Retailers Choose Safe, Healthy Paths in 2012
This issue presents a look back at 2012 and analyzes the most important developments in the food industry.
In many ways, 2012 was the year of the independents, with promising growth experienced by grocery and c-stores. But it wasn't business as usual everywhere: Tesco acknowledged disappointing results for its U.S. operation and weighed shutting locations; Supervalu engaged in a strategic review and prepared to sell five banners; Hostess Brands lost the battle between management and labor; and A&P emerged from bankruptcy with a new growth plan.
A variety of newsworthy items reshaped our business environment for 2012 and are a prelude to the future:
- Retail industry sales grew 4.2 percent from the prior year, according to the National Retail Federation, representing the highest jump in four years.
- Revenue generation, rather than cost containment, continued to be the solution.
- Health and wellness drove growth, but consumers perceived healthy eating costs more.
- Information, big data, shopper insights, predictive and business intelligence were king to understanding how to fulfill shoppers' needs.
- America's political system needs an overhaul. America's position on taxes, job growth and social reform heavily impacted the retail industry.
- Multichannel retail strategies saw products and shopper patterns change to take advantage of diminishing consumer loyalty.
- New product launches, the lifeblood of the industry, were the highest in four years.
- Social media continued to grow in prominence, becoming a powerful voice in shaping public perception, both good and bad, as we saw in the dismantling of BPI through the "pink slime" controversy.
- $25 billion by 2014."
- Retailers and grocery manufacturers found more common ground on key issues. Pamela Bailey, GMA president and CEO, speaking about the organization's Trading Partner Alliance, stated, "Collaboration among CPG partners has never been greater. Advancements in innovation, technology and joint business planning have helped our industry serve consumers better, faster and more completely than ever before."
- In a December 2012 Retail Leader poll, when asked how they would describe current business conditions, 41 percent of respondents chose "positive" compared with 32 percent in 2011.
Whether these events and activities offered a roadmap for 2013 remains to be seen. My perspective is many of the issues unfolded through a motivating desire to maintain stability and security in a rapidly changing and unpredictable world.
However, for companies to be successful in the near-term future, they will need to exhibit a higher appetite for risk-benefit and stay ahead of the curve instead of behind it. We'll see how well we navigated the curve this year in our 2013 Annual Report.
President and CEO,