Natural Foods Merchandiser
What's next in naturals: cart-containment; estate tax; drive-through groceries

What's next in naturals: cart-containment; estate tax; drive-through groceries

NFM shares the latest and greatest inventions and trends on the horizon for grocery stores, including cart-containment systems, the return of the estate tax for small businesses and drive-through groceries.

Cart-containment systems spread

While not much more than a decade old, shopping cart–containment systems—technology that keeps carts from being pushed off property by locking their wheels—are spreading across the country. Over the past decade, Gatekeeper Systems, an Irvine, Calif.-based company that accounts for 75 percent of the market, has installed systems for the top 20 U.S. retailers that use carts, says Karryn Gleckner, spokeswoman for the company. Gatekeeper also offers loss-prevention systems that prevent carts from leaving the store if they contain items that haven't been purchased.

What's next: To curtail the nuisance of wayward carts, Gleckner says at least 17 cities nationwide passed carts laws in 2009 requiring large retailers to implement cart-containment systems. 

What this means for retail: While prices are dropping, cart-containment systems can be costly for small retailers. Gatekeeper's price tag ranges from $8,000 to $50,000 per store depending on size. To cut costs, Gleckner suggests neighboring stores share a cart perimeter, which reduces installation fees.

Return of the estate tax could hit small businesses

Unless Congress acts before the end of the year, estates greater than $1 million could be taxed at a 55 percent rate, after a $1 million deduction, when the owners pass away, due to an estate-tax hike that would restore 2001 rates. Such an increase would be devastating for many small family businesses, including natural grocery stores, says John Gay, executive director and CEO of the Natural Products Association. "If the founding store owner passes away, will the rest of the family be able to keep the business, or do they have to sell it to pay the tax?"

What's next: Gay believes the reinstated estate tax is so unpopular, Congress will likely delay its return for at least a year in an attempt to hammer out a solution. But considering the legislative deadlock gripping Washington, he doesn't expect lawmakers to agree anytime soon on a long-term alternative.

What this means for retail: Whether or not the estate tax rate is reset to 2001 levels, it makes sense to be proactive in safeguarding your assets, says Thomas Marcoux Jr., principal of treasury consulting firm Reserve Capital Value, based in Rockville, Md. Make sure you have a transition plan in place, he says. Consider discussing with your tax planner a joint-ownership agreement, stock distribution or a foundation into which you could shift your assets. Also let your D.C. representatives know your feelings about the estate tax. One proposed change to the levy would let owners prepay their estate taxes instead of allowing the full financial burden to fall on their heirs.

Retailers test drive-through groceries

The British supermarket chain Tesco turned heads in August by launching the United Kingdom's first drive-through supermarket service. Similar to home-delivery grocery services, customers pay a flat fee to purchase their items online, and then select a two-hour window in which to pick them up at the store.

What's next: Don't expect drive-through groceries to spread from coast to coast, predicts Kirk Cornell, senior director of strategic insights at the Hartman Group, a Bellevue, Wash.-based consumer-consulting firm. "One of the primary limitations is people like to shop," he says. "With packaged goods it may be more viable, but for me, I can't imagine not going in and picking out my own produce." That's why he believes a pilot grocery-delivery service rolled out by several years ago hasn't spread beyond Seattle, and the only drive-through supermarket program he's heard of in the United States—AutoCart, planned in Albuquerque, N.M. in 2005—hasn't been built.

What this means for retail: Before signing up for the latest retail gizmos and strategies, retailers need to critically assess all potential benefits, Cornell says. "Grocery stores are always dreaming up more convenient little service tweaks to help the consumer, but in many cases, we find the consumer doesn't really want them." Technological advances should be designed to improve consumer service, experience and price. If they don't, they're not worth adopting, Cornell adds.

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