National Grocers Association 2010-Year in Review-090910 by SupremeLord


									                                       A MessAGe FRoM youR ChAIRMAN
                                                      As one door closes, another door opens: a saying which proved
                                                      true in 2009/2010 as we ushered an old decade out and a
                                                      new one in. A similar transition in leadership transpired with
                                                      the National Grocers Association (N.G.A.). After 28 years of
                                                      dedication and leadership to the independent grocery industry,
                                                      President and CEO Tom Zaucha transitioned the organization
                                                      to Peter Larkin. Larkin is the former President and CEO of the
                                                      California Grocers Association (CGA). On behalf of the N.G.A.
                                                      Board of Directors we say welcome Peter!
                                                      Time and again, the independent grocers have been challenged
                                                      by doubters, regulators, mother nature and more. Yet as each
                                                      challenge is tossed at our industry, we fight back. The National
                                                      Grocers Association steps forward and tells our story – the story
                                                      of thousands of innovative retailers and their employees across
                                                      the country who strive every day to serve the communities in
                                                      which they live.
                                                      The independent grocers have a voice and the National Grocers
                                                      Association is here to get that voice and message heard.
                                                      Together this year, we advanced the cause of independent grocery
        retailers and wholesalers on many fronts – from regulation to legislation, from operational issues to food
        safety. One of the things I am most proud of is the way grocers from different states came together to speak
        with one voice and raise the profile of today’s independent community-focused retailer.
        In the following pages, you will learn what your Association accomplished in 2009/2010. I expect even
        greater success in 2011. If you are not an active N.G.A. member, I encourage you to get involved. Join an
        executive council; attend the annual convention and other networking events and conferences. Don’t just
        belong to N.G.A., be a part of your Association.
        If you are not a member, now is the time to join. Visit N.G.A.’s website, and view our
        membership materials. Find out why you need N.G.A. It is an investment well worth your consideration.

        Chris Coborn
        N.G.A. Chairman of the Board
        President and CEO of Coborn’s Inc.

                                                      tABle oF CoNteNts:
                              Letter from the Chairman .............................................................. 1
                              Who is N.G.A.? ............................................................................ 2
                              Who Do We Speak For? .................................................................. 2
                              What Do We Speak For? ................................................................. 2
                              Convention - Communicating the Value of Our Industry ...................... 6
                              Educational Conferences and Events ................................................ 9
                              Government Affairs - Strengthening the Independents Voice ..............11
                              Communications & Research – Connecting the Industry.................... 16
                              Industry Affairs - Supporting a Stronger Commitment to Service .........17
                              Operational Programs and Services - Increasing the Effectiveness .......21

1   ✹   2010 National Grocers Association Year In Review
                                          Who Is N.G.A.?

American consumers have benefited from the most diversified food distribution systems in the world, and
independent community-focused retailers and wholesalers have historically been the cornerstone of that
diversity; providing variety, selection, competitive prices and value for the American consumer. For 28 years,
the National Grocers Association (N.G.A.) has been the voice of independent community-focused retail and
wholesale grocers before Congress, the White House, regulatory agencies and the food industry as a whole.
N.G.A. is the only industry association devoted exclusively to the needs of the independent sector.

MIssIoN stAteMeNt
       To ensure independent, community-focused retailers and wholesalers the opportunity to succeed and
       better serve the consumer through its policies, advocacy, programs and services.

PhIlosoPhy stAteMeNt
       To promote diversity in the marketplace through a vibrant independent sector, and thereby increase
       consumer choice in price, variety, quality, service and value.

N.G.A.’s VAlues
         Association Value. Every key segment of the grocery industry deserves and will demand full
         representation and service. N.G.A. is the only industry association devoted exclusively to the needs
         of the independent sector.

        Independent Retailer Value. The existence of independent retailers is a central requirement of a
        competitive grocery market: independents are the major source of retailer innovation; they focus on
        their communities, their customers and their associates; they are the
        first to respond to the constantly changing needs of their diverse
        marketplaces; they preserve consumers’ options on product
        selection, prices, product quality, service levels and
        store formats.

        Wholesale Distributor Value. To
        succeed in today’s every-changing
        business environment, all retailers
        must achieve the necessary economies
        of scale to compete with the industry’s
        mega-companies and other classes of
        trade. For the majority of independents,
        parity is achieved through a vibrant
        wholesale distribution system that buys
        competitively, distributes efficiently,
        merchandizes creatively and provides
        the necessary services to help retailers

                                                                       2010 National Grocers Association Year In Review   ✹   2
                   Who Do We sPeAk FoR?                                          N.G.A. stAFF
                                                                             N.G.A. executive staff
        N.G.A. is the national trade association representing the
        retail and wholesale grocers that comprise the independent                  Peter J. larkin
        sector of the food distribution industry. Along with                       President and CEO
        affiliated associations, manufacturers, service suppliers
                                                                                   Frank DiPasquale
        as well as other entrepreneurial companies that support
                                                                              Executive Vice President and
        N.G.A.’s Philosophy and Mission.
                                                                               Executive Director of GREF
        The meaning of “independent retailer” is more a question
        of ownership and philosophy of operation, rather than                        tom Wenning
        number of stores or type of format. An independent retailer   Executive Vice President and General Counsel
        is a privately owned or controlled food retail company
        operating a variety of formats. A few members are publicly                  N.G.A. staff
        traded, but with controlling shares held by the family,
        and others are employee owned. Independents are the                        Anne C. Allnutt
        true “entrepreneurs” of the grocery/food industry and are            Graphics Production Manager
        dedicated to their customers, associates, and communities.                 Jennifer Brant
                                                                      Manager, Registration and Meeting Services
                                                                                    kristen Comley
                                                                      Executive Assistant to the President and CEO

                  WhAt Do We sPeAk FoR?                                            Janice Coon
                                                                           Membership & Database Manager
                                                                                  Michelle Cooper
        N.G.A.’s Working Agenda – 10 keys
                                                                                Administrative Assistant
               1. Effectively compete against supercenters and
                                                                                  Christine Cunnick
                   other power buyers.
                                                                              Director of Communications
               2. Repeal the estate tax.
                                                                                      Irene Dele
               3. Create a level playing field.                                    Sales Coordinator
               4. Reinvent the supermarket as a lifestyle
                                                                                    Debbie etter
                   destination center.
                                                                                Membership Coordinator
               5. Win back center store sales.
                                                                                      Greg Ferrara
               6. Recruit the next generation of quality managers
                                                                             Director of Government Affairs
                   and entrepreneurs.
               7. Retailers/Wholesalers must operate more as a                     Jessica harper
                   virtual chain.                                       Manager, Industry & Associate Member
               8. Take full advantage of all available technology.
               9. Create new synergies that achieve more                                su li
                   competitive economies of scale.                               Accounts Receivables
               10. Access to competitive growth capital.                             Perry Maison
                                                                                     Irene Pound
                                                                                   kim Robinson
                                                                                Administrative Assistant
                                                                                    karen Voorhies
                                                                              Director, Concept Show Floor
                                                                                      Mary Wallace
                                                                        Director of Education & Meeting Services

3   ✹   2010 National Grocers Association Year In Review
        NAtIoNAl GRoCeRs AssoCIAtIoN 2010 BoARD oF DIReCtoRs
                                           N.G.A. eXeCutIVe CoMMIttee oFFICeRs
     Chairman                         Immediate                        Vice                      Secretary/                    President
    of the Board                   Past Chairwoman                   Chairman                     Treasurer                    and CEO
christopher coBorn                 carole Bitter               Joseph sheriDan            richarD nieMann, Jr.             peter J. larKin
    Coborn’s, Inc.                     Friedman’s           Wakefern Food Corporation      Niemann Foods, Inc.             National Grocers
    St. Cloud, MN                     Freshmarkets                Keasbey, NJ                  Quincy, IL                    Association
                                        Butler, PA                                                                          Arlington, VA

                                                 eXeCutIVe CoMMIttee MeMBeRs
       neal BeruBe                            roger collins                     nicholas D’agostino, iii                 Kevin Doris
  Associated Food Stores, Inc.            Harp’s Food Stores, Inc.        D’Agostino Supermarkets, Inc.               Gerland’s Food Fair
     Salt Lake City, UT                       Springdale, AR                        Larchmont, NY                         Houston, TX

