What can we learn from the early days of this virus crisis?

The virus will continue to be very challenging for our industry, albeit less challenging than for many others.  It is requiring us to act and think very differently, very quickly. At this early stage, a few days into the crisis in the UK, what can we learn?

 

First, do not underestimate the purpose of our industry.  Cynics might in the past have seen mission statements of food companies and retailers about “feeding the nation” and wondered if really their main purpose was about returning value to shareholders.  Well, the current situation reminds us that there is a fundamental purpose to our industry more important than profit.  We are here to get food to people, the food they need to prosper.  That is something to motivate us as a workforce.  Who realised two weeks ago that we had so many key workers in our midst? 

 

Secondly, respect what the industry has achieved.  Now you stop to think about it, it is remarkable that a shopper (assuming they have the money) is able to walk into a supermarket in any town on any day, and pick up a mango from Kenya, coffee from Costa Rica, a packet of Parma Ham, and so on.  Even more remarkable, choose from a range of ready meals with ingredients from all over the world, manufactured at scale to deliver on the vision of a development chef, at a site somewhere off the M25.  It is even more remarkable that the complex, hugely sophisticated supply chain that allows all this to happen, appears at this early stage to be pretty resilient.  None of this is to the credit of any of us as individuals.  It has been achieved by millions of people over hundreds of years.  But it is quite something to think that we are all an infinitesimally small part of that achievement. 

 

Thirdly, notice the limits of competition and the profit motive.  Most of us would agree that what the industry has achieved has been enabled and accelerated by vigorous competition and the drive for financial returns.  But in the last few weeks, other principles have trumped those.  As far I can see, Retailers are working well together and with the government in the national interest.  Retailers and Suppliers are talking together not just about commercials but also their duty to the population.  It may be that when we are through all this, we will put away the football, return to the trenches and start shooting at each other again.  That might even be right and proper.  But it is possible that some of what we have learnt about co-operation and wider purpose may serve us well the other side of the crisis. 

 

One final thought.  Retailers are clearly acting to help the most vulnerable to illness.  It will also be important to continue to keep prices low for the financially pressed.  If supermarkets continue to heavily reduce promotions, they will need to get “full” prices down.  There’s a competitive rationale for this as well as a reputational one.  If they don’t, Discounters will surely win yet more customers.

 

One tiny silver lining in this difficult situation is that gives us new perspectives on our industry.  That may help us as we struggle to come through and then out the other side of the virus.

Jeremy Garlick is a Partner of Insight Traction, consulting with FMCG and Retail companies.  He was formerly Head of Insight at Sainsbury’s, Waitrose and Premier Foods.

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