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
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.”
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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