Sector Insight Briefing - Autumn 2018 - The challenges ahead for food retail as the hunger for change grows.
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Sector Insight Briefing
Autumn 2018
The challenges ahead for food retail
as the hunger for change grows.
/
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visualthinking.co.uk
1
Contents
The Performance Issue
Special Features
Future Food 4
The UK grocery retail sector is reportedly worth
£175bn, with sales predicted to hit £197bn by 2021.
Introduction 1 Here, we examine what the future could look like
for grocery...
About 2
Our Favourites 7
Supermarkets’ ability to keep things fresh is being
put to the test. Here’s our review of what we
Changing Tastes 3 personally love and things we think have reached
their sell by date…
Rotten Tomatoes 10
Big Eats 11
Prime Cuts 12 What are some of the big trends currently shaping
UK grocery retailing? Here are just nine… as food
Organic Roots 17 for thought.
Deli-cious 19 Great Taste 13
Seasoned Well 20 A roundup of great food finds that are prepared
to perfection. From Singapore to the Netherlands,
My Beef 21 plus some of the tastiest home-grown examples
that we recommend you visit, our selection is
Food Talk – The Interview 22 further testament to how grocery retail does not
have to be a soulless and sterile experience.
Wait’rosy? 24
Shelf Life 26
Buy British 28 Grocery retail is in flux. But the main enemy isn’t,
as many argue, the threat of online. In fact, the
Hello Jack’s 29 solution could lie in changing the way we view and
value store staff.
VM for GM 30
Street Food 31
Box Fresh 32
Healthy Swap 33
Bread Winners 34
Cook Books 35
Copywriters
Marc Baker
Kay Garrett
Guest Contributors
Bryan Roberts
Anna Masing
Contributors
Karl McKeever karl@visualthinking.co.uk
Kirsty Kean kirsty@visualthinking.co.uk
Suzanne Tanner suzanne@visualthinking.co.uk Image | Apolónia, Portugal
Katy Trodd katy.trodd@visualthinking.co.uk
Ellie Pask ellie.pask@visualthinking.co.uk
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1
Introduction
The grocery retail sector is in a state of flux. Assumptions that have
underpinned the business models of the big supermarkets for so many years
no longer hold true.
Put simply, there is much work to do. For most it is no longer about tweaks
but rather how they can fundamentally reinvent themselves, redefine their
place in the market, do it better, and do it now. Too many in the sector lack a
real purpose or benefit. Differentiation should be easy. Sadly, ‘me too’ seems
an easier path to follow.
This means adopting an approach of clear, considered thinking and applying
great expertise to deliver rich and consistent visual execution instore, inspiring
positive emotional responses from shoppers, rousing their brand affection and
adding payback to the commercial profitability of physical retailing.
Nonetheless, there are some sensational examples of best practice to be found,
both in the UK and around the world. Those who are getting it right are set to
win big. Could your business be one of them?
In reality, many in the sector are still missing out on quick wins, such as better-
defined visual policy, developing team capability and improving their ability to
deliver first-rate retail standards. The support and tools, which could so easily
be added to their armoury, are out there. They just need to be used effectively.
Challenges are there. So are opportunities. And we know how to tackle the
former and harness the latter
Karl McKeever Kirsty Kean Suzanne Tanner
Founder & Managing Director Lead Retail Specialist Senior Retail Specialist
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2
About
This special Insight Briefing aims to
provide in-depth insights into the ever-
changing tastes of shoppers, highlight key
sector trends and offer thought-provoking
observations to inform retail thinking in the
coming months. Using our industry expertise
to drive best practice, we aim to guide serious Visual Thinking knows a thing or two about grocery retail. With
25 years of experience, we’ve enabled some of the biggest
retail professionals towards their ultimate names in sector to see real and immediate breakthroughs in retail
goal: improved retail performance. performance, from front of store promotions, to category specific
store presentation solutions. Our team of retail transformation
specialists are dedicated to helping retailers take stores from
To those truly attuned to the changing needs of customers in the the everyday to the exceptional. Whether your focus is on game-
sector, it will come as little surprise that following extensive store visits, changing methods or continuous improvement, we turn big
we found many that aren’t paying enough attention to the basics of strategy into meaningful action – informing policy, embedding
good presentation standards and customer experience. These are change, empowering teams and engaging shoppers. No one
issues that significantly impact on performance effectiveness of stores delivers visible change instore better and faster.
over time. Even for the top performers, there’s still some way to go.
For more information visit:
We’re still surprised by the number of grocery retailers leaving www.visualthinking.co.uk
potential sales opportunities on the shelf. Shoppers’ spend is hard
won, and food retailers of every kind and size need to up their game –
considerably – to see positive improvements where they matter most…
at the checkout.
Within the following pages we underline the missed opportunities
if retailers neglect to implement such quick wins and the danger
of overlooking the long-term value of getting best practice right in
the here and now. Many at store level remain remarkably indifferent
towards the impact that good retail standards have on customers’
opinion on the brand, service and overall shopping experience. All are
proven to drive up customer satisfaction and average spend. The devil
here is in the detail
It’s very easy to be different,
but very difficult to be better.
