailers are pushing the right buttons when it comes to food focus, service excellence, and strong value. These grocers will emerge from the pandemic with an elevated in-store customer experience. ■
Congratulations! Welcome Hee-Sook Nelson, Gelson’s Market, as the Incoming 2020-2021 CGA Chair of the Board
©2020 Chobani, LLC
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LOOK OUT, HERE COMES HEE-SOOK!!! Nice Job CGA on your New Board Chair, What a Great Leader!
We admire and love Hee-Sook’s passion for excellence, her enthusias�c spirit, her can-do a�tude, how selflessly she gives, and above all her kindness.
It is our honor and pleasure to support Hee-Sook in this well-deserved role. CONGRATULATIONS!
Certified Federal C R E D I T U N I O N Since 1949
CAL I FO RNIA GRO CER | 65
HEE-SOOK NELSON, VP of Everything Else
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By Nate Rose Director, Digital Communications
Through her long and varied career in the grocery
industry, new CGA Board Chair Hee-Sook Nelson, Gelson’s Markets, has formed an inimitable skillset. Hee-Sook Nelson is not easy to pin down. On any given day you might find her visiting a store. Or, you might find her holed up with other Gelson’s executives designing a solution for a problem that is likely unrelated to her job title. You’re also unlikely to find another Hee-Sook Nelson anywhere in the industry. “I don’t have a normal job,” Nelson explains. “I have a very hybrid role.” Those who study technology’s impact on work believe workplace roles become increasingly specialized over time. Yet, the complexity of today’s industry challenges – e-commerce, new store formats, shifting consumer attitudes – requires new approaches. They require innovation. They require polymaths. The type of people who can synthesize ideas across various domains. “I’m kind of like the ‘VP of Everything Else,’’’ she says while explaining her position at Gelson’s. “It’s a joke at the office. If Rob (McDougall) (President & CEO, Gelson’s Markets) wants an operational project done at the office, I do it. If they want to have a team training, I develop it. I touch a lot of everything.”
Over 30-plus years in the industry, it’s a role she has grown into and come to embrace – the jack-ofall-trades type who thrives outside of traditional industry roles. “I came up through operations as the senior director of operations, so I have expertise in that area,” the Gelson’s veteran shares. “But what I do love is that I get to touch a little bit of everything, which makes my job really interesting.” The multi-faceted nature of her work, the switching gears, the adaptability, is characteristic. Nelson moved to the United States from Seoul, South Korea when she was six-years old. She arrived in Los Angeles with her family, the oldest of three daughters. Her father was an artist who would one day be the first Korean American to have his work displayed at the Los Angeles County Museum of Art along with the Austrian Embassy. “I’m an Angelino,” she says. “I attended elementary school in West Hollywood, and later moved to West Los Angeles, both were a melting pot of cultures. Which I loved.”
Continued on page 72 ▶
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We are so proud of you! Hee-Sook Nelson Gelson’s Vice President of Team Development and Public Affairs
You will make an amazing Chair of the California Grocers Association Board of Directors
! s r e Che
Congratulations
Congratulations
HEE-SOOK NELSON 2020-2021 CGA Chair of the Board
Hee-Sook Nelson
2020-2021 Chair California Grocers Association
From your Friends at Rao’s Homemade®
Congratulations to
Hee-Sook Nelson
CONGRATULATIONS
Incoming CGA Chair of the Board
HEE-SOOK NELSON 2020–2021 CGA Chair of the Board of Directors From your friends at
CAL I FO RNIA GRO CER | 69
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Congratulations Hee-Sook Nelson New CGA Chair
The Kellogg’s family of fine products congratulates Hee-Sook Nelson 2020-2021 CGA Chair
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Your friends at Papyrus and Recycled Paper Greetings wish you all the best in your new venture. We’re excited to see where your leadership and vision take us!
