Many leading retailers have already committed to lowering their carbon emissions, but very soon, sustainability will move from “positive messaging” to table stakes. Consumers’ environmental concerns are only growing, and they expect their grocers to develop sustainable practices too. The increasing complexity as they experiment with fresher products, smaller store formats, and localized assortments will put their grocery supply chains to the test. In their pursuit of growth, these former hard discounters are stepping away from their highly efficient comfort zones previously built on simplicity, standardization, and large volumes. Healthy eating trends have even discounters like Aldi and Lidl improving their fresh offerings to include organic meats and freshly baked breads. Spotlight on challenging fresh and short shelf life products.With poor execution, though, these initiatives also introduce new opportunities to lose money on costly food waste. Some are even opening in-store restaurants. As a result, food retailers are turning to prepared meals to increase relevance and high-value food-to-go items to improve margins in a tough environment. Restaurants, meal delivery services, and food-to-go are capturing an increasing share of consumers’ wallets. Grocery retailers must also compete with the food service industry.Cost control always provides a competitive advantage, especially when consumers are hesitant to spend, so streamlining operations to improve efficiency must be a key part of every grocery retailer’s strategy going forward. Since 2008’s financial crisis, discounters have grown their market share, proving that shoppers appreciate low-cost private label products and well-curated assortments, even at the expense of abundant choice. Discounters have demonstrated the power of operational efficiency.But while many struggle to make e-grocery profitable, few food retailers can afford not to go online. From online ordering to home delivery and curbside pickup, the speed of omnichannel development has made operational efficiency particularly challenging for food retailers due to their mix of low-value products and high handling costs for fragile, variously sized products that often require temperature control. Breakneck developments in online ordering and order fulfillment options.Grocery retailers need to simultaneously address several major trends: Grocery has never been easy, but the current business transformation is more dramatic than anything we have seen in decades, especially with COVID-19 further accelerating many trends shaping the market. Grocery Retail Strategies Fall Flat If Not Backed by the Right Supply Chainsįood retail is a tough and turbulent market.
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