Image | Gus’s Community Market, San Francisco
Sir Jonathan Ive
Apple
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3
Changing Tastes
Research commissioned by the UK’s leading
recipe box service, HelloFresh, found that on You are what you eat
average Britain’s only have six recipes in Go back two generations and most families ate their meals at
our repertoire. the same time every day (breakfast at 7am, lunch at 12pm and
dinner at 5pm). There was also a strict rota when it came to what
people ate on which day of the week. A roast dinner on Sunday,
followed by leftover cold meat on a Monday, then any further
leftovers made into a pie or other dish for Tuesday, Wednesday
and Thursday. Not forgetting “fish and chips Friday”. The weekly
food rota was very much always the same, using up all leftovers
and serving them with fresh vegetables every night.
Whilst people often didn’t have a huge variety of choice, it
was true that people regularly ate freshly prepared meals and
vegetables. This discipline helped to keep waistlines slim and
food waste to a minimum. Today, the 3-square-meal-a-day rule
is the exception rather than, well, the rule. Skipping breakfast,
snacking and several cups of coffee a day are commonplace.
Long gone are the hours spent slaving over the stove. Instead,
choice and convenience abound. Not only do we get to choose
when we eat our food, but we also have a vast selection of food
options. From takeaways, fast food and ready meals to dishes
and ingredients from around the world; Italian, Mexican, Asian,
Polish, the list is exhaustive.
It’s fair to say that the nation’s taste buds have developed over time; Whilst we’re certainly more educated in nutrition, the contrast in
some of the traditional British favourites are losing favour or being what and how we eat compared to our grandparents is glaringly
replaced by other options. The Department of Environment, Food and apparent, though not necessarily always for the better.
Rural Affairs has been collecting data on eating habits through its
annual Family Food Survey for decades. So just how much have our
taste buds changed?
+49.52% + 100% +378.33%
Bacon Ready
Fruit Butter Beans Vegetables Pasta
Sandwich Meals
-70.75% -46.55% -17% -3.24%
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4
Future Food
Image | © Lernert & Sander – Cubes
The UK grocery retail sector is reportedly worth
£175bn, with sales predicted to hit £197bn by
2021. Here, we examine what the future could
look like for grocery...
Back
Back Next
5
As a nation, we have largely ditched the traditional weekly shop.
The Performance Issue 5
Time pressures, combined with heavily publicised concerns about
household food waste, have resulted in a drop in larger shopping
missions. Instead, British customers visit food retailers more often,
but for smaller and quicker shops. But how can retailers adapt to our
changing needs and create strategies to adjust to future trends?
Food for thought
According to Defra, some 24% of a typical pay packet went on food
in 1974 compared with just 11% today. Increased competition, better
logistics and modern agricultural methods have all played a part in this.
So too has the price war, first spearheaded by Tesco and Morrisons,
in attempts to stall the advance of the discounters. It didn’t work and
falling prices have only resulted in profit margins of the established
players being squeezed. It highlights the futility of pursuing a strategy
of price slashing. It is also a clear sign that retailers have failed to keep
pace with the changing demands of today’s grocery shoppers. What’s
called for is an improved and extended offering instore, a refocus Image | Soriana, Mexico City
on back to basics and retail experiences that satisfy more than just
functional needs.
Rising stars Food pairings
Discounters are faring well in the nation’s favour at the moment. In As shopping habits change and the role of stores evolves, grocery
2017, £1 in every £8 of grocery spend found its way into the pockets retailers are exploring how to redefine their place in the market. The
of Aldi and Lidl, according to Nielsen. Earlier this year, Aldi knocked common consensus, when you look broadly at their strategies, seems
Waitrose off the top spot as Britain’s favourite supermarket in an instore to be to give customers more reasons to visit, through partnerships
survey carried out by Which?. The survey ranked supermarkets in the with other retailers, high-quality instore dining and other service-based
instore category based on consumers’ feelings about the appearance options. Among additional offerings not currently available, studies
of stores, queuing time, staff availability and the range and quality of have found that, perhaps surprisingly, postal services would be the
products and value for money. most popular, followed by health clinics and banking services. And the
common theme across all channels is the need to provide convenient
Merger matters services that appeal to the time-conscious customers.
Industry commentators suggest that we will see declining numbers
of physical supermarkets in the UK. ‘Less is more’ is likely to be the Tasty challenges
key theme. This will be partly driven by greater consolidation within Overall, grocery retailers are reconsidering their approach to physical
the sector, such as the proposed £12bn ‘Sainsda’ deal. If successful, retail spaces in a bid to better reflect our changing habits – and get
it would have combined revenues of £51 billion and boast a network us to spend more. Time-conscious customers will no longer tolerate
of 2,800 Sainsbury’s, Asda and Argos stores. And let’s not forget the attempts to lure them into buying non-essentials instead of directing
Tesco-Booker mega-merger too. But will it mean fewer, better? them straight to everyday items. Shoppers want to get what they
need and fast. That presents operational challenges: defining and
communicating layout and retail policy changes and engaging and
developing the skills of retail teams to implement and maintain new
ways of thinking both effectively and consistently
% Share of Total Market UK, Finanical Year Ending 2017
12 Weeks to 16 July 2017 Food and non alcoholic drinks (£ per week)
12 Weeks to 15 July 2018 % of total expenditure
30
25 27.9 27.6
20
15
16
15.6 15.1 15.1
10
10.5 10.5
5 7 7.5
6.2 6.4
5.1 5.4 5.1 5
0 2.12 2.1
1.1 1.2
1.81 1..8 1.8
Iceland
Independatns
Morrisons
Waitrose
Aldi
Symbols &
Asda
Co-op
Lidl
Ocado
Tesco
Other Multiples
Sainsbuyr’s
Under 30 30-49 50-64 65-74 75 and over
Back Source: Office for National Statistics.
