By Joel M. Albrizio, President
"The Future Is Supermarket Profitability?"
We May Well Be Headed Back To The Beginning Where Supermarkets Dominated!
As my first article of 2016 its always interesting to look forward and see what might be on the horizon. Whats next in food retail? Who will have the next big idea?
As a supermarket do we have a chance and or can we compete?
Lets take an in depth look at what the future holds. We all agree if we knew what the next big thing was we would seize the opportunity and create the retail organization to exploit such market moves.
Ok, that said we see two areas of the supermarket space evolving.
The first is heath care. Whether we keep Obamacare over time or we introduce a new more seamless transition most would agree health care as we know it is changing and will morph into a new hybrid yet to be fully determined. This will affect food retail and we will examine this further.
"Automakers Follow Tesla Into The Electric Powered Automobile Space"
The second is the evolution taking place in the use of fossil fuels, specifically gasoline. As we speak every auto maker is rushing to market with some form of electric powered vehicle.
Who would have believed the price per barrel for oil would ever drop below $40 a barrel and Saudi Arabia would liquidate some of its valuable investments in the Sovereign Wealth Funds which they amassed over generations for rainy days?
"So 2015 really had more events than immediately met they eye"
Furthermore lets examine how, when fully implemented these changes in the marketplace that are taking place may very well return us to the golden age of food retail for the conventional supermarket.
So back to health care. Obamacare is an intricate look at the United States government involving itself in a national health insurance coverage program.
The theory is if everyone is insured and actually mandated to be insured, health insurance through 100% membership would become less expensive to both the employer and the purchaser.
One of the most expensive aspects to the Obamacare plan is the prescription program.
"CVS Has A Hold On The Prescription Industry"
As CVS cornered the market on prescriptions nationwide CVS decided to expand its SKU base and average sale by adding typical grocery items and specials to its shelves.
As Obamacare has started, one of the first changes we notice is the move for more and more formerly prescription required products to be removed from the pharmacy section of CVS and sold over the counter.
For any national health care program to be successful any and all borderline products requiring a prescription need to be sold over the counter removing these products from the "Obamacare" insurance subsidized health insurance.
We see this transition of products to the shelves of supermarkets as an important opportunity for the supermarket retailer. It is important to both understand, stock and advertise these former prescription products lessening the consumers need for CVS and other dominant pharmacy...retail everything companies.
The better the supermarket retailer stays on top of opportunities....
As insurance coverage changes make these now over the counter products available to more customers the supermarket is likely to return to its aisles.
Keep in mind these pharmacy shoppers defecting to companies like CVS is what killed the center store for todays supermarket retailer.
"Lets review gasoline and its possibly positive effects on the supermarket retailer"
Many supermarkets have become involved successfully in gasoline cost reductions tied to in store retailer food purchases.
As we all see and previously discussed almost every automaker is now offering an electric automobile. If as this move toward "fossil energy conservation" takes place the supermarket retailer offers a branded charging station at the supermarket location theoretically any shopper with an electric powered vehicle could charge the vehicle while they shopped.
While this opportunity to band a new category is significant by itself, this could signal the end to the "get gas and buy a few items mentality" of the convenience retailer. Wouldn't this in fact possibly trigger the end to the supermarkets largest competitor?
"How retailers go to market seems interesting going forward"
Just imagine what the future might bring for todays innovative supermarket retailer what retail food can and will become.
We believe any supermarket retailer who really visualizes todays forward looking opportunities will enjoy a golden age of supermarket retail once again like never before imagined.
Who will be the first to offer supermarket retailers a turn key opportunity to offer the customer a branded automobile charging station as a part of the supermarket experience?
"The future is bright.....Let's look forward"
Thank-you for all of your ideas and support!