Valerie Rice on how Ireland’s grocery market has reacted to changing consumer demands since the Covid-19 crisis struck
Great food retail has always been about inspiring and exciting consumers in-store. As a former Superquinn executive, it was something that kept me awake at night: creating theatre, bakery aromas, strong displays and winning tastings. However, since the Covid-19 outbreak, retailers have had to act quickly to ensure the supply chain works safely while not losing sight of what selling great food is about.
Retailers became front line workers as consumers rediscovered cooking at home. Food assumed a form of entertainment as celebrity chefs like Kevin Dundon, Donal Skehan and Jamie Oliver inspired people to create recipes from stocks. Since the lockdown in March, retailers have faced new challenges in balancing pressurised supply chains and coping with higher costs in getting food to consumers.
They invested more in marketing to let shoppers know that they and the food they bought in store was safe, while dealing with wafer thin margins and cut-throat competition. Staff and customers had to be protected and reassured. Throughout this time, shopper behaviour has evolved as expectations and needs changed operating to a set of new habits, re-enforcing ‘home’ as our new place of safety.
Value counts more than ever: BWG’s Suzanne Weldon says that value is set to become all the more critical in the coming years. The indicators are that economic uncertainty will require a keener focus on consumers getting the best returns. Across BWG’s network of over 1,000 retailers, experiences vary. While neighbourhood stores have done remarkably well, city centre shops were hit by people working remotely since lockdown.
Local shops and retailers had to be nimble to respond to changing customer needs and increased local demand. Suzanne Weldon, marketing and communications director, BWG, the group whose convenience brands include Spar, Mace and Londis, says shoppers are still staying at home. “We’ve seen a trend across convenience to bigger shops and a greater demand for ingredients,” Weldon said.
“So we broadened our range,” she added. “The trends extends across all shoppers as people have more time to prepare meals at home. The impulse coffee and treat dropped off, which was a big change, replaced by cooking from scratch. Grocery shopping came back and with it a need for a wider choice of ingredients.”
Weldon says it marked a shift for convenience. With 1,000 outlets, BWG’s neighbourhood stores saw new categories introduced. For instance, they filled the gap created by the closure of garden centres and DIY stores by stocking plants. Research by Behaviour & Attitudes showed that 46 per cent of Irish people have been cooking more meals, with a similar number now eating main meals in groups.
Retailers in the heart of communities became lifelines for vulnerable groups providing home delivery services. London-based food and hospitality expert and former Harrods and Selfridges executive Bruce Langlands believes retailers focus on service will continue to grow, with independent retailers providing customers with a more personalised service and, at times, better availability.
Hike in topping up visits: There was a 26 per cent increase in smaller ‘top up’ shops and an eight per cent drop in consumers shopping for groceries just once a week. A recent survey by Spark for the Kinetic out of home agency examining consumer behaviour changes while the country was emerging from lockdown showed a 59 per cent increase in consumers shopping generally, with one in three saying they enjoyed the experience.
“Shopping local increased a sense of community spirit, which hopefully is here to stay,” Langlands added. Throughout the pandemic, the brand over the door became a symbol of trust which transfers into consumer expectation of the retailer’s own private label offer. Shoppers are more closely scrutinising private label so retailers must consider ingredients carefully when bringing ranges to market.
Weldon says private label plays a big role in their business. Demand increased due to shoppers new habits in buying more ingredients for everyday meals. Spar private label cleaning products sales also showed an upturn. However, despite an increase in consumer sentiment, with economic uncertainty over how the impact of the pandemic will have shoppers are fearful for the future.
Retailers know that consumers will look to make greater savings. While private label has come a long way, Quinnsworth’s Yellow Pack is not forgotten. Retailers must work hard to reassure shoppers of their ongoing commitment to food quality, whether it is by the more select range or the everyday value offer. Value means different things to different people and retailers need to take that on board.
MOUSE TO HOUSE
Online shopping has finally got real traction since the pandemic took hold. The Grant Thornton Agri Food report from May showed that one in three food businesses have already changed their route to market (RTM). Some 36 per cent have leveraged new technology and 30 per cent sought new service providers or customers. A quarter of businesses decided to pivot their business model.
Ocado in the UK saw a 27 per cent increase in sales in the first half of the year while Tesco online orders were up by half during lockdown. Langlands says online services have become the lifeline for independents to grow businesses through the services of home delivery and click and collect. “For those that haven’t expanded an ecommerce solution, it will be a key investment,” he insisted.
With consumers focusing on staying healthy, self-care has become a priority. It will create lasting opportunities for retailers to build stronger health ranges. Weldon says shoppers have changed expectations about hygiene protocols while shopping. BWG retailers increased their cleaning frequency had to every 15 minutes and Weldon believes it will continue to be a priority for shoppers.
“Shoppers will be influenced in their choice of retail store by cleanliness and the environment going forward,” she said. “It’s a new cost businesses have to factor in. These will be the stores shoppers will trust.” Organic rocketed, as some shoppers wanted more natural foods. Producers such as Airfield Estate, Sprout and Forest Avenue evolved into organic collection points for new consumer advocates.
IMMUNITY
Informed consumers already regarded food and health as interlinked. More consumers began asking the question, will what they eat help safeguard their health? Where did the food originate? Bord Bia identified that 29 per cent of adults eat more healthily for improved immunity. “We’ve a good base of quality fresh suppliers in Ireland,” Weldon said. “They worked hard to ensure supply was maintained.
In tandem, BWG has seen shoppers buying more fresh ingredients and looking for healthier options. Now more than ever, messaging about food quality tops shopping lists. Google searches for ‘food’ and ‘immune system’ have spiked since March. Consumers shifted from protein bars to booster shots of fruit, vegetables and Sambucol. Food created and backed up by science will do well, but waffle won’t work.
One trend that emerged during the lockdown that looks as if it is here to stay is gourmet meal delivery kits. During the lockdown it allowed unskilled cooks to prepare fresh and healthy meals by following the cooking instructions with all the ingredients pre-selected, measured and prepared. Businesses like Asador and Glovers Alley reported a 70 per cent sales spike during the pandemic with sustained sales.
The high margin, high value on the go category disappeared during early lockdown. It is now in recovery, albeit slowly. The category to be far more location specific now. People are out more, and the at-home workers are now back treating themselves at lunch to escape the four walls, but in their community, rather than in town.
City centre is still challenging.
Weldon says independent retailers are entrepreneurs however and can adapt fast to changing trends. Many restaurants faced with potential financial ruin managed to triumph in the lockdown, creating a new gourmet home take away channel to keep their customers close, while recreating the restaurant feeling at home. From Etto to Michelin-star Liath, it looks like a revenue stream here to stay.
Tech provided a solution to get food to consumers quickly. The Deliveroo and Uber Eats apps feature in the UK’s top 10 apps. Consumers’ favourite restaurants are just a click away – a game changer. Never has so much happened in food retail so quickly. Covid-19 sparked many positives and a passion for food by resilient producers and consumers reacted in a way that few of us could have foreseen.
For their part, BWG is trialling new tech which allows shoppers to choose a product, scan the barcode with their smartphone to pay for it and leave the store without queuing. BWG has teamed up with London-based MishiPay to introduce the theft-proof self-checkout option – the first Irish retailer to do so. The tech is already used by sports goods retailer Decathlon across its 81 stores in Germany.
Valerie Rice is managing director at Valerie Rice & Associates
