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12/17/2021

Canada's grocery leaders share their outlook for 2022

Canadian Grocer asks industry players to share their hopes and fears for the year ahead
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Headshot of Canada's grocery leaders
L to R: Giancarlo Trimarchi, Darrell Jones, Gary Sorenson, Brad McMullen

These remain uncertain times in Canada, with hopes for an end to the pandemic offset by rising concerns of a new variant, while larger economic forces buffet the grocery sector and seem likely to continue in the weeks and months ahead.

With this in mind, Canadian Grocer reached out to a handful of grocery industry leaders and asked them to share their outlook for the year ahead. (Responses have been edited for length and clarity.)

In terms of your business, what are you feeling most optimistic or hopeful about heading into the new year?

 

Darrell Jones, president, Save-On-Foods: Looking ahead, we’re feeling most optimistic about the world continuing to open up, and the confidence we have that our team can handle everything that comes at us. Our people are incredibly resilient, as they’ve shown throughout the pandemic and in the face of fires and floods in our home province of B.C. With everything that has come at us, our team is so nimble and passionate about doing the right thing for their customers and communities and I just couldn’t be more proud.

Brad McMullen, president and co-owner, Summerhill Market: I’m hopeful about getting back to focusing on the evolution of our business. Going from two locations to four amidst the pandemic was a lot, and I’m simply looking forward to getting to many of the initiatives we planned years ago.

Giancarlo Trimarchi, managing partner, Vince's Market: There is a lot of noise right now around the rising cost of doing business and inflationary pressures on the cost of food. We know that 2022 will bring new challenges that we will need to work through and overcome. I am optimistic that the gains our industry has made in the past 18 months will sustain and that customers will value the goodwill we have built in serving them during the pandemic, and now as we work through the recovery. Assuming we work through recovery fully in 2022 is another source of noise, as we really cannot predict a timeline on the existing variant of concern (or ones that may develop). I am an optimist by nature, so I believe that whatever is thrown at us, we will be able to adapt and find the opportunity for growing our business.

Gary Sorenson, president and chief operating officer, Georgia Main Food Group: We are feeling more optimistic about our ability to predict and forecast our business next year. In the past two years the people of British Columbia have not only endured the COVID pandemic, but also the recent floods that devastated our province and just prior to this we battled the worst forest fires on record. As 2022 unfolds we are hoping the worst is behind us and we will make sound business decisions that are not influenced by worrying about what is the next disaster. We also hope for improved supply chain, for stronger employee recruitment, and that we can service our communities without interruption.

What are you most anxious or worried about?

 

Jones: The state of the Canadian economy is one of my biggest concerns. We’re trying to recover from the ongoing impacts of the pandemic, and rising inflation is going to make that recovery even more challenging. We’re also facing significant challenges from the labour market. With a large bulk of Canadians aging out of the labour force and the pandemic slowing the growth of available workers in other demographics who could fill those gaps, the economy is in a labour crisis. We are a growing company and need a pipeline of talent to continue to take this company to the next level.

McMullen: What keeps me awake at night is not knowing who or where our competitors are coming from. We used to see them in the form of a building somewhere as some form of a physical store. Now they come in the form of sophisticated companies with deep pockets using technology to access our customers, of which we previously relied on our unique locations.

Trimarchi: Many of our customers have never experienced such a short period of rapid inflation on the cost of food. The first quarter of 2022 will bring significant adjustments to a broad range of products (particularly in dairy and grocery). This is on top of the already growing cost of food over 2021. I will be closely watching how our customers adapt or adjust their purchasing habits. Will customers move to discount and private brand offerings? For the independent like us, this is a space we often cannot compete well in. Our category management team needs to be hyper-aware of our customer reaction and be prepared to pivot and build upon where we do have a competitive advantage—the fresh departments. In fresh, we need to execute on our value proposition.

Sorenson: Runaway inflation is what is keeping us up at night. The cost of goods, transportation increases, wages increasing, these increases as well as other increases are pushing expenses far beyond what anyone anticipated. We are challenged every day to find the balance between the increased cost of goods and the retail price point that is passed on to our customers.

If you could have one wish to fix or change something in the industry, what would it be?

 

Jones: We’re experiencing unprecedented challenges with supply chains—on a global level. Yes, it’s a global economy but we really need to invest in more Canadian products to remove our reliance on the foreign supplies. And this applies to many segments of business including packaging and supplies. I just can’t stress how important it is for all Canadians to reinvest in Canada’s economy and keep our dollars here.

McMullen: One thing that has confused me for a long time now is the lack of women in our industry. We have incredibly talented women on our executive team and throughout our workforce, and they are a huge reason we continue to grow and prosper. The majority of our customers are women, and I believe that it’s beneficial to be able to best relate to our customers

Trimarchi: An industry code of conduct. The good news is that this is something that is actively being worked on by the Federal Government. Our representatives at the Canadian Federation of Independent Grocers are ensuring our voice is being heard and I have hope that by the end of 2022 we have a positive outcome. The reason why we feel the code is needed is that the grocery landscape is so dominated by a few large organizations that when they impose their market dominance to make supplier demands, this has a trickle down impact on our costs as independents. We see it with merchant service fees and we see it in the cost of goods that we pay.

Sorenson: I guess the one area, which is critical, is recruitment and retention of employees. Selling retail groceries is demanding and we are only as good as our teams. We need good people with great attitudes and this is what we have today, we just need to recruit more.