PROGRESSIVEGROCER's A7 Challenges Temper 20 Optimism PGs editors reached out to members of the Retailers to focus on points of retailer community to ask them these questions: differentiation in 2017. >• What are your company's top priorities for 2017? >- What areas of the customer experience will you focus By Joan Driggs, Jim Dudlicek, on most closely? Bridget Coldschmidt, Randy Hofbauer, > What do you consider to be the greatest challenges Meg Major and Katie Martin and opportunities for the industry as a whole? > What impact do you foresee a new presidential admin• he bleak macroeconomic landscape, includ• istration having on the supermarket industry? ing deflation, and various regulatory issues, such as the Affordable Care Act, Fair Labor Standards Act and minimum wage laws, may The following retail executives shared be keeping retailers up at night, but grocers insights for our 2017 Retail Outlook: large and small are entering 2017 optimistic Maria Brous, director of media and community about the Trump administration, which is relations, Publix Super Markets viewed as largely pro-business. Richard Cashion, VP of retail operations, One of the hallmarks of the grocery in• Healthy Home Market dustry is that hard times bring out the best in innovation. T Chris Coborn, president and CEO, Coborn's Inc. It will be called for in the coming year, as competition for the food dollar continues to expand to nontraditional John Cortesi, president and CEO, Sunset Foods outlets, including subscription services, e-commerce Kevin Davis, chairman and CEO, Bristol Farms companies, and such nontraditional purveyors as home Wayne Denningham, EVP and COO, Albertsons Cos. improvement and home goods retailers. Scott Drew, EVP of operations, Smart & Final Stores Within traditional grocery retail, deep discounters, in• Dan Clei, EVP of merchandising and marketing, cluding Aldi and Lidl, the latter of which will make its U.S. K-VA-T Food Stores Inc. debut by 2018, are a threat to retailers unable to compete Heather Isely, EVP, Natural Grocers beyond low prices. Lauren C.R. Johnson, CEO, Newport Ave. Market A point of difference in favor of traditional supermar• kets, most agree, is customer service, which will be a focal Art Potash, CEO, Potash Markets point for many retailers. Expect those committed to the Dan Shanahan, president and COO, Buehler's Fresh Foods customer experience to invest more in recruitment, training KirkStoa, EVP and CFO, Festival Foods and retention. Experience will extend beyond smiling faces Jimmy Wright, owner, Wright's Market to mobile communications and e-commerce solutions, but grocers admit the financial struggle of investing heavily in both in-store and virtual customer service. By and large, they share many common goals, face Assortment is also a focus for the coming year, as retail• common challenges and recognize common opportunities, ers indicate they'll be investing more in their perimeter while expressing what might best be described as cautious departments, notably fresh prepared food offerings. Grocers optimism about the retail landscape, the economy and what recognize that shoppers want the convenience of prepared impact a new presidential administration might have on both meal solutions paired with the speed of takeout. in the coming year. Their responses follow, edited for space ... January 2017 I progressivegrocer.com I PROGRESSIVEGROCER's ayne Denningham, EVP and always be anticipating opportunities to provide COO for Albertsons Cos., pin• remarkable service, even if it means deviating from points store conditions, private the routine way of doing things," Coborn says. brands and people as Similarly, at Festival Foods, a De Pere, top priorities for the Wis.-based chain of 26 stores, a major Boise, Idaho-based focus of 2017 will be improving the guest retailer, which has experience — specifically, empowering grown organically and through acquisi• What are your store associates to "wow our guests," says Wtions over the past few years. Kirk Stoa, the retailer's EVP and CFO. As part of Albertsons' quest to be the company's "It can best be described as 'random acts "favorite local supermarket" in each of of kindness' for our guests." the communities it serves, Denningham John Cortesi, president and CEO of says sales growth and profitability will be top priorities Sunset Foods, says that this year's priori• driven by "maintaining our focus on run• ties for his five-store chain in north sub• ning full, fresh, friendly and clean stores, for 2017? urban Chicago include a focus on fresh, as well as ensuring our products offer the including organics and prepared meals. quality and variety of natural, organic and "We're competing with the likes of Blue local products customers know us for," Apron and other subscription services. chief among which are its successful own We need to be more innovative, so brands like O Organics, Open Nature, we'll also be focusing on digital