The "traditional" supermarket, faced with numerous challenges, is tightening its belt and pushing out its walls, with internal economies and more varied product selection dominting industry plans for the future.
According to the Food Marketing Institute the trade association for supermarket chains, stores have become "larger and fewer" (last year there were 176,000 grocery stores in the U.S. 50,000 fewer than in 1968).
Robert Aders, FMI's president, said the larger stores will devote considerable space to non-grocery items in an effort to improve their profitability. One California chain estimates that 31 percent of its sales are now non-food items. Pharmacy and clothing items may yield 40 percent or higher profits whereas earnings on grocery items are about 22 percent - which the industry claims shrink to less than 1 percent when the cost of doing business is subtracted.
Aders expects that labor and energy two major expenses, will continue to rise. "Labor costs have increased faster than sales," he said. "So obviously the gross profit has to be improved," despite the potential psychological impact of higher total bills at the supermarket.
To meet these challenges, merchants are making a number of adjustments and innovations. First, in an effort to cater to working women (and men), stores have increased their hours of operation. Earlier openings and later closings have been successful. A spokesperson for King, a New Jersey chain, said adjustments have been made to ensure "that the store looks as good at 6 or 7 p.m. as it does during the day, that specials are available, that competent cashiers are on duty."
Along with catering to single working persons, small-family shoppers and the elderly, there is a trend toward offering produce in bulk rather than prewrapping it. This enables those who only need a small amount to buy a small amount.
Computer-assisted-checkout is spreading rapidly. Scanners now are in nearly 400 markets, an 80 percent increase in the first eight months of this year. Supermarket executives say the machines speed check-out time and improve cashier accuracy. The industry expects this procedure to bring benefits behind the scene as well, improving inventory control and thereby keeping stores better stocked.
Not only have chains been building bigger stores, but they are remodeling older ones. Jewel, the Chicago-based chain, has "loosened the older stores up" by widening aisles, enlarging check-out areas and creating extra shelf space so less stocking is needed during peak shopping hours. In their new, extra-large stores, Jewel has used decor and department concepts (such as "Pier 14," a fresh fish area) to fight "impersonality." Employes staff various departments - even the "self service" sections - to provide personal contact with shoppers.
At King there are direct phone lines into the meat and deli departments so shoppers can place orders before they come to the store. An extra cash register is available during lunch time to speed checkout for office workers.
Check-cashing is another consumer convenience that has boosted business for the Alpha Beta chain in California. Customers apply for a "security service card" and are able to validate their own checks in a machine. Thus there is no need for a supervisor to approve each check and no delay at the checkout counter. Alpha Beta also has introduced a "new products table" as a promotional device.
Chains across the country report a marked increase in produce sales, and many of them expect to enlarge displays and stock more fo what the trade calls "exotic" fruits and vegetables. Japanese mushrooms and a peppery watercress from Denmark are selling very well in California. And in some stores "natural" foods - nuts, dried fruits, juices and grains - are offered in a separate display.
A "bake-off" service, in which consumers select prepared dough-loaves of bread or rolls - which is baked for them while they shop, has provided dual benefits in Los Angeles and Chicago. The shopper gets an absolutely "fresh" product, and the smell of baking permeates the store to stimulate the appetites of passing shoppers.
The appeal of floral items its growing. In addition to selling seeds and plants, some stores offer fresh-cut flowers and even employ a florist to run the department and do arrangements.
Demand for prepared frozen items - convenience foods - is said to be growing and some supermarket executives think the reason isn't just sociological. The products themselves are better, they contend. FMI's Aders feels that anticipated improvements in-cooling equipment may help conserve energy use and costs in frozen food areas.
Consumers appear to have made headway, too.Stores will offer more detailed labeling information and use nutrition more as a selling tool. For example, Schnuck's in St. Louis not only labels its ground beef with the exact percentage of fat, but has a machine at the meat counter with which customers can test fat content for themselves if they wish to.
All indications are that the market is segmented today. Different areas are taking on their own individuality, life style and purchasing patterns; and food retailers are beginning to tailor their stores to the specific community. Other businesses have been doing that for years, buthow what it will mean for food marketing remains to be seen.
One FMI officials sums it up this way: "The days when we had a prototype [supermarket] are over."