What does the consumer want?
Developments and trends in food retailing.
Author: Oliver Merckens
IN THIS ARTICLE I WILL PRESENT A FEW THESES ON CONSUMER BEHAVIOUR AND POSSIBLE EFFECTS ON GROCERY RETAILING.
Consumer demands in terms of assortment breadth and depth have risen in recent years and have become more important in the choice of where to shop. The space available at discounters and supermarkets (approx. 800 to 2,000m²) is usually not sufficient for such assortment expansions (specialities).
This has led many participants in food retailing to expand their average sales areas (source: HDE Handelsreport). However, enlarged stores do not mean that there is now suddenly a lot of space for new listings. Competition for shelf space remains.
HOW IS THE PRICE SENSITIVITY OF GERMAN CONSUMERS DEVELOPING?
According to the recently published study Disruption & Uncertainty: The state of European grocery retail 2021 (source: McKinsey), 56% of the European retail CEOs surveyed expect the relevance of price to consumers to increase again in the post-Covid era. Last year, price was no longer the most important factor. Of the German consumers surveyed in the study, 27% said they would spend less when shopping in 2021, 23% would look more for promo items and 11% would buy cheaper items versus 2020.
Price is gaining importance again
WHAT TRENDS ARE COMING FOR THE GROCERY RETAIL INDUSTRY?
In addition, the study expects the following trends to emerge in the coming months:
- Return to “normal” will lead to us going to restaurants again (more) and thus cooking less at home (ergo shopping less in the supermarket).
- Consumers will abandon the restrictive use of individual food retailers and spread their purchases over more shopping locations again (during the pandemic this was considered a measure to reduce a risk of infection).
- Increase in food online sales (the customer had come to appreciate the benefits of e-commerce or fast delivery during the lockdown).
- Personal lifestyle will continue to drive health, sustainability and regionality.
- Convenience remains an important issue for the consumer with different facets (one-stop shopping, ready to eat, home delivery).
All this “can” lead to the fact that the high demand of the past months for some players will weaken and thus the pressure in grocery retail will increase in the coming months – the fight for the favour of the consumer continues!
Conclusion: I am curious to see what all this will mean for concepts, assortments and price competition in food retailing. One thing is certain, consumers will be able to fill their shopping baskets in even more diverse ways in the future. The development in the area of delivery also remains exciting.