FD Buyer: Going Solo
Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Dairy Buyer magazine.
Between being ignored by the big vendors and being nitpicked to death by the government, it’s getting much more difficult to survive as an independent retailer. So how are we supposed to compete?
Well, I may be angry, but it doesn’t do any good complaining that the playing field isn’t level. You can win and pick your spots. So I work with a lot of smaller regional suppliers, and I buy deal to deal. Then I’ll discount with lots of signage. I don’t make 35 percent or 40 percent margin like some of the larger stores do, but my father always said that you don’t take percentages to the bank — you take profit dollars.
Over the past three years, I’ve cut 2,000 SKUs, mostly from household items that the big box stores sell for cheaper than I can buy. What’s the point of stocking them? I run a strong perishables department and put in new Zero Zone cases with LED lighting, so our frozen department looks attractive and we’re energy-efficient.
All of our deli products are 100 percent homemade, and we offer foods that are healthy, diabetic-friendly and gluten-free. I’m also a broker and work with a supplier out of Cleveland to get incredible deals.
A few other things I do: I buy eggs early in March because they’ll last through Easter when the prices go up and you can look like a king with lower retails, while maintaining a good margin. You have to be faster and smarter than the big retailers — they set their advertising months in advance, but I’m like the little speedboat that can jump on a deal and put it in my ad tomorrow. I also buy perishables closeouts as often as I can. Once I got a deal on 12-ounce Johnsonville sausages and I sold 320 cases of them in just three days, because I could sell them at 99 cents.
Of course to be in the best position for deals like that, you have to really work with the regional suppliers and support them. Pay them on time.
It’s also important to monitor pricing. If your sign says "two for $5" and the customer finds you’re charging $3.29, make it right for them by offering a $2 gift certificate and apologize.
Service is also an important thing for you to have when you’re competing with the big box stores. Their service is terrible, so this isn’t hard to do. Don’t tolerate a poor attitude from your workers.
Finally, it’s really important for independents to network constantly, to get the best deals. I go to the annual National Grocers Association convention, several food shows, and stay active as a panelist on RetailWire.com. It’s also good to keep pointing out the unfairness in the system, whether people like it or not.
Discussion questions: What other steps can independents take to stay competitive besides the ones mentioned in the article? Of those mentioned in the article, which ones provide the biggest differentiator against larger competitors?