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6
The Performance Issue 6
The Future of the UK Bryan Roberts
Global Insights Director
TCC Global
Grocery Landscape
When looking at the future of the grocery market in the UK, there are some
knowns and unknowns.
In terms of knowns, there are a few very well-documented structural shifts
underway in the UK grocery market. Chief among these is the ongoing The wild card could be Amazon. I’m learning that nothing can be ruled out
growth of the limited assortment grocers – Aldi and Lidl – with a combined when it comes to Amazon: common logic suggests that Morrisons might
market share of 13% and an expectation that this will double over the be a target, but its more upmarket shopper and its weighting towards the
medium term. The shift of grocery spend online, with the associated southeast could make Sainsbury’s a preferred option. And such a move
dilution of profitability, appears to be plateauing, but still accounts for a would annoy Walmart, no doubt a bonus for Amazon these days.
decent slice of the market. Another known is that the major mainstream
supermarkets are facing up to a new reality: lower margins, a need to keep Another unknown is how warmly shoppers will embrace Tesco’s new
a stern eye on costs and shoppers that are better informed and more discount fascia. If its first store in Cambridge is anything to go by it will be
promiscuous than ever. a very standard take on the discount concept, but there’s little doubt that
Tesco has plenty of resolve and more than enough spare space and car
The unknowns also loom large. One key question is the mood of the CMA parks to give the new venture some serious welly.
when it comes to assessing the proposed merger of Sainsbury’s and Asda.
Will this regulatory process be the excruciating and value-destroying saga One topic that receives less than its fair share of coverage (thanks to their
that befell Poundland and 99p Stores? Or will it be the shoulder shrugging exclusion from the monthly market share data pored over by the business
‘whatever’ that greeted Tesco and Booker? Best case for Sainsbury’s and pages) is the threat posed to supermarkets by B&M and Home Bargains.
Asda looks likely to be a green light with up to 100 stores needing to be The former, which is bolstering its full grocery ranges and building on its
sold. Another question is whether or not a third party might look to gate- Heron Foods division through the opening of B&M Express outlets, poses
crash the wedding before the rings are exchanged – precisely as Walmart a huge threat to the Big Four yet is rarely mentioned in the traditional food
themselves did to the planned Kingfisher-Asda nuptials many years ago. retail narrative.
UK Grocery Landscape
Grocery Market Share 2013-2018 (%)
January 2013 March 2018
3.9 M&S Food 3.3
Back Source: Kantar Worldpanel/FT.com/Statista
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7
The Performance Issue 7
Our Favourites
Supermarkets’ ability to keep things fresh
is being put to the test. Here’s our review of
what we personally love and things we think
have reached their sell by date…
Our team as shoppers…
Like the rest of Britain, we love food and food shopping. We’re a
representative cross-section of foodies. From ‘meals in minutes’
masters to salad superstars, weekend cooks, cake makers, bread
bakers and more.
Image | Morrisons, St. Ives, Cambridgeshire
Returning to better times, its strategic alliance with There are lots of potential distractions right now –
Carrefour and launch of new discount supermarket the integration Argos and, of course, the proposed
brand Jack’s show it has no plans to ease off. ‘Sainsda’ merger.
CEO Dave Lewis has been a breath of fresh air since his Sainsbury’s focus on extending the general merchandise
tenure began in 2014. He’s focused on getting the basics right: raising offer in its bigger stores has impressed. For us, it’s the most
store standards, ensuring product availability, improving customer comprehensive of the Big Four. When it comes to its food offer, its deli
service and strengthening ranges. Stores are also much more counters are a hit. Its premium “Taste the Difference” range is a legacy
noticeably free from previous POS clutter and feature more focused and from a previous rebrand in 1999, but in terms of offer it’s a strong as
targeted offers. ever. So too is its Nectar Loyalty Scheme.
For us, the Tesco logo is in desperate need of an upgrade, with Sadly, there’s much to do. General store standards are in
the red, white and blue pips being very dated. Though strong at launch, decline and the integration of Argos instore has been unimpressive.
and received well, The Food Love Stories campaign is also becoming Investment is essential. And please, remove the top stocking on
less credible. As for F&F: it’s very inconsistently executed, with sale shelves instore. Tu Clothing appears to be suffering from an addiction
racks often near tills giving the brand a feel of ‘giving up’. General to permanent cut price promotions. We’re also not entirely sold on the
merchandise is old school – typically presented and in aisle – and ‘By Sainsbury’s’ own brand food labelling. Sainsbury’s once ‘owned’
needs a shot in the arm. private label brand design, but has lately given this prize away to
Waitrose and M&S.
