Produce prices are high, business is competitive and independent retailers are prospering in the Kansas City area, according to local industry leaders.
Scott Danner, chief operating officer of Liberty Fruit Co. Inc. in Kansas City, KS, said, "The last few years have been a great time for independents. The great mega-chains are so focused on margin that they are not that focused on doing sells. I believe the future of the independents is bright. In Kansas City, [consumers] take care of your neighbor-type store and they really support independents here. Walmart has not strangled this market for a reason. People have a better feel going into [independent] stores because the same person for 10 or 15 years has been there."
Mr. Danner said Jan. 25, "The feel here with retailers is that they are still kind of trying to give a value proposition to get the customers in and keep them here." The independents seek to maintain a steady business through giving "more of a value proposition."
Local independent retailers increasingly will offer a deal on a smaller apple if that apple has quality, he said, noting that the independents' attitude is " 'If there is a value, let's offer it.' "
For example, an independent chain might regularly offer a 9-size cantaloupe, "but if there is a value on a 12 or 15, they say, 'Let's do it,' " Mr. Danner said. "They show the customer, 'We have a deal and here it is for you.' " Liberty Fruit's retail customers "more and more" indicate " 'We need a deal,' " he said, adding that the independents will break traditional merchandising patterns to present a good value.
Keith Connell, owner of Keith Connell Inc. in Stillwell, KS, said Jan. 25, "Everybody is doing pretty well in town." Thus, "not much is going on" in the way of power shifts. He said that retailers are "struggling with prices and that is causing business to be a little slower. As cold as it has been here, that hasn't helped either. I think we're off a little bit from last year in the Kansas City area, but that is to be expected with the way the economy is and prices are."
David Haun, owner of the Merriam, KS-based Haun Potato Co., said Jan. 22 that in the potato business, the Kansas City market is like "about every other major terminal." There is a large volume of high-quality potatoes moving at very low prices. Mr. Haun credited local retailers with "doing a good job of promoting potatoes every week we are in this storage thing. They are doing as good of a job as anyone in promoting potatoes."
Local retailers "are all competitive on potatoes, so I can't see anyone doing better than anyone else," Mr. Haun said. In his local market, he said, "I don't see any real changes in the produce business. Everybody that is handling produce in this town is battling. I don't see big shifts in market shares."
Mr. Haun added that in terms of judging business flow, local restaurants are "harder to … gauge. A year or a year-and-a-half ago, the restaurant business took a pretty good hit. It is still building back. The generality is that what is coming back the quickest is the lower-priced type of restaurants." The economy is restricting the rebound of Kansas City's higher-tier dining establishments.
Mr. Danner agreed that Kansas City's foodservice industry has bottomed out, and has started to rebound. But, he cautioned, "We are nowhere near where we were before the economic downturn. There is a better feel going on now. What happened, happened -- and the engine is starting to roll again."
(For more on Kansas City, see the Feb. 8, 2010, issue of The Produce News.)