Congratulations Hee-Sook Nelson Gelson’s Markets
2020-2021 California Grocers Association Board of Directors Chair From Your Friends At:
Congratulations
Hee-Sook Nelson 2020-2021 CGA Board Chair
Congratulations HEE-SOOK NELSON 2020–2021 CGA Chair of the Board of Directors
CAL I FO RNIA GRO CER | 71
◀ Continued from page 67
At the University of California, Santa Barbara, Nelson studied film, sociology and history. Her two younger sisters attended UCLA; she wanted to experience college away from home. It’s hard to think of her film studies without considering her father’s artistry. “I don’t consider myself really creative, but people tell me I am,” she says. “There’s a lot of artistic talent in my family, but my talent comes out in my huge love for music. I love music. Creativity in my job comes from creating different programs. Rob (McDougall) or John (Bagan), our Chief Merchandising Officer, will give me many different projects where I have to think creatively and provide solutions. As far as creativity, it’s more thinking about how we can do things differently, our methodology.” While she eventually found an outlet for her creativity in the grocery industry, it was only much later, after college, that she definitely decided to pursue a career in the industry. “I had an epiphany one day that this industry is a career path and something I know,” she explains. “I realized I could move up the ladder. I quit my PR and financial sales job.
I decided to come to Gelson’s. (Prior to that) I had stopped working in grocery for a year. I decided when I got to Gelson’s that this was my stopping point to decide if I was going to go to law school or grad school. They wanted to promote me and I realized maybe we could make a career out of this industry like any other.” Before this tipping point, Nelson had already spent years working in the industry. In high school, she bagged and checked groceries for Vons. After college, she tried her hand at public relations and media sales by day, while holding on to her checking job at night. In a way, the grocery community nearly missed out on her. “I feel like our industry could do a better job of building that bridge from education to industry career,” she argues. “We need to find a way to build that bridge so we can attract good candidates for our industry.” “When a lot of us were coming up the ranks in our industry, we did not think that we would build a career in grocery. A lot of us were subsidizing our education.”
“There’s a sense of pride and a sense of family here…leadership cares about people, and so the culture really breeds a love for the company.”
Aside from the work, there was also the pull of Gelson’s. Nelson has worked for the Southern California grocer for 31 years and has advanced to become Vice President, Team Development and Public Affairs. She reports directly to company President and CEO Rob McDougall. “There’s a sense of pride and a sense of family here,” she says. “Leadership cares about people, and so the culture really breeds a love for the company.” One recent example comes from the company’s plan to recognize employee milestones during the pandemic. In normal times, they would host a luncheon for the honored employees. But with large gatherings being off the table, the executives split up the stores amongst the group and congratulated each employee. Large banners were hung in prominent places in the store to celebrate the anniversaries, with gifts awarded. Nelson thinks that the grocer's infectious spirit and culture and the appreciation that one feels; resonates with their employees. “When I think of executives at Gelson’s, we’re not untouchable. We don't just sit in our offices. We’re all accessible and we’re all in stores regularly…They (Gelson’s employees) don’t feel dismissed or ignored. And they matter, every one of them.” “We have an open-door policy,” she adds. “I think culture plays a big part of why employees love this company. And we are very protective of it.” In the culmination of these experiences, the Gelson’s executive finds inspiration to continue growing as a leader. Nelson is continuing her education at USC, where she is enrolled in the university’s Masters of Science Food Industry Leadership Program – a member of the program’s second cohort. Nelson is the recipient of a full scholarship after having her blind essay submission chosen by the Marshall School of Business
Thousand Oaks Strong Community Fundraiser for Thomas Fires and Borderline Bar Shooting.
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“As someone tasked with tackling public policy, team development and customer service, there is always new territory to explore. This is what Nelson loves about the industry.”
Hee-Sook, an avid LA Kings fan, with players Anze Kopitar and Alex Iafallo.
