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[5 comments]

Do Consumers Trust National Chains When It Comes to Local Foods?

February 11, 2013

According to a study from A.T. Kearney, consumers have trust issues when buying local food at national and big box retailers.

The online survey of 1,300 U.S. consumers found that most people say they shop primarily at big box or national chains. However, when asked about the trustworthiness of the different formats to deliver local food safely, farmers' markets and farm stores rank first, followed by natural foods supermarkets, and locally owned supermarkets. Relative to price, farmers' markets and farm stores outperformed all other formats, followed by big box retailers, national and local supermarkets, natural foods supermarkets, and online grocers.

The study also found shoppers open to switching stores for a better local food selection. Almost 30 percent of grocery shoppers say they consider purchasing food elsewhere if their preferred store does not carry local foods. When asked about the availability of local food at their preferred supermarket, 65 percent say their supermarket offers at least some kind of locally sourced food. However, only five percent indicate they shop for local foods at big box retailers, and 15 percent at national supermarkets. Respondents say their main source for local food is still the local farmers' market and farm stores.

The report also indicated that part of the challenge for bigger stores is the lack of clarity around the term 'local,' with many retailers "tailoring the term to their advantage with little transparency into how they define it." Small farmer organizations have complained about instances where fruits and vegetables harvested hundreds of miles away being declared local.

Among the study's recommendations:

Understand that fresh matters. No matter the format, freshness and quality are paramount. It is critical that local food products are adequately presented in terms of shelf space and location.

Convey local products' authenticity. Developing dedicated sections with in-store signage is a strategy for highlighting local food assortments. Another option is to create a store brand for local food products.

Consider the implications for buying and category management. Category buyers must establish visibility within each defined region with regard to price and quantities, and make decisions on local assortments.

Don't underestimate the supply chain impact. Having local farmers supply nearby stores, even in limited quantities, will force a reconsideration and redesign of the traditional supply chain model.

Discussion Questions:

How can big box stores and national chains improve trust around local foods? Will farmers' markets, natural foods grocers and local supermarkets always have some advantage marketing local foods?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Which of the study's four recommendations will most improve trust issues around local foods for big boxes and national chains?

Comments:

I have a better question (sorry Tom)—does anyone believe 30% of the shoppers will walk if local foods are not available? And how many shoppers know that a chain is national (and wouldn't that only be Walmart and Target)? So I don't think there is a lack of trust, so there is probably nothing to improve (per the survey—we can always do a better job).

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Dr. Stephen Needel, Managing Partner, Advanced Simulations

This is a story that has to be told at the point of purchase. In-store marketing, always important, has grown dramatically in importance over the past 15 years.

Kroger is a national chain that very effectively delivers the message about how they have worked with local farm families for generations, placing pictures and messaging in front of produce, in-store circulars, and register. In the process, they have a loyal shopper base who fills a more complete basket of produce, meats, bakery, dairy, and center store.

If you have a good story, and consistently execute upon it, make the In-store media a tool to influence the consumer. They travel to these types of supermarkets 99+ times per year. They obviously trust them.

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Roger Saunders, Managing Director, Prosper Business Development

First, the local food movement is one of the most positive social influences ever. Forget Monsanto...up with organic local markets!!!

The suggestions are spot on, but maybe we could take them to a higher level. Why not have the actual farmers IN the store? If there is distrust already, having signage won't do it—anyone can make a sign. I'm talking about putting up the rickety, beat-up display counter they use in the market. I'm saying make it possible to back the old pickup right into the store. Offer vegetables that still have God's good earth on them! Heck, let customers put the money right into those worn and weathered farmer hands. There's always a way to track the money so everyone gets their share.

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Ian Percy, President, The Ian Percy Corporation

In addition to the recommendations noted, food retailers need to understand their customers needs relative to key categories that could be locally sourced. With this knowledge, I would identify the top locally-sourced products. I would merchandise these products together and tell the story about each product and its suppliers. These categories could be changed based on the season or key event. Do not limit local to food only. For example, Halloween could highlight pumpkins, costumes, flashlights, etc. that are locally produced, reinforcing the retailer's commitment to the community.

The chains will always be disadvantaged relative to farmers' markets and local supermarkets. These smaller retailers know their customers and their needs. In addition, farmers are the most highly respected group of workers in the world. This provides a connectivity customers seek in addition to the freshness perception already a significant point of differentiation.

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Richard J. George, Ph.D., Professor of Food Marketing, Haub School of Business, Saint Joseph's University

Partner with local farmers, display the sourcing information, include this on websites, circulars and brochures. To have credibility here, develop messaging around the area fruit and vegetable producers. A growing number of shoppers are truly interested and motivated to follow up. Smaller local stores and markets will be in a better place to feature local produce; they will include the people and places directly to tell the story.

Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

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