Food Offer Average Rating General Merchandise Offer Average Rating
Score
Score
Waitrose &
Partners
Iceland
Waitrose
Aldi
M&S
Iceland
Waitrose
Aldi
Asda
Co-op
Lidl
Asda
Co-op
Lidl
M&S
Sainsbuyr’s
Sainsbuyr’s
Waitrose &
Partners
Tesco
Tesco
Back Source: Visual Thinking Team: Sample Size 20.
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8
The Performance Issue 8
Store Experience Average Rating
Profits are down following price decreases and
uncertain times lie ahead as Walmart prepares to
offload the business.
ASDA’s Extra Special range is a masterclass in premium branding,
Score
with a mouthwatering menu and attractive, high-end packaging. We also
love their new ‘Starts with A...’ advertising campaign – a clever way of
emphasising their food credentials, promoting the quality of their products
and also giving recipe and meal ideas to customers, succinctly and
enticingly.
Iceland
Waitrose
Aldi
M&S
Asda
Co-op
Lidl
Sainsbuyr’s
Waitrose &
Partners
Tesco
The general store ambience needs work, to lift it from the
doldrums. Stores have lurid colours and the atmosphere feels cheap –
and not in a pleasant ASDA price way. The George Clothing department is
crying out for an overhaul, with declining presentation and store standards
reflecting a lack of inspiration in the brand. Investment has fallen, so too
the customer experience. Customer Service Average Rating
Under the stewardship of CEO David Potts, the
turnaround of the business continues to impress even
Score
its biggest critics.
The new-style store concept is a winner, but improvements to
existing stores have also caught our eye, with the revamped formats being
more modern and relevant. We’re also impressed with the new Food to Go
concept at the front of stores. Market Street remains the retailer’s defining
Iceland
Waitrose
Aldi
Waitrose &
Partners
M&S
Asda
Co-op
Lidl
Sainsbuyr’s
Tesco
USP. Clever advertising in the Morrisons Makes It and family values
campaigns have helped to underline their proposition.
Ranges are too inconsistent across the entire product Retail Execution Average Rating
proposition. Its kitchen shop needs improving, and the instore delivery of
Nutmeg Clothing feels like a dated effort compared with competitors. The
stores also feature way too many offers, and still focus heavily on their CDs
and DVDs.
Score
The rise of discounters continues, with UK sales
exceeding £10bn for the time and 1000 stores target
by 2022.
Waitrose &
Partners
Aldi stores are easy to shop and we love the new-style
Iceland
Waitrose
Aldi
Asda
Co-op
Lidl
M&S
Sainsbuyr’s
Tesco
stores with their ambience and improved look and feel. Product
packaging radiates design quality. Their food quality, in particular the
fresh veg, is nothing short of amazing. The wine department is going
great guns selling low-price, high-quality bottles. In fact, we’re generally
impressed with their focus on investment and the way they do business
VM/Presentation Average Rating
day to day.
Sadly, their general merchandise offer has poor presentation,
undoubtedly the least effective part of the whole store. Aldi needs
to keep its staying power too, as standards can slip a little towards
closing time. The till points are too small and the checkout too fast –
Score
there’s nothing like 20 onlookers watching you speed pack. Stress!
Iceland
Waitrose
Aldi
M&S
Asda
Co-op
Lidl
Sainsbuyr’s
Waitrose &
Partners
Tesco
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Source: Visual Thinking9
The Performance Issue 9
The Co-op set out its plans for 2018 as the The store-in-store tie-up with The Range has been
year began, with a £160m investment earmarked big news, with the potential to be another industry
on 100 new food stores. game-changer.
Its Revitalised Dividend Scheme is a real winner, with 5% of money The retailer is pulling no punches in staking out the high ground for
spent on own-brand products going into your membership account and recognition in innovation and quality. Its ambitions are admirable as it
1% to local causes. The retailer has also – thankfully – rediscovered and sets out its proposition and carves its own niche in the market. Social
recommitted to its ethical standpoint, after what could be described as media is engaging at all levels, too.
‘corporate vandalism’ under previous (dubiously termed) leadership.
The whole store experience needs a good overhaul
Their big stores are not as effective as the neighbourhood – even the newer ones. There’s way too much POS and promotional
ones. And there is a distinct lack of cohesive national identity, with one of noise all competing to be heard, from new ranges, deals and offers to
the most confusing branding (and many derivatives) out there. Its various multibuys and special buys.
generations of regional/group formats present a muddled image, not an
effective or cohesive way to promote the business.
Perhaps seeing innovation as its differentiator. It’s still good, but could it be even better? M&S
Its too-good-to-throw-away fruit and veg box trial believe so, drafting in Stuart Machin to revamp its
has caught attention. food ranges.