                                                            BoARD MeMBeRs
Martin arter                     larry collins               Dave Jones                   JaMes nilsson, Jr.           eDwarD roche
Affiliated Foods Midwest         Collins Family Markets      Kellogg USA, Inc.            Geissler’s Supermarkets, Inc. Roche Brothers
Norfolk, NE                      Philadelphia, PA            Battle Creek, MI             East Windsor, CT               Supermarkets
                                                                                                                        Wellesley, MA
Michael Bourgoine                JaMes Denges                Kathy Kuzava                 gerarD norKus
Associated Grocers of            CEO, President              Georgia Food Industry        Norkus Enterprises, Inc.     JaMes rogers
 New England                     Central Grocers, Inc.        Association                 Pt. Pleasant Beach, NJ       Food Ind. Alliance of
Manchester, NH                   Joliet, IL                  Smyrna, GA                                                 New York State
                                                                                          JacK porter
                                                                                                                       Albany, NY
Michael Bozzuto                  Jerry garlanD               george lanKforD              Kehe Distributors, Inc.
Bozzuto’s, Inc.                  Associated Wholesale        Affiliated Foods, Inc.       Romeoville, IL               van sapp
Chestire, CT                      Grocers                    Amarillo, TX                                              PepsiCo, Inc.
                                 Kansas City, KS
                                                                                          Michael provenzano, sr.
                                                                                                                       Purchase, NY
christopher Brown                                            Jay lawrence                 Pro Ranch Markets
Nash Finch Company               Janel haugarth              Lawrence Brothers            Ontario, CA                  trygve solBerg
Minneapolis, MN                  SUPERVALU, Inc.             Sweetwater, TX                                            T.A. Solberg Company, Inc.
                                 Minneapolis, MN                                          Barry Queen                  Minocqua, WI
JaMes Brown                                                  roBert ling, Jr.             Queen’s Stores/Price
Doc’s Food Stores, Inc.          eric hench                  Unified Grocers               Chopper                     Dean sonnenBerg
Bixby, OK                        Chief Supermarket, Inc.     Commerce, CA                 Paola, KS                    URM Stores, Inc.
                                 Defiance, OH                                                                          Spokane, WA
Jerry Brown                                                  roger lowe, Jr.              ron rehKopf
Unilever                         Kenneth huBBarD             Lowe’s Supermarkets          Rehkopf’s Enterprises,       Michael stone
Trumbull, CT                     Western Supermarkets,       Littlefield, TX               Inc.                        Mollie Stone’s Markets
                                  Inc.                                                    Texarkana, TX                Mill Valley, CA
JaMes Buchanan                                               cal Miller
                                 Birmingham, AL
Laurel Grocery                                               Associated Grocers of        JaMes rieD                   DonalD weiss
 Company, LLC                    Dean Janeway                 Florida                     Olean Wholesale Grocery WiseWay SuperCenters
London, KY                       Key Food Stores             Pompano Beach, FL             Cooperative            Merrillville, IN
                                   Cooperative                                            Olean, NY
Juvenal chavez, sr.              Staten Island, NY
Mi Pueblo Food Center
San Jose, CA
                                                           ex-officio Members
       MarK Batenic                        Joseph h. caMpBell, Jr.                thoMas haggai                        Dean Janeway
          IGA, Inc.                       Associated Grocers, Inc.                     IGA, Inc.                   Wakefern Food Corporation
         Chicago, IL                         Baton Rouge, LA                          Chicago, IL                         Keasbey, NJ

                                 Michael neeDler               charles pilliter             steven c. sMith
                                   Fresh Encounter           Trader Joe’s Company        K-VA-T Food Stores, Inc.
                                     Findlay, OH                 Monrovia, CA                 Abingdon, VA

                                                                                           2010 National Grocers Association Year In Review    ✹   4
                                              N.G.A. AuXIllARy GRouPs
WoMeN GRoCeRs oF AMeRICA                                     eXeCutIVe CouNCIl MeetINGs
Women Grocers of America                                     N.G.A. members have the opportunity to participate in
(WGA) serves as an                                           one of the executive or advisory councils set up as part
information and advisory                                     of the N.G.A. Strategic Plan. These councils are charged
arm to the National Grocers                                  with the task of identifying and communicating to the
Association. WGA supports                                    N.G.A. Board of Directors the needs of their respective
and encourages the education of students pursuing a          constituency and ensuring that N.G.A. satisfies those
career in the grocery industry through its Mary Macey        needs. Councils include:
Scholarship program; supports and recognizes retail/            • Wholesaler Executive Council;
                                      wholesale women           • Single Store Executive Council;
                                      in the industry
                                                                • Community-Based Retailer Executive Council;
                                      through its annual
                                      Woman of the Year         • Regional Retailer Executive Council;
                                      award; encourages         • State Association Executive Council;
                                      all segments of           • Food Industry University Coalition;
                                      the food industry         • Human Resource Executive Council;
                                      to promote breast
                                                                • Legal Task Force;
                                      cancer awareness
                                      and prevention;           • Government Relations Leadership Council;
WGA lifetime Achievement Award and participates in              • The Health and Wellness Leadership Council; and
Presentation                          and supports the          • Supplier Advisory Council.
(Left to Right) Denise Beckman,
WGA President presents Mildred        programs offered
Steward of Affiliated Foods Midwest   by the National
the WGA Lifetime Achievement          Grocers Association.   FooD INDustRy uNIVeRsIty CoAlItIoN
Award at the 2010 N.G.A. Annual
Convention along with Martin Arter,   Membership in WGA      In 2004, with guidance and support from the National
President and CEO of Affiliated Foods is open to any woman   Grocers Association, the Food Industry University
Midwest.                              affiliated with a      Coalition was formed when representatives from 9 food
                                      retail, wholesale,     and retailing industry university programs met. Today,
manufacturing/ service supplier company or state/local       the FIUC includes members from 14 university programs
association that maintains membership in the National        who meeting semi-annually to advance a collaborative
Grocers Association.                                         agenda of industry focused academics and research.
                                                             Its mission is to leverage the combined wealth of its
                                                             member’s intellectual capital, strategic perspective and
AsPARAGus CluB                                               third party status to provide thought leadership for the
The Asparagus Club was founded                               food industry in dealing with its most challenging issues.
in 1909 to generate a spirit of                                 • University of Alabama
cooperation and fellowship among                                • Arizona State University
members of the grocery industry. The
                                                                • California Polytechnic State University
club feels that there is no better way
to ensure a healthy future for the                              • Cornell University
grocery industry than by ensuring a                             • Florida A & M University
constant stream of talented young                               • University of Florida
people who want to make a career in this fascinating and        • Louisiana State University
ever-changing business, particularly in the independent
                                                                • Michigan State University
retail and wholesale sector. Since 1990, the Asparagus
Club Scholarship Program has provided over $850,000             • Western Michigan University
in scholarships to students preparing for careers in            • University of Minnesota
the grocery industry. In just the past five years, the          • Oklahoma State University
Asparagus Club awarded over $100,000 to young men and           • Portland State University
women who have set out on the road to careers in the            • St. Joseph’s University
                                                                • Texas Tech University

5   ✹   2010 National Grocers Association Year In Review
                         CoMMuNICAtING the VAlue oF ouR INDustRy
Thanks to the support and dedication of N.G.A. members, the 2010 National Grocers Association
Annual Convention and Supermarket Synergy Showcase, February 9-12, 2010 at the Paris Las
Vegas Hotel, was the best Annual Convention we have ever had. We are proud to report that
the numbers for this convention went up in every category, most noticeably in attendance and
revenue. These results are truly an achievement during these challenging economic times and
a testament to the strength and vitality of the independent grocery sector and N.G.A. This
convention was also very special as we honored the career of Tom Zaucha who had served as
N.G.A.’s distinguished President and CEO since the founding of our great Association in 1982.
                              CoNVeNtIoN hIGhlIGhts

opening keynote session - Former President                  Co-Chief Executive
George W. Bush                                              Officer of Grocery
                                                            Outlets and
The political and                                           Frank DiPasquale,
economic events                                             Executive Vice
of 2009 marked a                                            President of the
fundamental and                                             National Grocers
unpredicted change                                          Association. The
for our country. In                                                              Wednesday’s Panelist discuss consumers
                                                            group discussed      and what makes their companies different
the Opening Keynote                                         a number of key      within their marketplace.
Session, Former          Former President George W. Bush
                         addresses the attendees at the     findings from the
President George         Opening Keynote Session.           just released 2010 N.G.A. Consumer Panel Survey, as well
W. Bush discussed                                           as the need for retailers to spend time talking with their
how he responded to the numerous challenges he faced        consumers and not allowing the federal government to
while in office, based on the basis of core principles      tell them what decisions to make.
he has held throughout his years of public service, and
that have guided America since its founding: Freedom,
Opportunity, Responsibility and Compassion. Former          thursday General session - General Pace:
N.G.A. President and CEO Tom Zaucha then moderated a        We All Answer to someone: leadership up
one on one discussion with President Bush on a variety      and Down
of topics from security home and abroad, the economy,
jobs and more. President Bush said his prescription for                       Retired General Peter Pace, USMC,
healing the economy would be to cut taxes for small                           former head of the Joint Chiefs of
businesses “like so many of you grocers, to make sure                         Staff under President George W. Bush,
the people who create jobs have money to expand their                         said grocery store operators are doing
business.”                                                                    their part to ensure the security of the
                                                                              United States by keeping the economy
                                                                              going. At the Thursday General Session,
Wednesday General session - Marketplace                                       Pace said, “We couldn’t have a free
leadership and Innovation: Companies that                                     nation without a good, strong military,
                                                            Retired General
Make a Difference                                           Peter Pace, USMC and we couldn’t have a good strong
Phil Lempert, the SupermarketGuru, led a lively panel
                                                            addresses the     military without a strong economy.
                                                            attendees.        Your businesses provide livelihoods
discussion with award winning retailers who have
successfully made a difference in their marketplace.                          and sustenance in so many ways for
The panelist included: Jeff Brown, President and CEO of     so many people, and I know how much those of us who
Browns Family Shoprite; Joe Sheridan, Executive Vice        defend this nation appreciate what all of you do for the
President of the Wakefern Corporation; MacGregor Read,      economy and for providing support to the armed forces.”

