Retail.

• Position: Industryoutlook - Panel Discussion - Industry Overview

FOR our second annual industry outlook with leaders in Utah's retail industry, attendees discussed issues including zoning, the definition of "value" and the blurring of definitions within retail.

Participants included Bob McIntyre, Idaho and Utah district manager with Walgreen Drug Stores: Ken Sanders of Ken Sanders Rare Books, a used and rare book shop; Rich Parkinson, president and CEO of Associated Food Stores; Bill Winegar, CFO of Winegar's grocery stores; Scott Hymas, CEO of R.C. Willey; Lane Beattie, president of the Salt Lake Chamber; Mike Call, president of Maverik Stores; Jake Boyer, with the Boyer Company and the manager member of The Gateway; Russ Neilson, market manager for 7-Eleven; Rachel Crump, general manager of the downtown Salt Lake Sears store; and Bob Hale, regional supervisor for King's Discount Stores and current president of the Utah Retail Merchants Association.

Special thanks to moderator Jim Olsen, executive vice president of the Utah Retail Merchants Association, for leading our discussion.

What are the most critical issues facing the retail industry today? Rich, you talk to retailers every day of your life. What are you hearing from particularly the independent retail grocery stores?

PARKINSON: There are probably two issues that we continually receive input about. One is the blurring of the channel lines, where more and more retailers are getting more and more alike. Traditionally you had grocery stores, drug stores and general merchandise-type stores, and now it seems like more and more entities are utilizing the same efforts to capture product. I think the second big consideration relates to people. Healthcare costs are a tremendous concern right now for our segment of the industry. How do we provide adequate insurance for our employees and still cover the estimated cost of those services?

HYMAS: Not only is there blurring between who is selling what, but there's also blurring of who is the retailer and who is the manufacturer. Coupled with that is the escalating cost of healthcare, but all insurance across the board has been tough the last little while and deflation of product combined with the increased costs are adding challenges for every retailer as well. You're having to sell more widgets, you know, two to three widgets compared to what you were five years ago for the same amount of money, but the cost associated with that has not gone down.

SANDERS: I can't speak to other industries, but in the rare book trade, I think the Internet has had a profound effect on the blurring between retailer, wholesaler and manufacturer. I don't think we fully understand what it's doing to any of our businesses or industries and I think that it's--speaking for books at least--had a profound impact in making a lot of material that used to be rare or difficult to obtain accessible by people directly without going through stores. You're seeing that in my industry--there are more and more booksellers in America today, but there are fewer and fewer retail open shops selling the product.

BOYER: One of the things that we're seeing is that we're kind of in a different retail sector. The higher-end department stores are starting to fail across the country. The May Company recently shut down 34 Lord & Taylor stores, and a lot of the larger department stores as we knew them are struggling financially, being beaten by stores like Target and Costco. So there's a lot of competition for the consumer's dollar, and people are finding a lot of the same products or the nicer products in a Costco as opposed to some of the traditional department stores, so I think we're seeing a shift in the retail dollar.

CRUMP: I'd have to agree, because I know that for us, one of our greatest struggles every day is finding the right mix of products, making sure that we have things to accommodate our customer who does want a little bit higher-end goods versus the customer who is looking every day at Target and Wal-Mart and seeing things at low prices, and finding the right mix that can also help us be profitable and stay open.

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"A lot of the larger department stores as we knew them are struggling financially, being beaten by stores like Target and Costco."

Jake Boyer

PARKINSON: But isn't that kind of a shift of consumer values, too? I think the generation coming up maybe has a different definition of 'value' or 'quality.' What we're seeing is even in apparel, in appearance, in grooming standards, what used to be not acceptable is now acceptable and [that definition of] quality has gone to a point of being 'good enough,' and I think that's causing some of the shift of shopping habits.

HALE: I think we really are a throwaway society now, and that goes with everything. If the clothes last long enough to get us through this season, we don't think about wearing them the next season. Everything is throwaway. We eat at fast-food places. We just go and eat and throw the containers away.

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PARKINSON: Well, think of bottled water. I mean, I feel...