faculty for the Byron Allumbaugh Award – endowed by the industry legend, who built his career at Ralphs Grocery Company. Nelson credits her good friends Heather Deluca, Lori Brown and Elizabeth Sell of Cohort One, for pulling her over the line to embark on this educational journey. She has no regrets whatsoever, and along with Deluca, Dreyer’s, she is joined by Cindy Chikahisa, Sprouts, and Andrea Dimond, Sprouts, who are on this journey with her. They call themselves the SC Riveters (named after Rosie the Riveter). Rosie depicts strength, grit and perseverance. Their goal is to make a positive impact on women in this industry. The Gelson’s executive always wanted to attend graduate school, so attending USC is a “bucket-list item” for her. She attends online sessions each week in addition to the long and strenuous hours that have been required of all industry employees during the pandemic. She particularly enjoys the interactions shared between herself and her classmates. Ultimately, Nelson sees this new program as a way to stretch herself and better serve her company and team. This is a lesson she
learned from industry visionaries that helped propel her career forward along the way. First among many, there is Donna Tyndall, who has been a role model for women throughout Gelson’s and the industry. Additionally, there is Lillian Zacky, Cheryl Kennick and Diana Godfrey, who Hee-Sook cites as female trailblazers in the industry. She also references Kendra Doyel, Ralphs Grocery Co.; Lynn Melillo, Bristol Farms; and Renee Amen, Super A Foods, all who have served on the CGA Executive Board of Directors. Jacquie Slobom, CGA Educational Foundation Board of Trustees Chair, and Yvonne Manganaro are other women executive leaders and peers in her company who she is proud of. Then there is Bill Roulette, former Senior Vice President of Operations at Gelson’s. “He was kind of like our dad,” she says. “Bill was the one who would come up to your desk and go, ‘Hee-Sook, you’re too comfortable at this desk. This is too easy for you. Are you really not going to challenge yourself?’” After hearing Nelson speak about her academic dedication and career experimentation while bagging and
checking groceries at night, she hardly seems like the sort to need reminders to push herself. Humility, though, and work ethic are two of the industry’s most descriptive tenets. When we spoke in November, Nelson’s thoughts were on the pandemic and the holiday season ahead. “I think the workforce genuinely was guarded and fearful when the pandemic started,” she shares. “Our industry employees have been faced with a lot of challenges. Employees who had concerns regarding the pandemic themselves have really risen to the occasion and served their communities well.” Charged with maintaining Gelson’s’ highlyrated customer service, and the grocers’ team development, Nelson understands how one affects the other and the executives have made significant efforts to relieve the company’s team members of at least some of the pressure on them as essential workers. “During COVID we were serving hot lunch regularly,” she details. “We’re still doing it a couple of days a week. We’re also going to close the day after Thanksgiving to give everyone a day of rest with their families. Continued on page 74 ▶ CAL I FO RNIA GRO CER | 73
◀ Continued from page 73
“[Hee-Sook] wants to be a positive role model for other women in the grocery industry, hoping also to build more of a bridge between the food industry and education.”
During her tenure as Board Chair, she hopes to continue CGA efforts to support the industry in becoming more diverse and inclusive. She wants to be a positive role model for other women in the grocery industry, hoping also to build more of a bridge between the food industry and education. Especially through the WAFC Retail Management Program, USC Food Industry Management Program and now USC Master’s of Science in Food Industry Leadership. Her relationship with CGA is something that has continued to grow stronger during the last several months.
Hee-Sook with Lynn Melillo, Kendra Doyel and Renee Amen (left to right)
Hee-Sook with industry mentor Lillian Zacky of Zacky Farms and Gelson’s peer Jacquie Slobom.
So those are the little nuances that help our employees know we care.”
appreciated as a business. She thinks many don’t realize grocery companies require everything from accounting departments to distribution centers.
Nelson is also focused on the health and safety aspects of operating a grocery store during a global pandemic, knowing that health and safety are top checklist items for everyone in the age of COVID-19. “Cleanliness has always been one of our core pillars,” she explains. “We pride ourselves on being really clean and safe. We’re very strict normally about cleanliness, and even more so right now, because that is what makes employees and customers feel safe. Making sure that all the safety protocols are in place, the hygiene protocols, the cleanliness protocols, all those things are top of mind. Trying to do the least amount of touch scenarios. The trick is trying to give bestin-class customer service with that COVID protocol barrier.” As someone tasked with tackling public policy, team development and customer service, there is always new territory to explore. This is what Nelson loves about the industry. She believes food retail is under-
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Again, we return to the attractive quality of ideas and the benefits of being a deep generalist. “Hee-Sook is the kind of person who comes to you full of ideas,” says California Grocers Association President and CEO Ron Fong. “When she was our CGA Strategic Conference Committee Chair, she was already thinking about what she would do as Board Chair for the Conference.” This past September, she joined Eric Stille, CEO and President of Nugget Markets, to discuss company culture and servant leadership. At the beginning of December, Nelson became Chair of the CGA Board of Directors. She is the first Asian American woman to hold the position, and the second woman in the past three years.
