By Jennifer Sasseen
The (Everett) Herald Business Journal
The way millennials shop is going to change the grocery business, says local grocer Mike Trask, and smaller independent stores will need to embrace new technologies to survive.
Owner of the Granite Falls and Edmonds IGA stores, Trask, 61, was recently named chair of the board of directors of the Washington Food Industry Association, a trade group representing the state’s independent grocers and suppliers. Trask took time out of his busy schedule to give his thoughts on problems the trade group faces.
“One of the biggest pressures right now is the online,” Trask said. “And so all of us are starting, I think, to form a five-year plan, a four-year plan, to make sure that we’re in the online business.”
That means offering loyalty cards with deals tailored to the customer and emailing ads and coupons, but also setting up websites and digital apps that allow customers to buy their groceries online. His stores already offer grocery delivery in Edmonds, where a good share of the customer base is seniors. He’s planning to expand those services this year to his Granite Falls store, he said, and both stores offer the option to order online and pick up in-store.
“And that is really one of the things we think the millennials will want,” Trask said. “They can pick it up on their time frame and not have to be home. They work during the day and might not hit a delivery window.”
He’s also breaking out a new shopper app this year that “will give it all to them on the phone,” Trask said, because he thinks that’s the way millennials are going to shop — with their smartphones.
“I just don’t think there’s any way around that.”
Another big challenge for the independents is the line of succession, Trask said. Though smaller stores have regained much of the business they lost during the recession that began in 2008, the pre-recession bank loans have not returned. “I got this store on a handshake and a plan-on-a-paper napkin type of thing,” he said, referring to the Granite Falls store, which he bought in 1999 from brother Stan Trask and his business partner, Larry Fritz. (Hence the corporate name, Stanlar Inc., which Trask hasn’t bothered to change).
But gone are the days when a person’s reputation was enough to secure a bank loan, said Trask, who started out in the business bagging groceries and worked his way up through the ranks to store director and district manager positions.
And even if the loans were there, the buyers are not. The situation poses a dilemma for some 65-and-over store owners, who’ve maybe lost their vision for the future and are just hanging on, he said.
“We’re all aging and we’re not getting the people underneath us that will take over our stores someday,” he said.
The Washington Food Industry Association is aware of the problem, Trask said, and has put a lot of time and effort into developing leadership courses and a scholarship program to train a new generation of store owners.
Besides his duties with the Washington Food Industry Association, Trask sits on the board for Unified Grocers, which is headquarted in Southern California and bills itself as “the largest retailer-owned grocery cooperative in the western United States.” It gives him a lot of insight into the grocery industry, he said.
“What’s happening with us is the same thing that’s happening at the wholesalers,” he said. “They have the same problems, they’re just one big grocery store. So when you sit there and try to solve problems for Unified, you’re also trying to solve problems for yourself.”
Each year, members and board members of the Washington Food Industry Association travel to Olympia to meet with legislators and talk about proposed legislation and how it will affect the independent grocery industry. The need for transportation reform is a hot topic in the grocery world, Trask said. Delivery trucks spend far too much time stuck in traffic and that costs everyone money.
“From the wholesalers’ standpoint, transportation is a lifeline to the stores,” he said, “and probably the biggest cost they have is trucks and fuel and drivers on the road.”
While the chain stores can fill a truck and deliver to many stores at a time, it’s different for the independents with only one or two stores. They’ve had to cut back from three or four deliveries a week to two deliveries to maximize the trucks and reduce costs. If an order doesn’t show up in a delivery for whatever reason, store shelves sit empty for days.
Yet gas taxes collected to fix traffic problems in Washington are not being used wisely, Trask said. For example, it costs much less to build a bridge in other states than it does here.
Proposed legislation to adopt Seattle’s $15 minimum wage statewide is another bone of contention. The Washington Food Industry Association accepts that the minimum wage needs to be uniform throughout the state and raised “to somewhere north of $10,” Trask said, but “we don’t accept the fact that it has to be $15.”
Many of the independents already pay a $15 average wage or more, as well as medical benefits, he said, but a lower training wage is a necessity. Grocers can’t afford to pay young people $15 an hour to bag groceries, he said, yet that’s how many people, from politicians to Microsoft executives, got their start.
“They all started out in that town grocery store,” Trask said.
At $15 an hour, courtesy clerks will become a thing of the past. Employees who check out groceries will also have to bag them, he said, and the level of service will decline.
“I really think this is going to be a death sentence for kids getting jobs,” he said.
The ban some cities have imposed on plastic bags also needs to be made uniform throughout the state, Trask said.
Reform is also needed in the state’s workers’ compensation system, administered by the Department of Labor and Industries, Trask said.
Regarding the Haggen debacle — in which the Bellingham-based company went from 18 stores to 164 after acquiring 146 in the Albertsons-Safeway merger, and just a few months later filed for bankruptcy protection:
“There’s just no way, when they announced that, I could even have fathomed that they could pull that off,” Trask said. “In most of the industry, that was the biggest awe, that they were going to try to do that. Not that they were buying those stores, that they were going to try and pull it off.”
Getting involved in something that big, the whole thing steamrolls and you don’t have time to learn from your mistakes, he said. Haggen probably got some bad advice, didn’t realize store prices were raised and by how much and didn’t understand their markets.
“They’re just a great company, always have been,” Trask said. “Their forefathers were great independents. So it’s sad to see, but I believe that they’ll come out of this with some shape or form of something that will be intact.”