Progressive Grocer Independent

JUN 2016

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22 | Progressive Grocer Independent | June 2016 Data Security Data protection/security came in second in top concerns, with nearly 58 percent of independent retailers citing it as a worry. EMV compliance is now into its eighth month, and the transi- tion has been anything but smooth, especially in relation to certifcation. Suspected fraud has led to charge- backs to retailers on non-EMV bank cards, and FMI is currently working with criminal investigators on some of the larger instances, Sarasin says. NGA's Larkin notes that many independents have invested thousands of dollars on equipment, such as new card terminals or POS systems, to meet the EMV compliance date, "only to be left waiting on a massive backlog in the certifcation process, which is controlled by the card networks." Even though the equipment is in place, retailers are still on the hook for charge- backs, simply because they're not certifed or fully EMV compliant. In March, B&R Su- permarket, which operates four Mi- lam's Market stores and one Grove Liquor store in the Miami area, sued various credit card issuers over the issue of EMV certifcation. Te grocer installed new EMV- enabled card readers and informed the credit card consortium that the stores were ready to be certifed. Te certifca- tion never came, how- ever, and B&R's lawsuit alleges that the delay is a tactic used by the credit card compa- nies to keep the burden of fraud on retailers for as long as possible. B&R notes that while waiting for certifca- tion, it has incurred up to $10,000 in liability for fraud, chargebacks and chargeback fees in the four months between the EMV compliance date and the fling of the lawsuit. "While very large retailers such as Target, Walmart and others quickly had their EMV-processing systems 'certifed' — thus sparing them the liability shift — the members of Class are at the mercy of the defendants [credit card issuers]," the complaint asserts. "Merchants like Milam's Market and Grove Liquors have no control over the 'certifcation' process. All they can do is request 'certifca- tion' and wait for it to occur. And no one can say when that will be." Digital Divide While according to IGA's Bennett, in- dependents are still fguring out their place in the increasingly important e-commerce landscape, they're becom- ing much savvier in using the digital marketplace to attract customers. Newspaper advertising saw a decline in 2016 from 2015. Even though 45 percent said in 2016 that they still use newspaper inserts, that number was down from 51 percent last year. Run- of-press newspaper ads were down signifcantly — 27 percent this year, compared with 38 percent in 2015. Mobile Making Inroads in Marketing Percent of independents rating the following strategies as extremely or very important in marketing to consumers Source: Progressive Grocer Market Research, 2016 45.1 39.6 34.0 50.7 35.6 32.9 2016 2015 32.7 23.3 26.9 38.4 Newspaper Digital Direct Mail Mobile Newspaper Inserts Marketing (Circulars, etc.) Marketing Ads (ROP) "In our conversations with our membership, I encounter the whole range of outlook opinions, from 'the cup is half-full' to 'the cup is half- empty,' and even some wondering 'who moved my cup?'" —Leslie G. Sarasin, FMI What's Bothering Retailers? Issues that independent retailers find worrisome Source: Progressive Grocer Market Research, 2016 2016 2015 Ranking Percent Ranking Percent Wage & Benefits (Minimum Wage, 1 75.4% 3 56.3% Affordable Care Act, etc.) Data Protection/Security 2 57.9 1 64.3 Price Increases 3 49.1 2 59.5 Food Safety 4 33.3 4 37.3 Labor (Recruitment, Retention, 5 31.6 5 28.6 Diversity, Training) Annual Report State of the Independents

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