The new instore bakeries are a thing of beauty, with a fantastic range There’s so much to love about M&S. The food quality
of breads and pastries on offer. Like Aldi, Lidl’s wine department is also is divine, faultless and delicious. Store ambience is great, beating even
going from strength-to-strength, offering shoppers great bargains on a Waitrose for distinctiveness in design and aesthetics. We love the front
wide range of world wines. The ‘Dream Big with Lidl’ advertising campaign of store themes and events, and shopping there is a joy – it’s fast and
was also a real standout before the World Cup, with cheeky kids imparting easy. They have a sophisticated approach to advertising and packaging,
their wisdom to footballers. all professionally joined up with no sharp edges.
In a word, lots. Compared to its counterpart Aldi, they We’ve noticed more and more offers and promotions creeping
seem far less focused and need to implement a much more joined-up in, which is starting to grate. Wine is on the tiredly permanent 20%
approach across the whole store. Unfortunately, this lacking makes a big offer, which quickly loses its appeal. Meal Deals and Dine In are ten a
– and negative – impact on perceptions of competence and quality. Like penny, so to speak, and again start to lose some of their magic through
Aldi, store standards fall below towards end of day – caution! ubiquity. The retailer could ramp up the instore tasting experiences to
encourage shoppers to ‘try something new’ and experiment.
It will hope the launch of its new ‘Waitrose & Partners’
identity is just the start of a fresh future and
improving fortunes.
Overall Ranking Average Rating
The Duchy Organic and Waitrose 1 ranges are high
watermarks – even Waitrose Essentials is noticeably better than the
main ranges at other stores. The retailer wins on providing inspiration
for shoppers out-of-store. Waitrose Inspiration is packed with lifestyle,
cooking and exercise tips and advice, and competitions, while the free
Waitrose Food magazine for myWaitrose members features recipes and
articles from chefs and food writers. Waitrose’s social media overall gets a
big thumbs up from us.
Waitrose needs to return to its pioneering roots, innovating first
Waitrose &
Partners
Iceland
Waitrose
Aldi
M&S
Asda
Co-op
Lidl
Sainsbuyr’s
Tesco
and faster with new ranges and concepts, and shouting louder about
them. It needs to work on making the shopper feel special again – with
basics like pack at checkout and carry to car. The coffee shops are too
busy and slow, while the Garden offer has long since lost its charm.
Our Top 3 Retailers
1. M&S Food
Back 2. Waitrose Next
3. Tesco
Source: Visual Thinking10
Rotten Tomatoes
If I was judging innovation performance on a singular demonstration of
We know UK grocery retailers can innovate, best practice, Morrisons St. Ives store would have ‘won’ 2018 hands
but they still have a lot to answer for in the down. But as truly good as this store is, its other concept shop (opened
at the same time) isn’t. The concept is the same. The delivery is
consistency stakes. So what’s a retailer to do? markedly different. Here, the potential of a great.
Today’s new generation has vastly different consumption habits than its Consistency is very much my word of the moment. Acknowledge and
parents. Their expectation of food retailers has changed too – seeking celebrate achievements by all means. But what does success look
out experiences that are attuned to their ‘new ways’ of both eating and like in the hundreds of other stores in your estate? Almost without
buying food. Grocery retailers have been struggling to catch up and still exception, the major grocery retailers must get smarter at identifying
have a long way to go in their attempts to shake off ‘90s thinking’ about the changes needed to improve consistency of retail execution.
how people shop for food.
Contrast this to the likes of Aldi and Lidl. Both continue to impress. Like
Credit where credit’s due…there have been pockets of outstanding a McDonald’s franchise, they are spreading across the UK, backed
innovation by the grocery giants in recent years. However, their stores by a rapid and aggressive rollout programme. More importantly, each
as a whole have largely stagnated. Some will likely disagree with that store is landed with franchisee-like levels of consistency. During
statement. But the true test of success in this industry is achieving critical Tesco’s land grab heyday, it also opened stores at a rate of knots. But
mass and few of the recent innovations really have landed nationwide. the tireless consistency and efficiency of both Aldi and Lidl is on a
different level.
So in the absence of innovation, what can retailers do? For me,
there remains an ‘elephant in the supermarket’ – one that must be I’m not decrying the importance of new concept stores – they’re
addressed. With focus diverted on delivering isolated examples of essential for the future. Their role in supporting innovation and
newness, retail execution within many existing stores is floundering. conducting test and learn activities are hugely valuable. My concern
Factor in ten years of austerity and a low price environment and it’s not is that substandard retail execution is still an all too familiar story. The
surprising that the general quality of store experience has stalled and halo effect on financial performance from a new store concept will only
for some brands is in decline in real terms. extend so far and stakeholder enthusiasm will soon be dampened.
What’s needed now is strong leadership, with senior management
For me, the answer lies in going back to what UK food retailers used to endorsing the necessary support to ensure that the transformative
do so well. Our supermarkets were highly respected for the precision effects of positive change are felt throughout the business, consistently
with which they rolled out the execution of their retail concepts. Today, – in every store, every day
the experience is far from being on point. Worse still, for UK
shoppers making the regular visit to their local supermarket, there is
often huge disparity in retail standards between one store and another
– even within the same chain. Karl McKeever
Founder & Managing Director
Visual Thinking
If online is about convenience,
instore has to be all about
the experience
Karl McKeever
Visual Thinking
Back Next11
11
Big Eats
The Performance Issue
What are some of the big trends currently shaping UK grocery
retailing? Here are just nine… as food for thought.