“I think CGA proves its value more than ever during the pandemic,” she says. “How important they are in helping the industry navigate the pandemic. It is all hands on deck. Communicative. Supportive. Spot on when it comes to the issues. CGA thrives in a very difficult, changing-by-the-minute situation. Making sure that the industry is protected and heard while looking out for our best interests and common good.” As we wrap up our conversation, I learn more about Nelson’s well-rounded quality. She is an avid hockey fan (L.A. Kings). She believes dogs are underrated, and also cats. We inevitably return to food. She thinks food is an experience and loves all different types of food. What’s in her ideal grocery basket, 10 items or less? Fresh items, she shops daily. The perfect home-cooked meal? Possibly, something from her Korean heritage, Bibambap, she loves the dish’s characteristic fresh vegetables. But maybe not, she also loves Italian. ■
CGA gives me a voice in Sacramento that I otherwise wouldn’t have. Through CGA I’ve been able to lobby directly with elected officials and their staff on issues that effect my business. RICK STEWART, PRESIDENT SUSANVILLE SUPERMARKET ONE STORE – SUSANVILLE, CA
Want to learn more about the benefits to CGA membership? Contact Sunny Porter to learn more and start the conversation with your fellow industry peers at sporter@cagrocers.com or call (916) 448-3545.
cagrocers.com
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OUTSIDE THE BOX N EW RETAIL PERS PECTIV ES
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Deepest Discounts
Resale and discount shops with everything from gently-used clothing to pastdate groceries are booming due to financially strapped consumers. Some of them quarantine incoming products for 24 hours. This is no short-term proposition in retailing since estimates show that the U.S. resale market, in clothing alone, is expected to reaching $36 billion by 2024, vs. $7 billion this year.
Donut Time?
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People need doughnuts more than ever! That’s the thinking at Krispy Kreme which has opened a new flagship store in the heart of New York’s Times Square in the largely shuttered Broadway district. “We want to be part of the reemergence of New York City,” according to KK’s chief marketing director David Skena.
STRESSED
PARTY TIME
You may have missed one of the best stock market investments of the year – Tupperware. Before the pandemic the stock was trading at $1.15. Recently it was selling for $28 per share fueled by people eating at home and packing up the leftovers. Meanwhile, sales of the burpy containers are up 42 percent.
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OUT HAIR
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Sales of hair loss remedies are up 30 percent this year, according to an Ad Age report due to hair loss caused by the Coronavirus or the stress of trying to avoid the disease. The sales increase is even more dramatic among the top four online providers such as GetRoman.com, Forhims.com, Hum Nutrition and Ritual.
OUTSIDE THE BOX
sticky habits
The pandemic has changed consumer behavior drastically. But are they changed forever? A report in Bloomberg News suggested that new shopping habits like pantry inventory stocking, increased grocery buying and a pullback on discretionary goods, which benefited such brands as Procter & Gamble, Lysol producer Reckitt Benckiser and Albertsons Cos., will continue. iStock
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Automatic
Parking Imagine your customers pulling up to the front entrance, grabbing a cart and starting their shopping trip while their car parks itself. This may be closer to reality than you think. Bosch, the German auto parts maker in conjunction with Mercedes in Stuttgart is developing technology that will enable it to connect to a garage’s computers and sensors finding parking spots while customers shop. The latest test is being done in collaboration with Ford at a garage in downtown Detroit.
Anger Management The usually composed British consumer is at the end of their COVID-related rope about one thing – perfume testers. Superdrug in the UK has adopted a zero-tolerance policy because of a 21 percent increase in aggressive behavior related to the temporary ban on perfume testers. Point-of-sale communications and in-store radio will remind customers to stay calm and carry on.
FAT FEEDERS iStock
Coffee by Subscription
Kid influencers on YouTube are peddling a lot of junk food. A study by the medical journal Pediatrics found 400 videos touting brands like McDonald’s, Car’s Jr., Chuck E. Cheese and Taco Bell featuring unhealthy items like milkshakes fries and soft drinks and fast food logos.
