['NEW', 'CHALLENGES', 'AND', 'CHANGES', 'FOR', 'THE', 'FUTURE', 'By', 'most', 'measures,', 'the', 'supermarket', 'industry', 'turned', 'in', 'a', 'styong', 'performance', 'in', '1995,', 'The', 'future', 'outlook,', 'however,', 'remains', 'uncertain', 'thanks', 'to', 'the', 'évér', 'present', "challenge'of", 'competition.', 'Competition', 'from', 'other', 'supermarkets,', 'new', 'formats', '(especia', 'ly', 'supercenters)', 'and', 'food-away-from-home', 'outlets', 'combined', 'to', 'hold', 'inflation-adjusted', '(or', 'real)', 'sales', 'in', 'the', 'industry', 'to', 'only', 'a', 'slight', 'gain', 'in', '1995.', 'Industrywide', 'sales', 'increased', 'by', '4.0', 'percent,', 'while', 'food-at-home', 'prices', 'jumped', '3.3', 'percent.', 'Same-store', 'sales', 'fell', 'slightly', 'in', 'inflation-adjusted', 'terms', 'as', 'the', 'overall', 'gain', '(2.9', 'percent)', 'fell', '0.4', 'percent', 'below', 'food', 'price', 'inflation.', 'Many', 'measures', 'of', 'industry', 'productivity', 'grew', 'in', 'both', 'current', 'and', 'inflation-adjusted', 'terms,', 'including', 'customer', 'transaction', 'size', 'and', 'sales', 'per', 'labor', 'hour.', 'Sales', 'per', 'square', 'foot', 'fell', 'slightly', 'in', 'real', 'terms,', 'but', 'that', 'might', 'be', 'a', 'function', 'of', 'the', 'continued', 'growth', 'in', 'store', 'size.', 'Most', 'importantly,', 'net', 'profit', 'hit', 'its', 'highest', 'level', 'in', 'nearly', 'a', 'decade,', 'a', 'sign', 'that', 'the', 'industry’s', 'tireless', 'work', 'on', 'improving', 'efficiency', 'may', 'well', 'be', 'paying', 'off.', 'Executives', 'are', 'optimistic', 'that', 'many', 'of', 'these', 'good', 'trends', 'will', 'continue', 'through', 'the', 'current', 'year,', 'with', 'a', 'strong', 'majority', '*', 'expecting', 'solid', 'sales', 'growth', 'for', 'their', 'companies.', 'Concerns', 'linger,', 'however,', 'over', 'the', 'ongoing', 'changes', 'in', 'consumer', 'shopping', 'behavior.', 'Shoppers', 'are', 'continuing', 'to', 'eat', 'out', 'or', 'take', 'out', 'food', 'from', 'restaurants', 'a', 'growing', 'percentage', 'of', 'the', 'time', 'and,', 'to', 'date,', 'supermarket', 'efforts', 'to', 'reverse', 'that', 'trend', 'have', 'been', 'only', 'marginally', 'successful.', 'Shoppers', 'still', 'find', 'supermarket', 'foodservice', 'lacking', 'in', 'critical', 'areas,', 'and', 'the', 'share', 'using', 'these', 'departments', 'fell', 'to', '12', 'percent', 'in', '1995.', 'Not', 'alt', 'the', 'news', 'is', 'bad,', 'however,', 'Shoppers', 'continue', 'to', 'rate', 'the', 'supermarket', 'they', 'shop', 'highly', 'with', '39', 'percent', 'giving', 'their', 'store', 'top', 'ratings', 'in', 'our', 'survey.', 'In', 'addition,', 'the', 'attributes', 'they', 'value', 'most', 'in', 'selecting', 'a', 'store', 'remain', 'the', 'hallmarks', 'of', 'the', 'industry.', 'However,', 'it', 'also', 'remains', 'clear', 'that', 'the', 'challenges', 'of', 'the', '1990s', 'will', 'not', 'be', 'easily', 'surmounted.', 'Although', 'new', 'technologies', 'are', 'readily', 'at', 'hand', 'to', 'aid', 'today’s', 'companies,', 'many', 'continue', 'to', 'struggle', 'to', 'master', 'them.', 'For', 'example,', 'category', 'management', 'remains', 'one', 'of', 'the', 'most', 'discussed', 'industry', 'efforts,', 'yet', 'nearly', 'half', 'of', 'those', 'surveyed', 'don’t', 'fully', 'understand', 'it.', 'Success', 'in', 'these', 'challenging', 'times', 'will', 'require', 'continued', 'excellence', 'in', 'all', 'the', 'areas', 'of', 'traditional', 'industry', 'strength,', 'from', 'distribution', 'to', 'cost', 'containment', 'to', 'customer', 'service.', 'And', 'it', 'will', 'require', 'more.', 'As', 'we', 'look', 'to', 'the', 'future', 'we', 'see', 'a', 'growing', 'need', 'for', 'the', 'industry', 'to:', '¢', 'Remain', 'as', 'vigilant', 'as', 'ever', 'in', 'governmental', 'affairs', 'to', 'ensure', 'that', 'legislators', 'and', 'regulators', 'alike', 'understand', 'the', 'impact', 'of', 'their', 'decisions', 'on', 'our', 'industry.', '*', 'Learn', 'to', 'master', 'new', 'theories', 'and', 'tools', 'like', 'category', 'management', 'and', 'data-based', 'marketing', 'so', 'that', 'we', 'can', 'serve', 'our', 'customers', 'better', 'than', 'ever', 'and', 'serve', 'our', 'best', 'customers', 'best', 'of', 'all.', '_', '¢', 'Stay', 'mindful', 'of', 'all', 'the', 'issues', 'of', 'importance', 'to', 'our', 'consumers,', 'from', 'crime', 'to', 'nutrition', 'to', 'convenience.', '*', 'Understand', 'that', 'our', 'business', 'is', 'continually', 'changing', 'and', 'that', 'today', 'our', 'competition', 'may', 'come', 'from', 'restaurants', 'and', 'foodservice', 'providers', 'as', 'much', 'as', 'from', 'other', 'supermarkets,', '*', 'Continually', 'educate', 'our', 'employees', 'to', 'ensure', 'that', 'they', 'can', 'properly', 'execute', 'the', 'strategies', 'for', 'stores', 'and', 'warehouses.', '«', 'Elevate', 'our', 'concern', 'about', 'food', 'safety', 'so', 'that', 'we', 'do', 'all', 'we', 'can', 'guarantee', 'that', 'our', 'consumers', 'can', 'always', 'rely', 'on', 'the', 'products', 'we', 'stock.', 'At', 'the', 'same', 'time,', 'let’s', 'remind', 'ourselves', 'that', 'ours', 'is', 'a', 'constantly', 'changing', 'business', 'with', 'constantly', 'changing', 'challenges.', 'Today', 'the', 'challenges', 'may', 'come', 'from', 'restaurants,', 'tomorrow', 'from', 'the', 'Internet.', 'The', 'strength', 'of', 'our', 'industry', 'has', 'always', 'rested', 'in', 'our', 'ability', 'to', 'meet', 'the', 'challenges', 'of', 'every', 'era', 'and', 'this', 'era', 'is', 'no', 'different.', 'Food', 'Marketing', 'Institute,', 'The', 'Food', 'Marketing', 'Industry', 'Speaks,', '1996', 'May', '6,', '1996,', 'Chicago,', 'IL', '2', 'APPENDIX', '1-2', ' ', 'C', 'T16@', 'T9STS', ' ']