                                                                         2010 National Grocers Association Year In Review   ✹   6
N.G.A.’s dynamic workshops are designed to link cutting edge educational sessions with participants of the S3 Concept
Show Floor. The 2010 educational program was developed with the determination to present attendees with the most
innovative information available to reinforce their knowledge and promote the growth of their businesses. From health
and wellness to taking advantage of the latest technology. This year’s educational program featured more than 35
                                                   workshops focused on how members could excel in the marketplace
                                                   by better controlling costs, increasing sales, and enhancing customer
                                                   In addition to the concurrent workshops held over two days, every
                                                   morning started with a Super Breakfast Session. This provided
                                                   attendees the chance to listen to well known, industry experts on
                                                   topics that could affect their bottom line. This year Harold Lloyd
                                                   entertained a packed crowd dressed up as Batman, while discussing
                                                   ways to raise your deli and bakery sales. Another crowd favorite
                                                   was Art Turock and his session on self-management, coaching and
                                                   developing employees. Closing out the convention was Dr. Richard
 Harold Lloyd, aka. Batman, entertained and        George of Saint Joseph’s University and his session on the mature
 educated a packed session of attendees on         millennial and their attitudes towards food retailing.
 increasing their deli and bakery sales.
                                                   In conjunction with Financial Management Solutions (FMS), N.G.A.
presented the Financial Management Symposium, this value-added one day program consisted of a variety of issues
relevant to the day-in and day-out management of a retail grocery store. Topics included: benchmarking your company;
controlling costs; buying and selling in today’s economic environment; changes and updates in the 2009 tax code;
using technology to communicate with the next generation of shoppers; and asset protection.

s3 CoNCePt shoW FlooR
The 2010 Supermarket Synergy Showcase (S3) Concept Show Floor opened to record attendance at the N.G.A. Annual
Convention at the Paris Las Vegas Hotel. The show provided retailers, wholesalers, manufacturers and service suppliers
an opportunity to exchange ideas with trading partners in the grocery industry and provided attendees an opportunity
to watch and participate in live demonstrations, sample a large selection of new products and talk directly with the
The S3 Concept Show Floor also
offered both participants and
attendees the opportunity to
participate in Specialty Areas
located conveniently on the
show floor and developed
to enhance our efforts to
entertain, educate and expand
our food demonstration
program, while offering
sampling of quality foods to
our attendees. These areas
included industry chefs cooking
exciting entrees from their       The 2010 S3 Concept Show Floor.
product lines, food tasting
areas that included a variety
of menu items provided by N.G.A. member CPG companies, and specialty briefings where S3 participants had the
opportunity to speak and / or share service related information with show floor attendees. Chef Philippe Parola was
also featured again this year as he presented live interactive cooking demonstrations on both days of the show.

7   ✹   2010 National Grocers Association Year In Review
                                               sPeCIAl eVeNts
• President's Dinner and Gala                               • N.G.A. Best Bagger National Championship
This year’s President Dinner and Gala while always a        This is a year long, nationwide program in
memorable event, took on a special meaning as it was        which the best of the best grocery baggers
dedicated to our outgoing President and CEO, Tom            in the country compete for the great prizes
Zaucha. A pioneer for independent community focused         and the title of “America’s Best Bagger”.
retailers and wholesalers in the United States, Mr.         Contestants are judged on speed, bag
Zaucha’s 28 years of service with N.G.A., and over 40       building technique, weight distribution between bags
years within the food industry will have lasting effects    and style, attitude and appearance.
on the industry and ensured his legacy will remain strong
and steadfast. The legendary Paul Anka, took the stage
performing hit songs like “Diana’”, “Lonely Boy”, and
“Put Your Head on My Shoulder.” Anka also performed the
Frank Sinatra’s signature song, “My Way” followed by a
new rendition dedicated and written specifically for Tom

                                                            Kyle Perry of Martin’s Super Markets in Osceola, Indiana is the
                                                            winner of the 2010 Best Bagger National Championship. As the
                                                            winner, Perry takes home “bagging rights” as well as the $10,000
                                                            grand prize, the coveted “Golden Grocery Bag” trophy and the
                                                            Pan-Oston “Best Bagger Golden Lane” for the organization.

Paul Anka entertains the crowd.                             • Developing the Next Generation of leaders
• store tours                                               N.G.A.’s University Student Intern Program is a unique
                                                            program that exposes college students who are pursuing
Las Vegas has scores of competing
                                                            degrees in the food marketing field to the grocery
supermarkets, from specialty and
                                                            industry and gives them a first-hand look into the
ethnic groceries to upscale gourmet
                                                            preparation that goes into producing the general sessions
and conventional stores. Attendees
                                                            and workshops integral to the Convention’s success. This
had the opportunity to visit a variety of these retail
                                                            year the program had 55 students from eleven different
formats during the store tours of the Las Vegas market.
                                                            universities. Students served as workshop moderators,
Stores included Greenland Supermarket, Glazier Food
                                                            participated and presented in workshops, toured the
Marketplace, Sunflower Farmers Market, Cardenas Market
                                                            concept show floor with N.G.A. members (mentors) as
and The Butcher Block.
                                                            well as attended trading partner business sessions, store
                                                            tours and council meetings with their mentors.
• Grocers Awards Reception
The Grocers Awards Reception featured     CREOIC E
the winners of the N.G.A. Creative         C H      E                                             Curt Cullison, Director,
Choice Awards and Progressive Grocers                                                             Independent Sales of
                                                                                                  SUPERVALU INC. Corporate
Outstanding Independents Awards.            AWARDS                                                West and Joseph Della
The Creative Choice Awards is a retailer                                                          Noce, Executive Vice
contest that highlights the “Best of the                                                          President, of SUPERVALU
                                                                                                  INC. Eastern Region
Best” in grocery merchandising and advertising and the                                            spend time talking to two
Outstanding Independents Awards honors an outstanding                                             University Interns on the
wholesaler, regional retailer and community-based                                                 S3 Concept Show Floor.
retailers for the year.

                                                                         2010 National Grocers Association Year In Review   ✹   8
                                eDuCAtIoNAl CoNFeReNCes AND eVeNts
N.G.A. executive Management Conference                        the Food Institute Webinars
This conference provides an opportunity for all segments      As an N.G.A. member, you are able to enjoy
of the food industry to meet on a number of industry and      a discounted rate in attending webinars
trade relations and regulatory issues, as well as executive   hosted by the Food Institute. The Food
council meetings. Held each September, the Executive          Institute has webinars on topics such
Management Conference offers a comprehensive                  as food labeling, food safety, merger
educational agenda which features top executives,             & acquisition activity, marketing and
industry experts, and key government officials. Executive     advertising of food products, and much
council and committee meetings are held to discuss the        more. Each session is presented by a panel of industry
individual needs of their respective constituency and         experts including government, retailers, CPG, service
what N.G.A. can do to meet those needs. This conference       suppliers, and the academic community.
also features senior-level Trading Partner Business
Sessions and Store Tours.
                                                              N.G.A. Retail Manager Advancement Program
Industry Fly-In “A Day In Washington”
                                                              The N.G.A. Retail Manager Advancement Program (R-
Retailers, wholesalers and state association executives       MAP) held in March 2010, was developed to assist in the
from around the country participated in the March 2010,       training of the future leaders within your organization
“A Day in Washington”, sponsored by N.G.A., FMI and           as well as update the skills of seasoned veterans
FIAE. This event provided executives the opportunity          within the grocery industry. This interactive three-
to meet with their Representatives and Senators to            day program provided attendees with a broad range of
discuss healthcare, Employee Free Choice Act, Estate Tax,     tools to leverage their organization for future success
credit card interchange fees, LIFO repeal and more. Jim       in an increasingly competitive environment. After
VandeHei, the executive director and co-founder               years of assessing the needs of the grocery industry,
of the POLITICO, provided attendees with his 2010             N.G.A. and the University Food Industry Coalition
Congressional election perspective. Senator Jon Kyl (R-       created a educational program that covered topics such
AZ), Senate Republican Whip also addressed attendees on       as: marketing and customer service strategy; basic
the Estate Tax issue.                                         accounting; finance, and store operations; employee
                                                              coaching and leadership; personality typing; customer
                                                              behavior and expectations; integrated marketing
                                                              communications; and supplier and retailer negotiation.