Pret a Manger in the UK is betting that consumers will lay down about $26 per month for Pret Barista, a service offering all drink options – including organic teas, frappes, smoothies and hot chocolates – for one fixed price. The subscription can be accessed via email, phone or digital wallet, which is limited to one transaction up to five times per day. iStock
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A DVERTISER IND EX
PAGE
COMPANY
PHONE
4, 35
Albertsons, LLC
(925) 467-3000
WEBSITE
70
Alta Dena Dairy, LLC
(626) 923-3000
mary_crocker@deanfoods.com
deanfoods.com
70
American Greetings
(216) 252-7300
sara.sadaghlani@prgreetings.com
prgreetings.com
13
Bristol Farms
(310) 233-4700
bristolfarms.com
14
C&S Wholesale Grocers
(916) 373-4396
cswg.com
65, BC
Certified Federal Credit Union
(909) 261-4065
dsimpson@certifiedfed.com
certifiedfed.com
IBC
CGAEF – WHPT
(916) 448-3545
foundation@cagrocers.com
cgaef.org
64
Chobani
(212) 364-3947
chobani.com
23
Classic Refrigeration So Cal
(833)762-2524
classicsocal.com
1
Classic Wines
(800) 692-5780
broncowine.com
50
Daniel’s Western Meat Packers
(562) 948-4408
danielsmeat.com
43
Dreyer’s Grand Ice Cream
(909) 810-0612
us.nestle.com
50
Ellenos Real Greek Yogurt
(206) 535-7562
ellenos.com
69
Firestone Walker Brewing Company
(805) 591.8020
33
Flagship LMS
(800) 767-1873
denisekenney@flagshiplms.com
flagshiplms.com
60
Floor to Ceiling Installation
(714) 447-9996
info@ftcinstall.com
ftcinstall.com
71
Frito-Lay
(949) 465-7500
fritolay.com
50
GE Lighting
(651) 324-6496
ge.com
68
Gelson’s Market
(818) 906-5700
gelsons.com
55
Grgich Hills Estate
(707) 963-2784
marketing@grgich.com
grgich.com
71
Harris Spice
(714) 507-1919
info@HarrisFreeman.com
HarrisFreeman.com
23
Hill Meat Company
(541) 276-7621
hillmeat.com
60
Hussmann Corporation
(909) 548-2541
hussman.com
61
Jelly Belly Candy Co.
(707) 428-2800
70
JF Fixtures & Design, LLC
(562) 437-7466
71
John M Frank Construction Company
(714) 210-3600
johnmfrankconstruction.com
70
Kellogg
(269) 961-2000
kelloggs.com
25
Kimberly-Clark
(888) 525-8388
kimberly-clark.com
61
Melissa’s World Variety Produce
(800) 588-0151
59
Molson Coors
(414) 931-2000
albertsons.com
firestonebeer.com
jellybelly.com info@jffixtures.com
hotline@melissas.com
jffixtures.com
melissas.com molsoncoors.com
2
Moss Adams
(310) 481-1206
marci.reynolds@mossadams.com
8
Nestlé Purina PetCare
(314) 982-1000
joe.toscano@nestle.purina.com
15
North State Grocery, Inc.
(530) 347-4621
61
Papa Cantella’s
(323) 584-7272
69
Peet’s Coffee
(510) 594-2100
peets.com
22
PepsiCo
(949) 330-5804
pepsico.com
21
Piping Rock Health Products
(800) 544-1925
71
R/R International
(805) 796-3989
IFC, 39
Ralphs/Food 4 Less
(310) 884-9000
ralphs.com
50
RBC Wealth Management
(213) 266-4609
rbc.com
27, 53
RMS
(818) 817-6712
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mossadams.com purina.com shopholidaymarket.com
tracy@papacantella.com
papacantella.com
pipingrock.com robertarr@live.com
mdodson@retailms.net
retailsolutionsus.com
PAGE
COMPANY
PHONE
WEBSITE
69
Sovos Brands/Rao’s
(415) 596-0548
hi@sovosbronds.com
sovosbrands.com
51
Southern Glazers Wine & Spirits
(800) 252-4797
southernglazers.com
11
Stater Bros. Markets
(909) 733-5000
staterbros.com
31
The Clorox Company
(214) 808-8113
clorox.com
10
The Illuminators
(949) 274-0069
illuminators.org
54
The Performance Group
(562) 293-1380
tpgsalesservices.com cdemaray@trugrocer.com
18–19
TruGrocer Federal Credit Union
(208) 385-5273
3
Tyson Foods, Inc.
