U.K. Food Retailers Now Need To Slow Shoppers Down Or Lose Share
Bricks & mortar retailers in the U.K. will soon see a surge of shoppers who once again feel safe in physical stores having avoided them for the past 14 months. But this first contrast to online shopping will be disappointing unless the experience changes. Shoppers will not fall back in love with store shopping because whilst touch and feel has appeal, the thrill of picking up an avocado in person can’t match the simplicity and convenience of online.
Major multiple chain retailers need to engage these lapsed shoppers and give them a clear reason to be loyal if they are to maintain some of the 15% like for like shares they gained in lockdowns. The challenge is that entertaining shoppers isn’t so easy while they’re wearing masks. The sense of smell is dulled and vision is foggy, so touch, taste and imagination are left to do the work. Scotland has announced that masks will remain in retail after all other lockdown restrictions are released and retailers do not want to see this replicated across the U.K.
Retailers need to disrupt behaviors learned during the pandemic. Having tried to speed shoppers up for months, stores now need to slow them down. They need to engage their imagination and get them reading packs to consider new purchases. All this with their glasses steamed up.
So far I’ve seen no retailers striving to be this “media store” – just cost-cutting, penny-pinching and compromised buying decisions based on the suppliers who are prepared to prop them up with margin. Without some form of reinvention from the mainstream multiples, Amazon AMZN and the discounters Aldi and Lidl, will find stealing share as easy as taking candy, and indeed all other categories, from a baby.
Lockdown has presented a business “ground zero” and supermarkets should not aim to rebuild what they had before. Unless of course they are a discounter, given the certainty that a huge demographic will be poorer. Knowing that Tesco and Sainsbury’s marketing campaigns now advertise Aldi in their “price match” initiative, you know the discounters have got it right. Asda have seen this, and they are finally facing their reality after years under the wing of Walmart, WMT pitifully trying to gain the loyalty of shoppers who went there for cheap prices but now see a cheaper Aldi next door. Asda’s post pandemic choice is clear: get range and stock down, rent the space to concessions and be a real discount player. EG Group, Asda’s new management, who face criticism for their ‘precarious financing’, have a grocery game plan like no other. Being giants in gas forecourts they simply have to wait for electric cars to take over and the time it takes to charge batteries rather than fill up will hold shopper’s captive in their new convenience channel.
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All retailers however need to defend against losses to the reawakening hospitality sector. According to suppliers of beers wines and spirits, take-home sales are already in a 12% slump since reopening started in April. Pubs and restaurants have however taken a backward step in the path to recovery with the U.K. government’s decision last week to delay removal of all restrictions for an extra month. This hits them hard; the combination of no standing or approaching the bar, and sitting in maximum groups of 6 approximately halves a pub’s average takings. This delay is merely a stay of execution for retail though. As many are enjoying the current freedom to eat and drink without cooking, bear in mind that for those calories, neither will they be shopping. Its going to be a rough ride for supermarkets over the next 12 months.