Posted: 28/05/2021

Supermarkets adapting to challenge indies after growth of ‘shop local’ movement

Customer service is one area where indies can maintain a point of difference from supermarkets

Supermarkets and online grocers are adapting their business models to compete with delis and farm shops that have thrived during the pandemic, key figures have warned.

Industry commentators said independent food retailers faced a major battle with multiples that had seen a switch in buying behaviour over the last 12 months and were now looking to capitalise.  

Although supermarkets have benefited from the closure of non-essential shops, they have also watched some customers switch to buying from smaller specialists during the COVID-19 crisis.

Now, many are looking to play up their community credentials – opening neighbourhood stores, launching environmental initiatives, rolling out rapid delivery and luring parents with discounts (see below).

Andrew Goodacre, chief executive of the British Independent Retailers Association, said the large chains were always changing their tactics in light of customer behaviour. “No doubt some of it will challenge the independent shops,” he said. “The extra competition will keep them on their toes.”

“The supermarkets all realise that there has been a shift to local shopping and so we can expect to see more of the smaller store format.

“There are also a couple of companies in London doing basic grocery deliveries within 30 minutes, tapping into the convenience need of young working people.”

Goodacre said independent retailers should focus on the elements they can do better than the chains, including personality and offering a bespoke service. “I genuinely think they will continue to thrive,” he added.

Rob Copley, chairman of the Farm Retail Association, said the challenge was to be expected from big companies who could deliver at scale. “The whole country has changed over the past 12 months, and food purchasing has become more like the fast-food industry,” he said. “Customer service used to be king but now you are two metres away behind a mask – safety and speed are the new kings.”

Copley said that as supermarkets muscled in on the convenience of local stores, independents had to get back to becoming attractions. “We need to get back to being a destination. People are desperate to have something to do. But safety will still override customer service.” 

He added: “The cream will rise to the top. Some very average indies have done well over the last year because of demand, but several will be struggling in six months.” 

Supermarket shift

Morrisons is allowing customers to bring their own containers to its butchery and deli counters as well as removing plastic bags

Co-op has teamed up with Deliveroo to offer people home delivery in as little as 30 minutes from ordering

Iceland has opened a trial convenience store under the banner ‘Fast. Fresh. Local’

Tesco is rolling out recycling points for soft plastic items such as cling film and crisp packets

Waitrose is launching a wine brand developed and owned by staff at a South African winery and is offering extra subsidies to low-income parents given government vouchers for healthy

Sainsbury’s is opening 18 ‘Neighbourhood Hub’ stores that the firm says have ‘community at heart’

On-demand grocer Weezy has expanded into Brighton offering delivery at a claimed average delivery time of ’15 minutes or less’

Read more…

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