by Jim Dudlicek / NGA Director, Communications and External Affairs
The director of grocery at retail technology company Upside shares her thoughts on the current state of the industry and what the future holds for independent grocers.
1. Challenges of the past year continue to linger into 2023, and despite a gradual easing of inflation, operators and consumers are still feeling the pressure. What are your expectations for the coming months?
It’s been a tough year for everyone, and the past year’s challenges will continue to impact the grocery industry through 2023. Specifically, consumers are still paying more, and retailers are still making less.
On the bright side, grocery store prices are dropping. This is definitely a positive sign, but I think it’s important to remember that both sides still need ways to alleviate the pressure.
2. More than three years after the pandemic began, how is your business different today?
It’s been an exciting time for us. Even with all the challenges of the pandemic, we’ve managed to double our transactions through the Upside platform every single year for the past few years. And this past year was no exception – we grew faster than ever before.
There were two main drivers behind our growth. First, people were looking for ways to stretch their dollars further, especially when it came to essential categories like food and fuel. And as it happens, those are exactly the categories we specialize in.
The second factor was what was happening on the retailer side of the marketplace. With inflation driving up costs across the board, retailers were looking for new ways to offset those expenses and generate additional revenue. They knew blanket discounting wasn’t a sustainable approach and cannibalizing their profit. So, they turned to us, asking, “How can we ensure that we’re earning incremental profit from the promotions we’re offering?”
As more and more retailers adopted our platform, especially in the food category, we saw a 70 percent increase in user retention. This is incredibly powerful for everyone involved – retailers can earn incremental profit, while users are able to save money on essential purchases. All in all, it’s been an incredible few years of growth and innovation for us, and we’re excited to see where the future takes us.
3. What are some potential strategies for independent grocers to navigate the landscape of mergers and acquisitions and maintain a competitive edge?
There is a growing trend of mergers and acquisitions in grocery, so local and independent grocers need to be prepared for continued changes and larger retailers fortifying their bargaining power with suppliers.
A number of regional grocers we work with have taken market share away from these high-powered, big-spending retailers using personalized incentives to entice new customers and get the infrequent ones to shop more often.
4. What must independent operators do to ensure growth and success?
As an independent operator in the grocery industry, staying ahead of the curve is key to success. To start, be engaged! Supporting associations like the National Grocers Association (NGA) will help shape policies that support the industry. Sharing best practices will help you and fellow grocers adapt to changing market conditions.
Finally, as someone who works at a retail technology company, I recommend investing in the right digital strategies. Grocers should utilize a mix of digital strategies and personalized approaches to engage customers effectively at every stage of the buying process.
5. If you weren’t in the grocery industry, what would you be doing?
It’s hard to think of a life outside of grocery, from any angle. If I had to make a shift, my mind goes in a few directions. For one, I’m committed to always being a mentor and developing others. I could also see myself exploring opportunities in the health and wellness space. And, if the stars aligned and I had all the resources I needed, I’ve always dreamed of opening a small resort in Costa Rica, where the ”pura vida” way of life is deeply ingrained.
