By Meggie I. Foster
Assistant Editor

LOUISVILLE, Ky. — While government officials develop new food and agricultural policies that affect how food is grown, processed and shipped, it’s important to recognize retailer concerns and growing trends on the consumer front, said Bill Price, president of Howard’s Management Group, affiliated with IGA Supermarkets.

“There’s been a lot of confusion on COOL (country of origin labeling) laws,” said Price, who spoke during the National Institute for Animal Agriculture annual meeting on April 1. “To be honest, when we first heard about it, we were pretty scared. But it really wasn’t as tough as we thought.”

IGA customers aren’t saying much, according to Price, “but I expect people to start speaking up as they begin to learn more about country of origin labeling.”

The biggest change for supermarkets as a result of new COOL laws, he said, was an increase in record-keeping activities. Price estimated a total cost of $641 million for all parties involved during the first year.
Another major concern for retailers is food safety. “Significant work is being done to educate staff, delivery drivers and all folks involved to make sure food is shipped, delivered and handled with the utmost safety in mind,” he said.

Price said IGA Supermarkets follow FMI standards of food safety and that confidence in food safety recently returned to 81 percent from an 18-year low of 60 percent in 2007.

“We rely on the producer and the packer to provide us a safe and wholesome product,” he said. “We all have a stake in food safety. Once consumer confidence begins to waver in U.S. meat products, sales will do the same.”

Consumer trends

“When you think about buying habits today versus the 1970s, you’re talking about ingredients versus meals,” explained Price.
Major consumer trends include more women in the workforce and more one- to two-person families. “When more women began to work full-time, they had less time to prepare meals in the evening and wanted quick, easy solutions,” he said.

“Also, fuel prices staged a new change in food buying habits. We took advantage of higher fuel costs last year to really showcase our meat coolers. One thing that we noticed (last year) was that customers were looking for stock-up deals to save on fuel costs.”

Price also mentioned more consumers eat at home during inflated fuel prices and more people tend to pack their lunch. Another change he noted is that Sunday has become the busiest shopping day, while it used to be Saturday. Historically, Sunday has been a slow shopping day and supermarkets used to employ the least experienced cashiers and relax other practices, he explained.

“There’s a lot of dynamics that affect consumers; we’re trying to get our arms around it,” he said, noting depleting inventories. “People are losing jobs, their homes are losing value, their spending power is lower and energy costs are greater. These are principles that directly affect buying habits – you think differently about what you buy during tight times.”

Price explained consumers are reacting to these economic changes by “trading down. Instead of purchasing the fresh doughnuts, they’re buying the commercial brands or instead of Kraft macaroni and cheese, they’re picking up the generic brand,” he said.
Other changes include a growing interest in health and wellness and increased use of coupons.

“We’ve also noticed a surge last year in canning and frozen supplies,” he said, adding “if you can’t eat it, you don’t need it.”
On a positive note for livestock producers, Price said that meat continues to be the center of purchased items amongst IGA customers. Meat sales account for 15 percent of all IGA sales, with beef purchases accounting for 34.9 percent of all meat, pork, 13.2 percent, and poultry, 7 percent.

Describing one of the most successful elements of IGA Supermarkets, Price said that the key to their hefty meat sales is having a good manager at the meat cooler. “A good meat manager can affect sales significantly,” he said. “People are looking for good customer service at the meat counter and that is something that IGA is known very well for.”

All in all, he said for IGA customers, value is a key word and it will continue to be for the next couple of years. “We’re trying to find our place in the marketplace and we’ll be very competitive to protect our sales base,” he added.