                                                              N.G.A.’s Center for Family-owned Business
                                                              The mission of the Grocers Research and Education
                                                              Foundation (GREF) Center for Family-Owned Business
                                                              is to provide a professional and interactive program for
                                                              the industry aimed at teaching the operators of family
                                                              retail and wholesale food businesses how to solve
                                                              the crucial practical problems of: strategic business
                                                              planning; improving leadership style and interpersonal
                                                              effectiveness; succession planning and human resource/
N.G.A. members meeting with Nebraska Congressman.
                                                              organizational effectiveness; estate planning; developing
                                                              a will; provide an ongoing entrepreneurial “think tank”
                                                              that retailers, manufacturers and suppliers can utilize
                                                              for input and feedback and to provide a network for the
                                                              family-owned business. This intense three-day program
                                                              developed in partnership with Louisiana State University
                                                              engages attendees to discover how to safeguard their
                                                              business, protect their wealth and preserve family

9   ✹   2010 National Grocers Association Year In Review
                          eDuCAtIoNAl CoNFeReNCes AND eVeNts
N.G.A. executive leadership Development                    Grocers Research and education Foundation
Program                                                    and online training Programs
With over 200 graduates from 75+ companies from all        In 1992, N.G.A. formed the Grocers Research and
across the country and the Bahamas, N.G.A. is helping      Education Foundation (GREF) as a nonprofit organization.
association members to prepare the next generation of      Through industry research and educational programs, the
senior executives to lead the industry into the future.    Foundation serves the
The N.G.A. Executive Leadership Development Program        industry by improving
held each June at Cornell University helps retailers       productivity in all key
and wholesalers develop leaders from within their          areas of operations
organizations who can respond to business challenges in    through sharing
the 21st century marketplace. This program, generously     information, education,
sponsored by PepsiCo, provides attendees with the          and research to N.G.A.
knowledge, tools, resources and inspiration necessary      members as well as the industry as a whole. GREF is
to lead their companies and drive them to long-term        comprised of eight educational centers that address
success. It is a high-impact learning opportunity          industry-specific operational needs. This year N.G.A. and
encompassing intense, interactive instruction presented    Online Training Technologies (OTT) developed a number
by a mix of respected academic and industry leaders.       of specialized compliance and job skills development
The program is attended by those rising grocery industry   programs to provide the highest quality and the most
executives who have been identified for expanded           cost-effective online training available. These engaging
leadership and strategic planning responsibilities.        courses and powerful administrative tools provide the
                                                           most innovative training programs that target all levels
                                                           of employees.

                                                           epstein, Becker & Green, llC seminars/
                                                           N.G.A.’s outside labor counsel, Epstein, Becker & Green,
                                                           LLC holds a number of seminar and webinars throughout
                                                           the year that
                                                           N.G.A. members
                                                           can attend.
                                                           This year such
2010 Executive Leadership Development Program attendees    events included
                                                           topics on employment and labor issues (classification of
                                                           employees, wage and hour laws, independent contract
                                                           status, and payment of wages); the Employee Free Choice
                                                           Act, and healthcare. Some events N.G.A. and Epstein,
                                                           Becker & Green held included:
                                                             • A Proactive Approach to the Employee Free Choice
                                                             • A Year of Investigation and Enforcement - An
                                                               Overview of What Retailers Could Expect in 2010
                                                               Regarding Employment and Labor Issues
                                                             • Employers Under Siege: Managing Your Workforce in
                                                               Unprecedented Times.
                                                             • Healthcare Reform: What It Means for Your Company
                                                               and Employees.

                                                                      2010 National Grocers Association Year In Review   ✹   10
                                                   GoVeRNMeNt AFFAIRs
                                    stReNGtheNING the INDePeNDeNts VoICe
No matter the issue, N.G.A. is a trusted, essential partner for its members. N.G.A. listens and responds to members’
needs, effectively working on their behalf in shaping public policy. Independent grocers and wholesalers rely on N.G.A.
to be their collective voice on legislative and regulatory issues. For years, N.G.A. has been regarded as a respected
advocate, representing independent grocers’ and wholesalers interests in Washington, DC.
N.G.A. actively monitors a wide array of issues that concern grocers, keeping members informed as well as providing
perspective, analysis and recommendations. Members can count on N.G.A. to help develop practical, workable
solutions when local, state and federal regulation and legislation create hardships.


INteRChANGe Fees                                                  N.G.A. produced a complete summary of the immediate
N.G.A. and Merchants score Major Victory                          and future changes for members. It is available for
                                                                  download at
with Passage of Interchange Reform
                                                                  The success of this
legislation                                                       campaign was made
Five years ago                                                    possible through the
N.G.A., along                                                     assertive lobbying efforts
with similar                                                      by N.G.A., members of
merchant                                                          the Merchant Payments
organizations,                                                    Coalition, and most
began to                                                          importantly the grassroots
aggressively                                                      outreach from N.G.A.
educate                                                           member retailers,
Members of                                                        wholesalers, and state
Congress on                                                       associations. Thousands
the impact      Senator Dick Durbin (D-IL) and Peter Larkin,      of letters were sent to
excessive       N.G.A. President and CEO.                         Members of Congress
credit and                                                        via the eGrocers Action       N.G.A. Politico Advertisement
debit card                                                        Network (eGAN) from
interchange fees and anticompetitive operating rules              retailers and their employees, often followed with phone
have on merchants and consumers. In July, merchants               calls to Members of Congress urging support. A number
scored a major victory when Congress took the first step          of N.G.A. members were instrumental in swaying votes in
toward reform of interchange fees with the passage                favor of the interchange legislation with personal calls
of the Dodd-Frank Wall Street Reform and Consumer                 and notes to their Representatives and Senators.
Protection Act. In Title X, the language added by Senator         In addition to the grassroots support, with the financial
Durbin (passed in the Senate with a bipartisan vote of            contributions made to N.G.A.’s Campaign to Preserve
64 to 33), addresses debit interchange fees by giving the         Competition, Consumer Choice, and a Democratic
Federal Reserve power to ensure fees are “reasonable and          Workplace, N.G.A. was able to dedicate significant
proportional” to the cost. Additionally, card associations        resources to running two-full page ads in the Capitol Hill
were prohibited from mandating that issuing banks                 newspaper, Politico, raising awareness to the issue and
require debit cards to exclusively transact on specific           N.G.A.’s position.
networks. These reforms will take effect after the Federal
                                                                  This important legislative victory is only the first step
Reserve engages in a 9 month rule-making process. The
                                                                  in the complete reform of the interchange system.
reformed operating rules also now allow merchants to:
                                                                  However it’s an important first step and N.G.A. members
     • offer a discount to consumers based on their               should be proud of their efforts to enact this historic
         payment method (i.e. cash or check); and                 change. Equally as important will be the Federal Reserve
     • set a transaction minimum for credit card                  rulemaking process to assure that the intent of Senator
         transactions of up to $10.00.                            Durbin’s amendment is reflected in the final regulations.

11   ✹   2010 National Grocers Association Year In Review
                                         GoVeRNMeNt AFFAIRs
eMPloyMeNt/lABoR Issues                                     opposed the legislation that now prohibits the use of
organized labor Again Fails to Pass Job                     HRA or health FSA funds from being used on over-the-
                                                            counter-drugs (effective January 1, 2011) and limiting
killing employee Free Choice Act (eFCA)                     the amount of contributions to flexible spending
This past year, N.G.A. has made stopping Organized          accounts for medical expenses to $2,500 a year (effective
Labor’s number one legislative issue, passage of the        January 1, 2013).
Employee Free Choice Act (EFCA), our top priority. Due      N.G.A. and other business organizations were successful
to strong opposition by N.G.A. and a large contingent       in achieving a 90-day waiting period before new
of similar organizations, coupled with strong grassroots    employees must be enrolled in to an employer’s health
action by N.G.A. members, support for EFCA in Congress      program. This delay was important for the supermarket
continues to fade. At this time, Democrats do not have      industry, which experiences high turnover, especially
the votes to overcome a 60-vote threshold in the Senate,    among part-time workers and also often hires additional
particularly during its mid-term election year. However,    staff during peak holiday periods. N.G.A. member
many proponents led by Senate Health, Education,            retailers and wholesalers were in Washington and on
Labor, and Pensions (HELP) Committee Chairman, Tom          Capitol Hill March 17 and 18 during the peak of the
Harkin (D-IA) continue to make public comments that         healthcare debate to raise concerns over the impact
EFCA is far from dead. Chairman Harkin has suggested        many of the new mandates and taxes.
that Democrats will push through EFCA during the lame
duck session this fall. While it’s virtually certain that
EFCA in its current form will not pass, there remains the   tAXes
chance that certain provisions of EFCA could be moved       N.G.A. Fights to Protect Family-owned
separately. As a member of the steering committee of the    Business from estate tax
500 member Coalition for a Democrat Workplace (CDW),
which has led efforts to defeat EFCA in Congress, N.G.A.    N.G.A. sent a letter to the House and Senate calling
remains committed to ensuring the defeat of EFCA (in all    on Congress to put aside partisan politics and pass
forms).                                                     estate tax relief. Lack of congressional action to
                                                            permanently fix the estate tax has placed a significant
                                                            and unacceptable burden on family-owned businesses.
heAlthCARe                                                  Without congressional action the estate tax reverts
Democrats Force through healthcare                          back to a top rate of 55% and with only a maximum
legislation using Procedural tactic; N.G.A.                 exemption level of $1 million. N.G.A. has worked
                                                            aggressively to urge Members of Congress, and in
helps Pass 90-Day Waiting Period for New                    particular Senators to support compromise language
enrollments                                                 by Senators Jon Kyl (R-AZ) and Blanche Lincoln (D-AR)
On March 23, 2010 President Obama signed the Patient        to set the estate tax at a $5 million exemption ($10
Protection and Affordable Care Act into law enacting        million per couple) indexed to inflation with a top rate
sweeping healthcare legislation that includes new           of 35%. The Lincoln-Kyl proposal successfully passed the
employer mandates and tax increases on small businesses     Senate in spring 2009 as part of the FY 2010 budget with
as well as numerous changes to health plan requirements.    N.G.A.’s support, but was stripped out by Democrats in
Unable to garner enough votes in the Senate to pass         the House.
the bill outright and further complicated by the death      Numerous meetings have been conducted to build
of Senator Kennedy (D-MA), Democrats used a budget          support for the Lincoln-Kyl compromise and a grassroots
procedure known as “reconciliation” to pass the bill.       campaign is ongoing to bring pressure to bear on
Reconciliation is narrowly focused, but only requires a     Congress. Full repeal of the estate tax remains a top goal
majority vote to pass in the Senate, therefore preventing   of N.G.A., but recognizes that the current political and
Republicans from blocking passage by filibustering.         economic environments prevent full repeal at this time.
N.G.A. opposed the House and Senate bills due to the tax    Absent full repeal, N.G.A. continues to bring grassroots
increases on businesses, especially those that operate      pressure to bear on Members of Congress and Senators to
as Subchapter S Corporations or pass through entities.      pass the Lincoln-Kyl estate tax relief compromise.
Additionally, N.G.A. opposed employer mandates in
particular over the application of employer mandates
with respect to part-time employees. N.G.A. also