#1 Ethics
Sustainability and ethics are the big story of the moment.
Supermarkets have lost our trust from an ethical perspective
but aren’t working hard enough to improve their brand image from a
sustainability viewpoint either. Headlines for the Big Four in recent years
have not been favourable. Take, for example, the false accounting scandal
at Tesco’s and the recent proposed merger of Asda and Sainsbury’s,
neither of which have sat well with the British public.
#2 Packaging
Plastic waste is pretty much dominating the eco-headlines lately.
But what is being done? One option mooted is to double the
price of carrier bags. Yet why are we still not packaging-free in the fruit
and veg section? Beautifully stacked produce displays are standard in
Australian supermarkets but are rarely seen in the UK. Meanwhile, smaller
companies like Bulk Market are already paving the way, pioneering zero
waste. There’s no doubt: it will become the norm. So why isn’t this being
championed by at least one of the big UK supermarkets?
#3 Provenance
The Lidl Surprises campaign has been a hugely successful
campaign. People buying cheap mass-produced product
Top Image | Cumbrae’s, Toronto
Bottom Image | Eataly, New York
are pleasantly surprised to hear directly from local farmers. And with an
increasing focus on food provenance, keeping it local is a winning tactic.
There are enough small brands in every supermarket for them to highlight
artisan products with interesting backstories – meeting customer demand
#7 Food Demos
Instore food demonstrations have been taken to a new level in
other retail sectors, so why do traditional supermarkets still insist
and reaping commercial benefits. on handing out tiny food samples on a tray served up by disengaged
staff? The potential for immersive food experiences is huge and currently
#4
Health underused. Fortnum and Mason recently celebrated National Burger
Vegetarian and vegan eating are on the rise. With people more Day with a burger bar. So why not introduce pop-up experiences or mini
aware of nutrition and food intolerances, big supermarkets are festivals instore? Or allow small suppliers to demonstrate their products
catering for them, but still not championing them to the extent they could and highlight brand stories – providing a great halo effect for the retailer.
be. The free-from aisle has a long way to go to be anywhere near exciting.
#8
Health food stores are leading the way, adopting new trends such as the raw Doing it for the ‘Gram
or fermented food movement. Wholefoods is the place to go for these. With Social media is one of the biggest consumer influences today.
Amazon now at the helm, once-niche food categories are more accessible to And food is a big conversation on these channels. Anything
the masses. Supermarkets need to create dedicated areas for these products that allows people to document their experience online is going to drive
– almost shop-in-shops, with clear POS and product information – making footfall into the store. Supermarkets underuse the Instagram factor – with
them desirable destination spaces, instead of appearing as an afterthought. few stores set up to truly engage visiting influencers with huge followings.
Take the British Museum of Food. The whole experience is set up to be
#5 Community
The People’s Supermarket in Holborn was set up as a social
enterprise to provide the local community with good, cheap food.
visually appealing, immersive and exciting. It would just take a tiny bit of
this ingenuity to create some wow factor in supermarkets… glow-in-the-
dark ice cream samples would be an absolute conversation starter. Make
Grocery bills can be discounted by working a few hours a week at the your own ice cream – a way to keep the kids happy while you shop? And
store. This is the antithesis to large corporations. However, the retailer could you can bet all of it would be documented on social media.
more effectively harness some of this community spirit ethos to encourage
#9
customers to make food bank donations and do charitable work. World Foods
The World Foods aisles in supermarkets vary, but overall they
#6
Mobile Payments tend to be destination areas, only used if you are looking for
Sainsbury’s is the first UK supermarket to trial check-out free a specific food, or if it’s your native diet. There’s plenty of scope to turn
shopping in Clapham, London. Similar to Amazon Go in the these spaces into cultural celebrations. Ichiba, the recently opened
US, the aim is to make food shopping a more streamlined visit. None of Japanese store in London, is a great example of how a marketplace
its competitors seem to be progressing quickly enough with payment-free combined with restaurant can create an inspiring environment that
shopping – but it isn’t going to go away. becomes a true destination.
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Prime Cuts
A year since the Amazonisation of Whole
Foods Market, delivery may be super fast but
customers, it seems, are not getting such a
prime deal from the instore experience.
In just over 12 months, Amazon has all but taken over the messaging
space within Whole Foods. “Prime Member Deal” promotions are
everywhere. So much so, it’s easy to forget that this is a food store at all.
Whole Foods has always been renowned for its fresh produce with
all organic labelling. Now? It’s unclear. Prime membership numbers
among its customers is up. However quality, and more importantly
satisfaction among loyal shoppers, appears to be down.
The retailer has received unusually high levels of criticism from furious
customers who claim produce has turned ‘depressing,’ and ‘barren’.