mar• Eating Right and Lucerne. keting, applications and solutions," Private label will continue to Cortesi notes. "As we address Millen• serve as a critical component of nial shoppers, we're focusing more on Albertsons' future playbook, as will convenience and satisfaction." technology. "In 2017, we're going Art Potash, CEO of Chicago's to continue our focus on using Big Potash Markets, believes that growth Data and analytics to drive cus• — a major priority for 2017 — will tomer traffic and basket size through thoughtful price come as a result in investments in training and development investment, loyalty programs and personalized offer• of staff, as well as physical upgrades of equipment. ings," notes Denningham. "We're also going to invest in Lauren G.R. Johnson, CEO of Newport Ave. Market, our people and continue to be a company where people in Bend, Ore., minces no words when identifying her top want to come work and build their careers." priorities for 2017: "Increased sales. Due to new competition For Kevin Davis, chairman and CEO of Carson, Calif- in our area, we expect to remain flat through the first two based Bristol Farms, 2017 will be about increasing sales quarters, then experience a slight increase." at existing stores through more efficient promotion and Likewise, for Abingdon, Va.-based K-VA-T Food Stores merchandising, and improving the shopper service experi• Inc., which operates stores under the Food City banner in ence. The upscale grocer recently remodeled more than half Georgia, Tennessee, Kentucky and Virginia, 2017 will be of its stores, and while sales are up at all of those locations, about "growing sales, given the challenging headwinds of Davis believes it can do a better job introducing the newly deflation," as well as "improving the shopping experience remodeled stores and their added features to new customers and the solutions we bring to our customers," says Dan Glei, in communities it already serves. K-VA-T's EVP merchandising and marketing. This also will be the year Bristol Farms opens the first And Jimmy Wright, owner of Wright's Market, in of several new stores it will be debuting over the next 18 Opelika, Ala., says his top priorities are "finding innovative months, which, when completed, will mark the company's ways to grow profitable sales, in spite of food deflation and biggest growth in history. the competitive environment." A strong focus on people — internally and externally Of Healthy Home Market's newest store, Farm 2 — will be top priority this year for Smart & Final Stores. Family Foods by Healthy Home Market, set to open this Scott Drew, the Commerce, Calif.-based retailer's EVP month in Lenoir, N.C., Richard Cashion, VP of retail of operations, notes that his company will continue to operations for the Charlotte, N.C.-based chain, notes, focus on engaging and investing in associates through "With the new brand, our company is focusing on educat• continued education, internal promotions and new hires. ing traditional grocery customers about healthier lifestyles His company will also continue providing household and and selecting the best products to meet their needs." business customers with a differentiated offering and an Nutrition education always has been a major focus for updated, more convenient shopping experience. Natural Grocers, but 2017 will be a time to continue cre• Chris Coborn, president and CEO of St. Cloud, ating new, experiential ways to help customers know more Minn.-based Coborn's Inc., says his company's key focus about the foods they purchase, says Heather Isely, EVP will be further strengthening two of its core values: guest of the Lakewood, Colo.-based retailer. focus and executional excellence. "Our employees should Continued on page 58 >• I Progressive Grocer I Ahead of What's Next I January 2017 PROGRESSIVEGROCER's >- Continuedfrontpage 54 nage and shelf tags in the coming year will focus on or the past 86 years, Lakeland, Fla.-based the many ways that Festival Foods creates value for Publix Super Markets has prioritized the its shoppers. From the Tot Spot free child care while customer experience in its stores, shopping in the store, to curbside pickup, through its "stellar customer Festival's new tag, "It's the little things...," service [and] quality products will help draw attention to these extras. at competitive prices," in the Festival is also focused on store words of Maria Brous, director What areas growth through acquisitions and new of media and community relations, and stores. Stoa notes that competition in Fthat's not about to change now. Addition• of the Wisconsin, which has seen growth from ally, according to Brous, "we continue to larger regional players like Hy-Vee and look towards providing meal solutions for customer Meijer, and the acquisition by Kroger our customers, convenience, grab-and-go of Roundy's, continues to squeeze small items and omnichannel [solutions]." experience independents.