                                                                       2010 National Grocers Association Year In Review   ✹   12
                                                   GoVeRNMeNt AFFAIRs
N.G.A. Calls on Congress to Repeal New 1099                  efforts to Repeal lIFo Blocked for the
Reporting Mandate                                            second Consecutive year
N.G.A. wrote to members of the Senate and U.S. House         For the second consecutive year, President Obama has
of Representatives in September 2010, calling on             called for a full repeal of the accounting method: Last
Congress to repeal section 9006 of the Patient Protection    In, First Out (LIFO), and a requirement for companies to
and Affordable Care Act. The provision, little noticed       “write up” their LIFO reserves. N.G.A., along with member
when enacted, forces companies to file reports to the        retailers and wholesalers, have worked to educate
IRS for purchases from corporate vendors that total          Members of Congress, in particular those on the Ways and
more than $600 in a tax year, starting in 2012. A            Means and Senate Finance Committees, on the significant
number of proposals have been introduced including an        negative impact repeal of LIFO would have on N.G.A.
Amendment by Senator Johanns (R-NE) which repeals            member businesses. To date there has been no action in
the 1099 reporting requirement. Senator Bill Nelson          Congress thus far to repeal LIFO, although repeal of LIFO
(D-FL) has proposed a plan that would not repeal the         and a taxing of LIFO reserves is an attractive target for
1099 tax compliance requirement, but instead would           Congressional Committees looking to plug the massive
exempt businesses with fewer than 25 employees and           national debt. N.G.A. is a steering committee member of
would raise the reporting threshold for the remaining        the LIFO Coalition and continues to work with a diverse
companies from $600 to $5,000. N.G.A. does not support       group of businesses and associations to protect LIFO
that proposal as it would still subject the majority         from repeal.
of N.G.A.’s member retailers and wholesalers to the
mandate. N.G.A. supports full repeal of the expanded
1099 reporting mandate and has urged Congress to fix         heAlthy FooD FINANCING INItIAtIVe
this onerous reporting requirement. The 1099 reporting       N.G.A. supports Federal Funding to Create
requirement is burdensome and will unnecessarily             Nationwide Program; helps Develop local
increase administrative cost for businesses, in particular   and state Programs
to smaller companies, which often lack administrative
staff and would be disproportionately affected.              Many Americans live in underserved communities without
                                                             sufficient access to a wide variety of foods that are
                                                             sold by supermarkets and other food retailers. One in
N.G.A. supports and tells senate to Pass                     every six Americans, that is 48.4 million people, live in
small Business Jobs Act with Business tax                    low-income communities that are more than half a mile
Incentives                                                   from the nearest large grocery store. Over 100 studies
                                                             conducted within the past decade have shown that lack
N.G.A. urged Senators to support and vote for the Small      of access to healthy foods is a challenge in many low
Business Jobs Act, which the Senate is expected to           income urban and rural communities. N.G.A. has worked
consider in the fall of 2010, after failing to pass the      to build bipartisan support for a federal healthy food
measure in July. The bill creates a $30 billion small        financing initiative (HFFI), modeled after the successful
business lending pool for small banks with assets            Pennsylvania Fresh Food Financing Initiative to address
under $1 billion, while also providing $12 billion in tax    the problem of food deserts. President Obama included
incentives. Additionally, the bill includes a provision to   a recommendation for $345 million in funding in his
extend bonus depreciation tax incentives through the         FY 2011 budget request split between three federal
end of 2010. The bonus depreciation provision would          agencies: Department of Agriculture, Department
allow businesses to recover up to 50 percent of the costs    of Health and Human Services, and the Treasury.
of certain capital expenditures for equipment placed         Additionally a number of bills are being drafted to
into service during 2010. The legislation also would         address the national problem of food deserts, including a
allow taxpayers to expense up to $500,000 in capital         proposal by Senator Kristen Gillibrand (D-NY) and Allyson
expenditures in tax years 2010 and 2011—double the           Schwartz (D-PA) to create a national program aimed at
current limit for 2010. The provision would also raise the   helping bring fresh foods to underserved areas, which
threshold for when the higher expensing limits phase         N.G.A. supports. The successful programs in Pennsylvania
out to $2 million, up from the current 2010 level of         have been possible because of the commitment of
$800,000. Both of these provisions will be beneficial to     independent operators to the communities they serve.
N.G.A. member businesses.                                    Independent operators will continue to be uniquely
                                                             positioned to help grow similar programs across the

13   ✹   2010 National Grocers Association Year In Review
                                               GoVeRNMeNt AFFAIRs
nation with the support of similar community fresh food
At the state and local level N.G.A. is coordinating
efforts with stakeholders to develop opportunities for
independent retailers as additional healthy food financing
initiatives launch in other states and localities. In New
Orleans, funding is expected to be released in early Fall
with independent operators expected to lead efforts to
bring new stores to underserved areas, many which still
                                                                              eGrocers Action Network
remain void of fresh food stores since Hurricane Katrina.
Additionally, projects are in the planning or early                           (eGAN)
development stages in a number of other states including                      This year N.G.A. launched the
California, Mississippi, Tennessee, and Georgia with other                    eGrocers Action Network (eGAN),
states being targeted for future action.                                      giving N.G.A. members the
                                                                              ability to contact their Members
                                                                              of Congress on critical industry
                                                                              issues such as Interchange
                                                                              Fees, LIFO repeal, Estate Tax
                                                                              and recent healthcare reform
                                                                              initiatives, in as little as 90
                                                                              seconds! eGAN allows you to
                                                                              speak up and give voice to our
                                                                              messages and representing a
                                                                              grassroots strength that is a
                                                                              powerful force on Capitol Hill
N.G.A. member, Jeff Brown of Brown’s Superstore’s, Inc. testified             and across the country. Taking
in April 2010, before the U.S. House Agriculture Subcommittee
on Department Operations, Oversight, Nutrition, and Forestry on               action is simple and makes a
the issue of food deserts and the success he and other retailers              difference!
have had in addressing food deserts through the Pennsylvania
Fresh Food Financing Initiative. In addition, Jeff urged the
Committee to support a national program to address food deserts
based on the Pennsylvania model.