Some have cited persistent out-of-stock issues and food not lasting
as long. The blame is being firmly placed at Amazon’s door and
worryingly, some customers are abandoning the grocery retailer. Whole
Foods remains adamant that nothing has changed. Whether the dip
in quality is real or perceived is irrelevant. For any successful brand,
perception is often everything and customers feel Amazon has eaten
Whole Foods and all it stands for.
While it may have recently invested in adding 20,000 new vehicles to
its delivery fleet, elsewhere Amazon is reducing cost by standardising
ranges across all stores. Centralised buying decisions means less
regional autonomy and fewer local products (often a big hit with
shoppers) in favour of more commodity ‘ordinary’ brands. While price
reductions are appreciated, they shouldn’t be at the expense of quality.
It’s what Whole Foods built their brand identity around, though many
believe Amazon could unpick its DNA until it becomes just another
regular grocery experience,
Yes, customers love improved efficiency, but they love a great shopping
experience even more. Food is emotive and retailers who strip grocery
shopping down to a functional commodity purchase do so at their peril
Top Image | Whole Foods Market, New York
Bottom Image | Whole Foods Market, Chicago
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Great Taste
Image | © Eiliv Aceron – Unsplash
A roundup of great food finds that are prepared to
perfection. From Singapore to the Netherlands, plus
some of the tastiest home-grown examples that
we recommend you visit, our selection is further
testament to how grocery retail does not have to
be a soulless and sterile experience.
Back
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Ichiba At a Glance
URL: ichibalondon.com
Japanese food and drink on a department store Founded: 1976
level, featuring a multipurpose grocery store, bakery, Location: London
fishmongers, butchers, as well as dining areas and
homeware.
What do we love?
Europe’s largest Japanese food hall arrived in Westfield London earlier
this year. Inside, you’ll find from over 3,000 products including lots
Japanese staple ingredients and kitchen bits.
There’s plenty to inspire your cooking, including hard to find
confectionery and sake, fresh handmade sushi, noodles and curries,
Japanese street food, unique gifts and homewares and a dedicated
Japanese bakery and café.
Aside from the food stations and shops, there are “theatrical kitchens”
where you can watch cookery demonstrations and workshops. In the
future, there are also plans for sake tastings, regional food and drink
festivals and other events.space wisely matters.
At a Glance Eat 17
URL: eat17.co.uk
Founded: 2007 The independently owned and multiple award-winning
Location: Hammersmith group of restaurant and self-proclaimed ‘not your
average store’ convenience stores.
What do we love?
The Eat 17 revolution started back in 2007 in Walthamstow in a run
down unloved shop. We love Eat 17 primarily because of the ethos of
the business. It’s commitment to making every department the best
it can be is clear to anyone who visits not just its Walthamstow store,
but the other four that have since joined its retail estate.
The company itself states that it is dedicated to doing things the right
way; thinking local, prioritising people before profit, taking great pride
in its work and, most of all, putting proper food on your plate. And it
certainly delivers. Its fifth store, in Hammersmith, opened this summer
and features indoor street food market booths and yoga classes.
Its sixth store, in Leytonstone, opens in September. Its entire
ethos is about having interesting, innovative, unique local, seasonal
ingredients and seasonal products, but at the same time
offering everyday value (many of which are Tesco price matched): a
winning formula.
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Jasons – The Gourmet Grocer At a Glance
URL: marketplacebyjasons.com
The high-end chain supermarket owned by Cold Storage Founded: 1975
with stores in Singapore, Taiwan and Hong Kong. Location: Singapore
What do we love?
Far removed from Singapore’s open-air hawker centres, gourmet
grocer Jasons is one of the best places to shop for exclusive niche
brands and gourmet deli products. The enclave of all things trendy,
exotic and exquisite, its approach to food presentation is both
distinguished and luxurious. Located in the classy end of Orchard
Towers, Jason’s is one of Cold Storage’s higher-end ‘Marketplace’
solutions to posh grocery needs. This supermarket is geared towards
expat demands and international palates, so stock up on PG Tips or
prowl around the wine cellar.
At a Glance Bulk Market
URL: bulkmarket.uk
Founded: 2017 The new permanent Bulk Market store in Hackney is
Location: London a stone’s throw from a nearby Tesco supermarket, but
the contrast couldn’t be more different.
What do we love?
It’s been described as a wartime shopping experience, but this is a
retail concept that’s truly of-the-moment rather than past its sell by
date. After all, what’s not to love about a packaging free grocery store?
As a business, it fervently supports the principle of the Closed Loop
sustainability. It prides itself on not overstocking and not wasting food
or resources in disposable packaging, with most of its produce is UK
grown and comes from a radius of under 50 miles.
There are no plastic bags – obviously – so take you own jars to top
up, or use compostable bags and weigh out what you want. There is
even reported to be plans for an on-site beehive, a commercial grade
composting machine and a community area for workshops and talks
to educate people on what else they can do to reduce their household
waste. This is an innovative retailer with ideas much bigger than its
physical size, and we applaud it.
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Albert Heijn XL At a Glance
URL: ah.nl
The Netherlands has become a haven for fresh food Founded: 1887
retailing, and the latest revamp of Albert Heijn XL food Location: Eindoven
format doesn’t disappoint.