(479) 290-4000
tyson.com
5, 69
UNFI
(323) 264-5200
unfi.com
26
Wine Warehouse
(800) 421-5904
winewarehouse.com
23
Winebow
(800) 365-9463
winebow.com
61
Wolfe &Wyman LLP
(949) 475-9200
32
Young’s Market Company
(714) 573-5633
info@wolfewyman.com
trugrocer.com
wolfewyman.com youngsmarket.com
CGA NEWS NEW MEMBERS CGA welcomes the following members:
buzzbox premium cocktails 42625 Jackson St Unit 111 Indio, CA 92203 Contact: Bob Lienhard, VP, Sales & Development E-mail: bob@buzzbox.com Phone: (888) 982-2899 Website: buzzbox.com
Harbor Wholesale 3901 Hogum Bay Rd NE Lacey, WA 98516 Contact: Rick Jensen, President E-mail: rick.jensen@harborfoods.com Phone: (360) 764-9188 Website: harborfoods.com
ICF 49 Discovery Ste 250 Irvine, CA 92816 Contact: Sravanti Bassa, Account Manager E-mail: sravanti.bassa@icf.com Phone: (619) 787-0736 Website: icf.com
Scotty’s Market 620 Manuel T Freitas Pkwy San Rafael, CA 94903-3106 Contact: Dale Lee, President Phone: (415) 479-2363 Website: scottysmarket.com
Tawa Supermarket, Inc. 6338 Regio Ave Buena Park, CA 90620-1023 Contact: Adrienne Lee, Legal Counsel Phone: (714) 521-8899 Website: 99ranch.com
VDG Brands, LLC 6956 Danyeur Rd Redding, CA 96001 Contact: Mike Shipley, President E-mail: mike@vdgbrands.com Phone: (530) 319-3217 Website: vdgbrands.com
Miner Mart 1046 W Yosemite Ave Manteca, CA 95337-5341 Contact: Mike Morowit, Owner Phone: (209) 823-6930
CAL I FO RNIA GRO CER | 79
MOMMY BLOGGER
The Comfort and Nostalgia of Shopping at Mom’s Market K I M B ER LY R A E M I L L ER WR ITER , ACTR ES S
There’s a sense of comfort and nostalgia in waiting on the deli line and wandering through the produce section that is filled with all sorts of things I couldn’t understand anyone buying as a kid. I’m looking at you, escarole. I recently started shopping at the grocery chain my parents frequented when I was a kid. It wasn’t a chain back then, when I was young it was a single market in my hometown that had a funny name, good prices, and fresh food. It was owned by an Italian family and had all sorts of specialty foods that the other markets didn’t; jars of peppers and tomatoes and olives packed in vinegars and oils, cheeses that didn’t come in hermetically sealed packages but big wax wheels and vats of salty water. The crusty loaves of Italian bread were baked on premises and were often still warm to the touch, stacked one on top of another in paper bags. The butcher knew my mom and would pop his head out and chat as soon as he saw us moseying down the meat aisle. Of course, as a kid, all of this was horrifying. I wanted American cheese in cellophane, brand name cereal and chicken nuggets like every other kid.
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Since making that fateful soup I’ve gone there every other week. These visits to this store that is not the store of my childhood, but close, is honestly a sort of salve in this crazy time. There’s a sense of comfort and nostalgia in waiting on the deli line and wandering through the produce section that is filled with all sorts of things I couldn’t understand anyone buying asa kid. I’m looking at you, escarole.
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Over the years that one little market has grown into a local chain and even though I live about 40 miles west of where I grew up, there’s one right near my house. In the three years that my family has lived here, I’ve passed it smiling to myself while my husband made fun of its silly name, and continued on my routine at other stores. That is until I decided to make a soup that called for fresh ground sausage and I knew exactly where to go, the place with the old school butcher counter.
I can picture every part of that original store in my mind. I can remember the smells of the cleaner they used on their floor, which aisles were too tight for the cart to go down so my mom would send me while she waited at the end.
I remember the crackle of the loud speaker, and the tang of the antipasti salad I’d munch on during the ride home. These memories create the kind of relationship between grocer and shopper that advertising and circulars can’t buy. When the pandemic is over, I hope that I can create these same sorts of normal, mundane, but comforting memories with my own kids. ■
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