INteRChANGe                                                         the best possible relief and benefit to merchants. N.G.A.
                                                                    and other merchants associations will strongly urge the
Federal Reserve Rulemaking Begins for Debit
                                                                    Federal Reserve to follow the spirit of the law and issue
Interchange Reforms                                                 regulations that do not include extra costs. Additionally,
N.G.A. is preparing to represent member retailers on                the law does allow for an issuer to petition the Federal
proposed rules to be developed by the Federal Reserve               Reserve for adjusted debit interchange revenue if the
in response to new debit interchange fee provisions                 issuer can show that an allowance is necessary to cover
enacted by the Durbin Amendment to the Dodd-Frank                   costs incurred in preventing fraud in relation to debit
Wall Street Reform and Consumer Protection Act. The                 transactions. The Federal Reserve must take into account
rulemaking process must be completed within 9 months                fraud related reimbursements the issuer already receives
of enactment of the legislation. N.G.A. will be very                (i.e. charge-backs).
engaged in the process to ensure the final rules provide

                                                                               2010 National Grocers Association Year In Review   ✹   14
                                                   GoVeRNMeNt AFFAIRs
WIC eBt                                                      poultry products. Labeling of ground products with
N.G.A. Works on Development and Future                       “percent lean” and “percent fat” was proposed as
                                                             optional. For the 45 most commonly consumed major
Implementations of WIC eBt                                   cuts of fresh meat and poultry products, the nutrient
The WIC Program (the Special Supplemental Nutrition          content would have to be listed on the package or
Program for Women, Infants, and Children) received           posted at the point of purchase, such as on a poster or
a significant shot in the arm in 2009 when Congress          brochure.
appropriated $100 million for planning, development          Since 2001, N.G.A. has filed numerous comments and
and implementation of WIC EBT (electronic benefit            attended a number of meetings with the USDA and the
transfer) and upgrades to technology needed for eWIC.        Office of Management and Budget (OMB), expressing
An additional $60 million was appropriated by Congress       our support for voluntary guidelines over the proposed
in the course of FY 2010 budget appropriations. To date      USDA mandates that would disproportionately affect the
USDA Food and Nutritition Services (FNS) has awarded         custom service meat department that many independent
$40 million to state WIC agencies through a competitive      retailers use as a point of differentiation versus pre-
grant process. This influx of money has allowed the          packed case ready meat. In comments filed in February
WIC EBT program to grow rapidly. To date, fewer than         2010, N.G.A. expressed concern to the USDA over
twenty WIC EBT programs have been approved for federal       labeling each package of ground meat and poultry and
funding and are in varying stages of the planning            urged the USDA to provide the industry with a ground
and implementation process. N.G.A. supports uniform          meat calculator so the industry could create nutritional
standards across all states and WIC agencies for both        information. Additionally, N.G.A. has requested that
online and smartcard technologies.                           USDA delay the implementation of the rule for 18 months
N.G.A. has been active as part of an industry working        to allow the industry and USDA time to enact the new
group to develop a set of operating standards and            requirements.
technology standards for both online and smart card.
These standards are expected to be finalized by the end
of 2010 and will provide new WIC EBT state agencies          “We CARD” PRoGRAM
with a blueprint to follow when implementing new EBT         N.G.A. urges FDA to Approve “We Card” As An
projects. Additionally, N.G.A. is working with the USDA      Approved tobacco training Program
Food and Nutrition Services on the development of a          In October 2009 N.G.A. filed comments with the FDA
new UPC database that will serve as a national repository    regarding the Family Smoking
for WIC agency approved items, commonly referred to          Prevention and Tobacco and
as an Approved Product List (APL). N.G.A. supports the       Control Act. N.G.A. urged the FDA
legislative language included in the House and Senate        to recognize and authorize the
WIC reauthorization and remains committed to ensuring        “We Card” program as an approved
a level playing field for independent operators, including   educational training program under
insisting that state agencies include representatives from   the new law. The FDA was directed
the independent grocery retail community in that state       under the new law to develop
from day one of the planning process. N.G.A. remains         standards for approved training
technology neutral with regards to online/smartcard.         programs for retailers and their
                                                             employees. N.G.A. member retailers
                                                             have long used and invested in the “We Card” program,
NutRItIoNAl lABelING Rules                                   therefore inclusion of “We Card” as an approved training
N.G.A. Raises Concerns with usDA over Meat                   program is of great importance to N.G.A. members. The
Nutritional labeling Rules; Request Delay in                 FDA has yet to release final regulations regarding training
enactment of Regulations                                     programs.
On December 18 2009, USDA released its rule for meat
nutritional labeling for 60 days of public comment
before finalizing the rule for implementation. The
original proposed rule would require nutrition labeling
information on the package of all ground meat and

15   ✹   2010 National Grocers Association Year In Review
                                       CoNNeCtING the INDustRy

Newsletters and Member updates                             Independent Grocers Network
Members receive all N.G.A. newsletters and                 N.G.A. has partnered with Progressive Grocer to create
communications free of charge. These timely updates are    the Independent Grocer, a exclusive, members-only online
designed to keep N.G.A. members informed on the most       community where independent grocers can develop,
current information and activities taking place both in    share, and discuss issues, strategies, and information
the association and the industry. These newsletters and    critical to their operations, as well as directly connect
reports include:                                           with their most valuable information resource - each
                                                           other. N.G.A. will be actively involved in promoting and
  • Express Lane, N.G.A.’s weekly newsletter
                                                           updating this site to its members and will use this site to
  • Capitol Alert, N.G.A.’s bi-weekly Government Affairs   regularly communicate with its various councils.
  • Congressional and Regulatory Updates
  • Employee and Labor Relations Newsletters
  • Food Recalls
  • Counterfeit Coupon Alerts
  • Action Alerts                                          N.G.A. Members only Website
  • Legal Updates                                          N.G.A. members have access to a secure member’s only
  • Across State Lines                                     section on the N.G.A website, where various tools,
                                                           resources and information such as Grocers Research
  • Press Releases
                                                           and Education Foundation (GREF), Employment Audit
                                                           Checklist, A Strategic Plan for EFCA, Senate and House
                                                           Member contact lists, a labor relations law hotline to
                                                           N.G.A.’s labor law firm, Epstein, Becker, & Green, eGrocers
                                                           Action Network and many more are available.

                                                           NGATV is a feature on our website that
                                                           provides video podcasts on timely
                                                           and relevant issues affecting today’s
                                                           independent retailers and wholesalers.
                                                           NGATV provides a vehicle to more
                                                           thoroughly explore the pressing issues
                                                           and advance when warranted, N.G.A.’s point of view.
                                                           Videos are not only produced by N.G.A. but also many
                                                           are contributed by preferred partners such as Pan-Oston,
                                                 , the SupermarketGuru and more.

                                                                      2010 National Grocers Association Year In Review   ✹   16
                                                      INDustRy AFFAIRs

                      suPPoRtING A stRoNGeR CoMMItMeNt to seRVICe
Understanding what is on the horizon is exceedingly important in protecting a strong, vibrant industry that offers
opportunity for innovation. By monitoring trends and issues, N.G.A. is proactive in identifying opportunities and
averting or minimizing potential problems. We gather information and knowledge about these issues and, when
appropriate, lead an effort with our key partners from government and business to address them.

                  PAyMeNt CARD INDustRy DAtA seCuRIty stANDARD (PCI Dss)
The Payment Card Industry Security Standards Council           Acquirers can start fining merchants anytime after the
(PCI SSC) is the global, open industry standards body          July 2010 deadline. Fees and fines can be administered
that provides management of the Payment Card Industry          not only if there is a breach but simply if a merchant
Data Security Standard (PCI DSS) and other requirements.       uses never approved PIN-entry devices.
PCI compliance is a continuous process that requires           N.G.A. has been actively monitoring the PCI Council’s
constant vigilance and an ongoing investment. However          actions throughout the year, as we believe that the
these commitments are minor when compared to the               current PCI requirements do not always benefit our
substantial, and potentially devastating, economic             membership, the merchant community or consumers; but
and reputational risks of a data breach or other major         rather the card brands. Currently retailers are paying the
compliance violation. Throughout the year, N.G.A. has          cost for development, deployment, compliance and any
urged the membership to implement PCI compliance               data breaches while operating under standards developed
and worked to educate retailers on alternatives to             by the PCI Council. More than four years after PCI
meet compliance, such as tokenization, and end-to-end          compliance requirements were first placed on businesses,
encryption.                                                    there remains a serious lack of understanding regarding
Retailers who implement a thorough, proactive approach         the risks of noncompliance— including industry fines,
will reduce the scope of PCI compliance and be able            reputation damage, and even uncertainty of business
to focus on key business objectives such as cash flow,         survival—and the commitment required to implement
profitability, and customer service. The PCI Security          and maintain an adequate PCI compliance program.
Standards Council is set to release their next revision of                                 N.G.A. has been working
the Payment Card Industry Data Security Standard (PCI                                      with other merchant trade
DSS) 2.0, in October, which will contain clarifications but                                associations in discussing
no major changes to the standard.                                                          ways to engage the PCI
As of July 2010, U.S. merchants must have meet                                             Council in a collaborative
three different mandates required by VISA to stay in                                       effort; identifying different
compliance.                                                                                challenges our members
                                                                                           are having regarding PCI
     • All never approved payment devices on which PIN
                                                                                           compliance, and looking
         debit transactions are conducted must be removed
                                                                                           for alternatives to meet
         from service. This includes any device that is not
                                                                                           compliance, such as
         either VISA PED or PCI PED;
                                                                                           tokenization, and end-to-end
     • All debit card PINs must be encrypted in TDES from                                  encryption.
         the payment device; and
     • All applications that "store, process, or transmit
         cardholder information" must be PA-DSS or PABP

