It includes concrete recommendations for distributors on how to respond to changes in the independent marketplace, according to IFDA.
Developed in partnership with Technomic Inc., the study provides quantitative research based upon input from 442 independent operators, qualitative research with 46 independent operators that participated in a multi-day moderated bulletin board discussion and in-depth one-on-one interviews with independent operators.
Today, independents are facing extreme business stresses given the simultaneous rapid rise in costs, drop in consumer demand and confidence, increase in regulation and legislative scrutiny, and intensification of competition for the consumer food dollar. Even though independents are generally more agile in adapting their menus and marketing efforts to meet changing market demands, the current environment clearly seems to favor chains, which have the advantage of buying and marketing muscle, efficient sourcing practices, financial wherewithal and other cost advantages.
While independents have proven resilient during past recessions, it does appear that their numbers, composition, profit structure and operating practices may change dramatically. This includes an increased focus on more efficient operations, better asset utilization and cost management, enhancing the customer experience (through better service, menu adaptation and strategic pricing), and further leveraging their status as “local” businesses—all having implications for distributors. It is with this in mind that IFDA partnered with Technomic on the report, which provides a major strategic assessment of the current situation and future prospects for independent operators in all major industry segments.
In Technomic’s view, according to IFDA, independents will be challenged to grow but will take share from FSR and selected LSR chain segments. Though the study does not project any major shift in sourcing practices, it does conclude that distributors who offer real value with respect to cost saving and/or margin enhancement solutions will be in an ideal position to improve penetration as independents increasingly rely on outside resources.
For more information on the independent operator study, visit www.ifdaonline.org.