How the UK can earn a reputation for excellent modern food retail
Spending time recently in supermarkets in Spain and Norway, I found myself worrying about the UK grocery shopper experience. Many of their stores look and feel better than ours, certainly in Fresh. Why is this? We have strong and fast-growing Discounters. We have an unusual amount of (expensive to serve) online grocery. We have a fast-growing minimum wage. In this environment, there is less time and money to deliver for shoppers who are prepared to pay more for a good food experience.
At a time when we’re feeling bruised about our national reputation, we don’t want our own industry to slip out of the top league of worldwide grocery. So what can be done to earn a reputation for excellent modern food retailing?
First of all, it is about great products. We have been admired globally for our own label design and marketing, but we need substance as well as image. It isn’t just about dropping a few new products into top tier own label, or re-branding it. It’s about products that take forward the way we live and eat. For example - how well have supermarkets responded to Gousto and Hello Fresh? And how much time is being spent talking about food and innovation in the boardrooms of our biggest supermarkets, versus twenty years ago?
Second, it’s about the look, feel and experience of the stores. Quality lighting, fixturing and design are essential to excite shoppers about food. George Clooney wouldn’t look so good in tattered, faded clothing. But as the establishment players are forced to cut costs to compete with Aldi and Lidl, we see stores that are increasingly dowdy. M&S’s new stores are a welcome exception that show another way. They achieve a different level of excitement and aspiration to anything else I am seeing in the UK currently.
Thirdly, great leadership will be required. The spreadsheets will suggest that none of what I am suggesting can be affordable for what we used to call the Big Four. Shareholders will need persuasion. But if the supermarkets don’t find a way to afford differentiation on product and experience, they will continue in a downward spiral, beaten in a game they can’t win, by the disciplined operators at Aldi and Lidl. Of course, our industry leaders are right to obsess about cost, including serving shoppers who can’t afford to pay for soft lighting and pretty fixtures. But they must simultaneously cater for those who will pay more for a better experience, because Aldi and Lidl can’t win there.
It is not going to be easy to arrive in ten years’ time at a better and more exciting food retailing experience for UK shoppers. But with a leap of faith, a passion for great product and experience, it can still happen.
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.