For Immediate Release

Contact:

John D. Thompson
Communications Director
(703) 437-2314

N.G.A. INDUSTRY AND TRADE RELATIONS COUNCIL
REPORTS ON PROJECT TO BUILD CENTER-STORE SALES

RESTON, Virginia (May 6, 2000) --- The Industry and Trade Relations Executive Council (ITREC) of the National Grocers Association has published a new report that addresses the issue of shrinking volumes in the center of the store faced by many supermarkets. Entitled A New Vision for the Center Store, the report details the cause of the sales decline and presents the case for improving the situation through the implementation of four strategies.

"By identifying and then targeting for correction the base causes of the erosion of center-store sales experienced by many grocers, ITREC is assisting those supermarket operators to recapture the sales of grocery and nonfoods products lost to competitors," said Thomas K. Zaucha, N.G.A.’s president and CEO. Zaucha added that ITREC is concentrating on a single set of objectives so clear results can be delivered to N.G.A. members.

The report, which was produced with the active participation of dozens of independent retailers, wholesalers and manufacturers, reveals that total sales in grocery and non-foods at a majority of supermarkets have decreased since 1990. This loss of volume is due primarily to increased competition and pressures from alternate channels, as well as the emphasis placed on perishables by retailers trying to address the consumers need for more fresh foods in the diet and seeking to recapture sales lost to foodservice and a corresponding lack of resources dedicated to the categories that make up the center store.

ITREC developed four strategies to help supermarkets counter the attrition and lack of focus that has been experienced in the grocery and non-foods departments. The goals of the four strategies are:

Instill Trust — Develop rationale to demonstrate the absolute imperative that retailers, wholesalers and manufacturers accomplish mutual full disclosure, trust and cooperation in all appropriate dealings, if they are to successfully compete and grow in the future.

New Business Model — Develop an economic model describing the present critical, operational dynamics of the industry involving the pricing, flow and sale of products, including the technological systems required, to insure the competitive capability of independent retailers and wholesalers.

Research and Analysis — Thoroughly analyze all aspects of dry grocery and non-foods sales by identifying which product lines makes up the center store; confirming that an actual shift in sales has occurred; and recommending approaches for trading partners to recapture these sales.

Communications — Insure that N.G.A. utilizes its unique niche as the association that services the independent retail and wholesale sector by utilizing all necessary resources, including communications process, meeting and conference formats and overall influence, to insure the strategies and action plans of the ITREC receive top priority and visibility.

ITREC is currently collecting several recommended best actions–specific solutions that have proven to deliver improved results in the grocery and non-foods departments. The Council will then publish the recommended best actions along with the new business model and additional research and analysis of the challenge in a complete document expected to be published in September.

"In the coming months, ITREC will develop several concrete tactics retailers and their trading partners can employ to improve center-store sales by looking at real-life success stories and turning them into easy-to-replicate case studies," said Frank DiPasquale, N.G.A. senior vice president. "These recommended best actions will them be distributed to members so they and their trading partners can consider implementing these processes at their operations."

A New Vision for the Center Store was prepared by Ronald Margulis, managing director of RAM Communications and a consultant to N.G.A. Bill Bishop, president of Willard Bishop Consulting, has been retained to help with the second strategy and develop an effective economic model that creates opportunities for retailers to recapture center-store sales.

The Industry and Trade Relations Executive Council (ITREC), which is led by executives from the retail, wholesale and manufacturing communities, is charged with researching the challenges surrounding industry and trade relations practices and making recommendations on how the industry can best overcome those challenges.

N.G.A. is the national trade association representing the retail and wholesale grocers that comprise the independent sector of the food distribution industry. An independent retailer is a privately owned or controlled food retail company operating in a variety of formats. Most independent operators are serviced by wholesale distributors, while others may be partially or fully self-distributing. N.G.A. members include retail and wholesale grocers and their state associations, as well as manufacturers and service suppliers.

For more information about N.G.A. and the independent sector of the industry, see the N.G.A. website: www.NationalGrocers.org.

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