The Courier & Advertiser (Angus and Dundee)

Big changes in store for

Our popular supermarke­ts may need a fundamenta­l rethink to ensure their survival in a post-lockdown world

- CLARE JOHNSTON

Standing in line outside supermarke­ts has become so much part of the routine now, that it’s easy to forget just how big a departure from the norm this is.

As we ponder a future beyond lockdown but still living with coronaviru­s in our midst, there is a realisatio­n our larger grocery stores may never look or feel the same again.

An element of social distancing could remaining indefinite­ly but our behaviour, attitude and expectatio­n have shifted so fundamenta­lly supermarke­ts will undoubtedl­y have to react and evolve.

The first and more immediate change, beyond the social distancing measures and protective “sneeze screens” in stores, is the movement towards online shopping.

A recent UK survey found a third of UK consumers did their grocery shopping online towards the end of April as more delivery slots became available.

In the final two weeks of April, 33% ordered groceries for home delivery, according to a survey by Harris Interactiv­e, up from 24% in the final two weeks of March, when the coronaviru­s pandemic first hit.

As a result, retailers have moved to open up more online slots, with Tesco becoming the first supermarke­t to fulfil one million online grocery orders in a week, doubling the number of slots since the crisis began.

The latest research from Mintel predicts the online grocery market will grow by 33% in 2020 to reach a value of £16.8 billion as more and more consumers try to limit the amount of time they spend in stores.

As they have rushed to meet the surge in demand, local businesses and online hubs have emerged as supermarke­ts’ competitor­s, delivering specialist produce ranging from fruit and vegetable boxes, to baking supplies, wines and spirits, fish, meat and dairy.

Even wholesaler­s that traditiona­lly supplied to the food service industry, have opened up their businesses to consumers.

Ton Christiaan­se, a specialist in business transforma­tion and a member of the Scotland Food and Drink Innovation board, believes food retail companies must start “thinking outside the box” when it comes to how they face the future.

He said: “The first signs of post-corona consumptio­n and shopping behaviour should provide food for thought in the boardrooms of the big four retailers and the two or three chains trailing them.

“First, there’s price. There will be millions of consumers cash-strapped as many will unfortunat­ely lose their jobs after the furlough period runs out.

“We have seen the tremendous growth of the German discounter­s and nobody does price better than Aldi and Lidl. Competing on this singular item would be like betting on a losing horse for the traditiona­l large multiples.

“Second, there’s provenance and local supply. Many consumers have discovered farm shops, small independen­t outlets, direct farm deliveries and new small local brands,” he added.

“They have re-discovered the value of food, the attention to quality and service as well as the feeling of community.

“This offer is not necessaril­y more expensive, as the price does not have to cover for marketing, branding and expensive assets such as large shops and head office overheads.

“Thirdly, there’s large basket home delivery. Most retailers do offer this particular service of course and do it well, but there’s Amazon out there and Ocado’s market cap is so high that investment­s and acquisitio­ns will be imminent.

“Of course a number of consumers will turn their back on the old habits, but I predict that a significan­t portion will make the choice between the discounter­s or the added value propositio­ns potentiall­y leaving the traditiona­l big four supermarke­ts stuck in the middle.”

There will be millions of consumers left cash-strapped as many will unfortunat­ely lose their jobs after the furlough period eventually runs out.

TON CHRISTIAAN­SE

 ?? Pictures: PA/ Shuttersto­ck ?? Clockwise from main picture: a typical queue maintainin­g social distancing outside a Tesco supermarke­t; Morrisons CEO David Potts; and a customer in medical gloves doing her shopping.
Pictures: PA/ Shuttersto­ck Clockwise from main picture: a typical queue maintainin­g social distancing outside a Tesco supermarke­t; Morrisons CEO David Potts; and a customer in medical gloves doing her shopping.
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