17   ✹   2010 National Grocers Association Year In Review
                                             INDustRy AFFAIRs
             PRoDuCe tRACeABIlIty INItIAtIVe (PtI) steeRING CoMMIttee
The Produce Traceability Initiative (PTI) is an industry wide effort aimed at creating a traceability process that will
enable the quick and efficient electronic tracking and tracing of produce cases between supply chain members. PTI
is designed to help the industry maximize the effectiveness of current traceback procedures, while developing a
standardized industry approach to enhance the speed and efficiency of traceability systems for the future.
As a founding member of the PTI Steering Committee, N.G.A. works with the other 50 members that hail from across
the supply chain; grower, packer/shipper, retailer, distributor and foodservice, to develop a real-world plan and
timeline based on what was achievable within each company, to ensure the plan was reasonable and attainable.
The Produce Traceability Initiative’s (PTI) action plan outlines steps for achieving traceability at the case level by
2012 via best practices guidelines based on GS1 global databar standards for supply chain management and product
identification. The milestones were identified during an eight-month planning process by the companies of the PTI
Steering Committee.
❏ Milestone No. 1: obtain company prefix                  ✓
                                                          ❏ Milestone No. 5: encode information for machine-
    (completed by Q1 2009)                                     readable case bar codes (completed by Q3 2010)
    Requirement that each “brand owner” obtain a               Concurrently, product packers should be ready to encode
    unique GS1-issued company prefix that provides             the GTIN and lot number in a GS1-128 bar code, which
    for a unique product ID from each company.                 can be accurately scanned and recorded by buyers and
    The company prefix will then become part of all            receivers. The human-readable information should appear
    GTINs assigned to cases of produce from that               directly below or above the bar code.
    company, and immediately serve to identify the
    brand owner’s products throughout the supply
                                                          ❏ Milestone No. 6: Read and store information on
                                                               inbound cases (complete in 2011)
                                                               All buyers, receivers and subsequent handlers of cases
❏ Milestone No. 2: Assign 14-digit GtINs to                    should have systems in place to read bar codes and
    every case configuration packed (completed                 electronically store the GTIN and lot number from each
    by Q1 2009)                                                case of produce received.
    Brand owners must then assign specific 14-digit       ❏ Milestone No. 7: Read and store information on
    GTINs to all of their various case configurations,        outbound cases (complete in 2012)
    based on the combination of their company
                                                               All buyers, receivers and subsequent handlers of cases
    prefix and a reference number.
                                                               should have systems in place to read and store the
❏ Milestone No. 3: Provide GtIN information to                 GTIN and lot number for all outbound cases of produce.
    buyers (completed by Q3 2009)                              This final step provides complete information on when
    After determining the GTINs of their own                   the product left the facility, thus completing electronic
    case configurations, brand owners must                     connectivity of case data across the total supply chain.
    then communicate this information and                 When the milestones are implemented, companies will not
    corresponding data to their buyers for                only have the ability to efficiently track product within their
    scanability at the receiver location.                 own operation, but will also give governmental agencies the
                                                          needed process to track product up and down the produce
❏ Milestone No. 4: Brand owners place GtIN and            supply chain in an efficient and expeditious manner, thereby
    lot numbers on case labels in human-readable          helping to reduce the impact of future product recalls.
    form (completed by Q3 2010)
                                                          Additional information on each of the seven milestones,
    All product packers should be ready to print or       as well as related Q&As and resources, is available at www.
    affix human-readable information specifying the You can find a list of companies that
    GTIN and lot number on every case of produce          have endorsed the Produce Traceability Initiative (PTI) as of
    shipped, both of which should be shown                April 2010 at
    together on at least one side of the carton so        pti/index.cfm
    that buyers and receivers can quickly read the

                                                                           2010 National Grocers Association Year In Review   ✹   18
                                                      INDustRy AFFAIRs
                        Gs1 DAtABAR                            sunrise date. 88% of the membership was aware of
                                                               the plans to replace the UPC A and 128 symbols with
                                                               the GS1 DataBar and about 85% were aware of the
On January 1, 2008 a new coupon barcode format, the            implementation deadline for the change in coupons.
GS1 DataBar, was introduced. That move introduced the
                                                               However, 49% of those surveyed were not ready for
“Interim” DataBar coupon code, whereby manufacturers
                                                               GS1 DataBar only coupons. Only 27% had POS scanning
are producing coupons including both the UPC-A code
                                                               equipment that was ready to scan the DataBar; 16% had
and the GS1 DataBar. According to the current industry
                                                               POS software that could process the DataBar and only 7%
time table, by January 1, 2011 manufacturers will
                                                               had POS transaction logs and downstream applications
migrate from using both the UPC/EAN and GS1 DataBar
                                                               ready to process the DataBar.
coupon prefixes to only the GS1 Databar on coupons.
Retailers will need to be able to process the DataBar on       27% of retailers surveyed said that they were ready now
point-of-sale hardware and software. January 2014 is           to begin scanning the new DataBar on coupons. 35% said
set as a global implementation target (Sunrise Date) for       they would be ready between June 2010 and December
GS1 DataBar. At this time manufacturers of fresh foods,        2010. But the majority, 38%, said they would not be
produce, consumer packaged goods and pharmaceuticals           ready by the January 2011 date. Of those respondents,
should begin to use the new GS1 DataBar on their               over 75% did not know when they would be ready. The
products.                                                      remaining 25% indicated they would be DataBar-ready in
                                                               a range of dates between 2011 and 2012.

DataBar Readiness
                                                               N.G.A. and the Joint Industry Coupon
Now is the time for retailers to start assessing where
they are in terms of GS1 DataBar readiness and what
their next steps should be by setting up a complete GS1        In the beginning of February 2009, just prior to the
DataBar project. With the new GS1 DataBar, retailers will      N.G.A. Annual Convention, senior executives from
benefit from improved scan rates, increased checkout           both N.G.A’s Supplier Advisory Council and Wholesale
speed and automatic expiration date checking.                  Executive Council met with representatives from GS1 US
To help with the transition, GS1 US has created a              to dialogue on the challenges retailers faced with the
Starter Kit which provides retailers with the tools and        implementation of the new GS1 DataBar.
information they need for a successful adoption of the         The meeting, combined with industry information
GS1 DataBar. Topics such as selecting program leaders,         collected by the Joint Industry Coupon Committee (JICC)
supplier & vendor management, planning for private             indicating that retailers would not have the necessary
label products, preparations for changes in applications,      equipment and POS software in place in time for the
and training personnel are covered. If you would like to       original deadline, resulted in the formal recommendation
access the toolkit or for further information on the GS1       to the industry of a delay in the implementation timeline
DataBar, you can visit the GS1 US website at http://www.       to January 2011.                                      The JICC is comprised of manufacturers and retailers
                                                               along with N.G.A. and other leading industry trade
suRVey Results                                                 associations, GMA, FMI and NACS, who work to increase
                                                               efficiency and effectiveness in the development,
N.G.A. undertook an online survey in April
                                                               distribution and redemption of coupons.
2010 with a short questionnaire to better
understand our members’ readiness to
the industry’s direction regarding the Gs1
Out of all the respondents, over 51% were Single Store
Operators. The second largest group (27%) were retailers
with between 2-10 stores. Rounding out the rest of
the members were those retailers with 11-25 stores,
11%, and retailer with 25+ stores were at 10%. These
demographics reflect current N.G.A. membership ratios.
Overall, awareness is high for the upcoming GS1 DataBar
19   ✹   2010 National Grocers Association Year In Review
                                             INDustRy AFFAIRs

            FRAuDuleNt CouPoNs                                 sIGIs AND Auto-suBstANtIAtIoN At
                                                                       the PoINt-oF-sAle
In the past year, N.G.A. has received numerous comments
and questions from members regarding counterfeit and
                                                              The health care reform legislation signed into law by
fraudulent coupons from the internet (print-at-home
                                                              the President in May impacts over the counter (OTC)
coupons) being used in their stores. With the economic
                                                              purchases with Health Care Flexible Spending Accounts,
downturn, coupon circulation and redemption has never
                                                              Health Reimbursement Arrangements and Health Savings
been higher. N.G.A. undertook a survey of members and
                                                              Accounts beginning in January of 2011. OTC drugs
found it was a large problem affecting a significant part
                                                              and medicines will remain eligible with a note from a
of the retail membership.
                                                              provider. SIGIS is in the process of updating the Eligible
With coupons appearing on the internet (use up                products criteria to reflect the change of these items
17% over last year) and the rapid advancement of              from the “Eligible” to “Dual Purpose” category. NOTE:
technology, manufacturers, retailers and marketers are        Because these items now require a doctor’s directive,
being challenged to meet their customers’ coupon needs        these items can no longer be auto-substantiated with an
through new media and mobile devices. Coupon fraud,           IIAS. The customer may be able to receive reimbursement
counterfeiting, and illegal sales/auctions of coupons are     for the item using their Health FSA, HRA or HSA; however
large concerns for coupon professionals and the industry      they must obtain a letter of medical necessity from their
at large.                                                     doctor in order to be able to submit it as eligible under
N.G.A. is a sponsoring organization of the Joint Industry     their plan.
Coupon Committee along with GMA, FMI, NACDS, and              This has significant implications for SIGIS as an
GSI US. With the JICC and organizations like the Coupon       organization. Over-the-counter medicines, drugs and
Information Corporation (CIC) and the Association             biological treatments are about 35 percent of the current
of Coupon Professionals (ACP), N.G.A. Staff attends           SIGIS list. Effective January 1st, 2011, the affected
meetings where they are briefed on the latest methods of      items would be deleted from the list of eligible items.
fraud, current initiatives in place to counter and combat     It is important to note that not all items on the SIGIS
fraud and counterfeiting, and the increase of programs to     eligible items list would be affected. Only those items
educate industry professionals and the general public.        that represent drugs, medicines and biologicals require
After the first Coupon Summit hosted by the CIC, N.G.A.       a provider’s directive;
began issuing Coupon Alerts regarding fraudulent or           you can see the full list
counterfeit internet coupons found in the marketplace.        at The
When coupons are identified, N.G.A. sends out an              change will also impact
electronic PSA to members, complete with offer                90 percent merchants,
description, pictures of the identified coupon, and           in that the calculation
information on what to do with said coupons. Also             for who meets the
included in the alert is a link to the N.G.A. website where   90 percent exception
members can download a free poster, “Tips to Assist in        would be based on
Recognizing Legitimate Internet Coupons” to help their        the new definition of
employees to spot counterfeit or fraudulent coupons that      eligible expenses, which
they may come across in their stores.                         will exclude products
N.G.A. continues our participation on JICC to work            in the above categories
with Association of Coupon Professional and Coupon            because they are only
Information Center on revising the Coupon Guidelines,         eligible to the extent
a publication due out next year, and to combat the            the provider directs
proliferation of counterfeit and fraudulent coupons.          their use.

                                                                         2010 National Grocers Association Year In Review   ✹   20
                                 oPeRAtIoNAl PRoGRAMs AND seRVICes

                                         INCReAsING the eFFeCtIVeNess
N.G.A. has teamed up with a number of companies and organizations to provide our members with the tools, resources
and expertise to gain better command of their profit optimization opportunities.

N.G.A. Payment Processing Program – special                      The goal of the
Member only Pricing                                              Utopia Across
                                                                 America tour is
Developed in cooperation with over 40,000 current                to provide access
grocers, N.G.A. and First Data offer a valuable payment          to the latest
services program with                                            technology from
unprecedented discounts,                                         MEI, Pan-Oston,
innovative technology                                            Microsoft, Dell,
and improved payment products and services for                   CED, Rockwell        Inside the mobile Innovation Center,
supermarkets. Members enjoy discounts on N.G.A.                  Automation,          Pan-Oston shows off their latest front-
Payment Processing programs such as Prepaid Reloadable           MTX EPS and          end technology at the prospective
Card Programs, TeleCheck Internet and Telephone                                       customers store.
                                                                 others. The
Acceptance Services, Payroll & Disbursement Solutions            traveling Innovation Centers feature: the Utopia Self-
and Data Encryption and Tokenization. Our special                Checkout an affordable PCI supportive solution that
program includes the solutions needed to help attract            is easily integrated to 99% of available POS systems;
customers and grow sales.                                        innovative cash handling technology; and assistive
                                                                 listening devices; as well as ergonomic checkout lanes
N.G.A. and Pan-oston: Grocery Checkout For                       and revolutionary counter systems.
Any size store And Budget                                        Also on board are two never-before-offered tools
                                                                 developed by Pan-Oston: the Self-Checkout Cost
In 2009, N.G.A. established an exclusive partnership             Savings Calculator, which provides independent
program with Pan-Oston, leaders in grocery checkout              grocers with a means to evaluate self-checkout cost
and store fixture manufacturers for over 40 years and            savings based on their particular operating objectives;
creators of Utopia self-checkout stands/system. In this          and the Front-End Optimizer, an aid to determine the
partnership N.G.A. members are pre-approved to receive           most cost efficient and productive check out solution
member benefits such as economy pricing, discounts               based on sales, staffing, wages and customer service.
on a variety of Pan-Oston products,
                                                                 Visit to learn more
including checkout lanes, food service
                                                                 and schedule a visit today.
equipment, service parts, and
accessories. They also are
eligible to upgraded technology                               FMs Retailer toolbox
and support services on all Pan-Oston retail checkout and
                                                              For over 30 years, Financial
display products inclusive of the patent pending Utopia
                                                              Management Solutions (FMS)
self-checkout solution.
                                                              has helped retail grocers and
     N.G.A. utopia Across America tour                        independent supermarkets succeed
     Committed to helping the independent grocer succeed      by transforming historic accounting
                        in a competitive marketplace,         and financial activities into timely, accurate decision
                        N.G.A. and Pan-Oston developed        support tools. FMS has complied a variety of resources
                        two state-of-the-art mobile           reflecting best practices for the independent retail
                        Innovation Centers to showcase        grocery and supermarket industry. The FMS Retailer
                        the latest in front-end technology.   Toolbox includes downloadable information on industry
                        The Utopia Across America Tour        best practices including: Dot Book; DSD receiving;
                       kicked off on April 26 at the N.G.A.   front end pricing, and retail pricing. N.G.A. members
     headquarters and traveled throughout the U.S.,           also enjoy discounts on services by FMS, Inc. such as
     making stops at the corporate offices and stores of      accounting and payroll outsourcing, financial software
     independent grocers across the United States.            applications and services, treasury management, payroll/
                                                              human resources applications.

21   ✹   2010 National Grocers Association Year In Review
                          oPeRAtIoNAl PRoGRAMs AND seRVICes
N.G.A. surveys and Publications                             Sessions with an improved format! Trading Partners was
                                                            held on the Concept Show Floor, at the heart of the
Members are provided the                                    N.G.A. Convention. Also new were the Trading Partner
opportunity to receive the                                  Business Suites. Each Trading Partner had a private space
information and tools needed                                on the Show Floor. The meetings were also extended over
to make timely and accurate                                 a two day period, meaning there was time to attend more
business decisions in today’s                               meetings, without missing out on exceptional Convention
marketplace.                                                events and sessions. Participation was the largest in the
  • 2010 N.G.A. Consumer                                    history of the event.
     Panel Survey
  • N.G.A./FMS 2010                                         Campaign to Preserve Competition and
     Independent Grocers Survey is a financial and          Consumer Choice
     operational review of the independent retail grocery
     industry. A great benchmarking tool.                   Independent retailers and wholesalers play critical roles
                                                            in preserving a competitive, diversified marketplace
  • Supermarket Store Management Compensation and           that greatly benefits the American consumer. Preserving
     Benefits Survey is designed to assist N.G.A. members   a level playing field where independent grocers can
     in benchmarking their compensation and benefits        thrive creates the best environment for consumers,
     practices with other similar size companies in the     communities and the grocery industry as a whole. The
     grocery industry.                                      Campaign to Preserve Competition and Consumer Choice
                                                            is independently funded by private donations from
                                                            individuals, corporations and organizations who are
N.G.A. Resource Catalog                                     actively engaged in preserving a level playing field in the
The N.G.A. Resource Catalog was created through the         marketplace.
Grocers Research and Education Foundation (GREF)
which serves the industry by providing innovative           Grocers Care
research and educational services that enable industry
companies to improve efficiency and capitalize on           America’s Grocers have a long history of being committed
growth opportunities. The Resource Catalog offers a large   to their country, especially during challenging times.
selection of products to meet your needs in the areas of    This is best exemplified
consumer relations; employee health and safety; food        through N.G.A.’s Grocers Care
safety and sanitation; human resource management and        program. While grocers do
employment law; loss control and prevention; marketing      their part throughout the year
and merchandising; and training and development.            each Memorial Day, N.G.A. in
N.G.A. has taken special care to select products that are   partnership with the White House
high quality, cost-efficient and specific to the grocery    Commission on Remembrance
industry. The resource catalog is available to everyone     honor those who have made the ultimate sacrifice by
however N.G.A. members receive discounted pricing.          supporting the National Moment of Remembrance.
                                                            N.G.A. member stores and their communities take the
                                                            opportunity to show their commitment to America’s
trading Partner Business sessions                           fallen soldiers and the families of the fallen.
Trading Partner Business Sessions is a senior, executive-
level program where retailers and wholesalers meet          N.G.A. Grocery supplies and services Guide
with suppliers to discuss mutual business opportunities,
strategies and goals. N.G.A. provides a professional        In August 2010, N.G.A. was excited to announce the
setting to meet with target customers and other             release of our brand new online resource, the N.G.A.
potential trading partners. It is a by-invitation           Grocery Supplies and Services Guide. The guide features
program, exclusive to N.G.A. members. Trading               a wide range of products and services exclusively for
Partner Business Sessions takes place in February at        the grocery retail and wholesale industry that will assist
the Annual Convention in Las Vegas and at the Fall          users in purchasing decisions year-round.
Executive Management Conference. For the 2010 Annual
Convention, N.G.A hosted Trading Partner Business

                                                                       2010 National Grocers Association Year In Review   ✹   22
2011 National Grocers Association Annual Convention
      and supermarket synergy showcase (s3)
           February 13-16, 2011
            at the Mirage hotel and Casino
                  las Vegas, Nevada

                      National Grocers Association
        1005 N. Glebe Road, suite 250, Arlington, Virginia 22201
              (703) 516-0700 •

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