What do we love?
We’ve been big fans of the innovative Albert Heijn XL food format
since it first launched back in 2002. Freshness adds to any food
experience and in 2016, it became the first supermarket in the
Netherlands to launch instore farming with the arrival of its ingeniously
made Help-yourself Herb Garden.
The result was stunning. Its revamped XL store in Eindhoven is
evidence, if it were needed, that better is possible; moving the
supermarket away from simply a place to complete functional grocery
shopping to being a proper foodie destination for the 21st Century.
The food theme is all about experts and instore preparation.
The food market is a series of island stalls, beautifully cross-
merchandised with abundant market style produce displays. Most
islands are manned preparation stations, with on site chefs for pizza,
sushi and kitchen. A fresh prep juice bar sits at the heart of the
produce department.
At a Glance Naturally
URL: naturally.ltd
Founded: 2018 Frustrated by the offering from others in the sector,
Location: London new grocery retailer Naturally set out to supply the
local community with simple, fresh, delicious food, at
an affordable price.
What do we love?
Situated on Holloway Road, Naturally is a true treat for London food
lovers. Its reminiscent of As Nature Intended stores, but an altogether
more elevated offering. Opened in March 2018, it offers quality
smaller, independent label produce with a transparent supply chain at
an affordable price point.
We were charmed by the fact that knowledgeable employees are to
hand, with the focus on acting as advisors rather than sellers. Natural
materials abound throughout the store design, reinforcing the brand
proposition. We particularly love the ‘Unpackaged Zone’. Featuring
self-service dispensers for grains, cereals and pasta, it’s designed to
reduce waste and encourage reuse of pouches or jars.
A sense of community is also at the very heart of this store, with
a community table and window table encouraging interaction and
extended dwell time
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Organic Roots
Daylesford Organic began as a simple
passion for real food and a desire to feed
children better. Today, it is more of a
‘movement’ than just a seller of premium,
organic groceries.
Founded in 1988, Daylesford Organic has an impressive
number of successful operations. As well as its award-
winning organic rural farm shop, it has food stores in
London, runs a French chateau producing wine and olive
oils, a cookery school, floristry workshops, Bamford
fashion stores, the Bamford Grooming Department City
in Edinburgh, self-catering cottages, spa retreats and a pub. Not to
mention the Daylesford Foundation, which provides support to help
young people learn about organic and sustainable practices.
Its owner, Lady Carole Bamford, is the driving force behind the
concern, starting the venture with her ahead-of-the-curve enthusiasm
for organic food. As well as being an environmentally active holistic
enthusiast, she is seemingly not one to ever rest on her laurels and
follows a ‘and what’s next?’ approach.
Living and breathing brand values
Set in the heart of Gloucestershire, every element of the Daylesford
experience reinforces the brand’s values, from the vibrant green apple
trees that welcome visitors to the electric car charging points as you
park. Not to mention the recycled paper shopping ‘bags’ that look like
you are carrying a Hermes sac. Do they know their customer? You bet
they do.
Inside, you can buy everything from groceries to hampers, cookware,
homeware, gifts and garden products. Daylesford food and products
are not particularly obscure, unusual or even fancy. This is a
demonstration of sensational food and artisan skills at its best.
Art of presentation
What makes everyday articles and food items special is the form of
presentation. Stories have been created out of inane products. Eggs
displayed in a ‘just been laid’ approach. Bread cascading out of crates
as if just spilled from an oven – each area in itself is like turning pages
of a storybook: simple yet captivating and inspiring.
Images | Daylesford Organic Farm, Gloucestershire
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The point of difference for us is Daylesford’s cleverly designed and
implemented ‘rooms’. From the exquisite Cheese Room to the ambience,
artisan and ownership displayed within the Tea Room. Meanwhile the
café offers own brand tea, which comes with a variety of health benefits,
presented with a timer so you can achieve ‘the perfect cup’.
In terms of visual merchandising, there is an abundance of strong
balance between blocked product, colours, themes and stories. This
is at its finest in the ‘seaside’ inspired general merchandise range.
Mixing soft grey, ocean blue and warm beige hues with braided basket
lampshades, textured cotton and linen, it oozes tranquillity and comfort.
Daylesford delights in the freshness of service factors too. Its people
are confidently welcoming, and have clearly been empowered to be ‘on
the ground’ owners of the brand. Would it necessarily work in a more
mainstream store? No. The crucial point here is that service is perfectly
attuned to match customers’ expectations.
Retreat for the senses
Surroundings aside, it’s easy to forget you are in a farm shop, not a
department store. The selection, quality and calibre of presentation,
of both product and people, really is that good. A day at Daylesford is
like being at a retreat – gently adapting your mind to an organic way of
thinking. Being a customer in the store has refreshing effects; making
you feel you could live differently, become a florist, gardener or cooking
professional.
Whether it’s the beautiful fruit and vegetables, which never look tired or
damaged or even out of place, or a carefully browsed and selected urn
of tea – you leave truly wanting to ‘buy into’ the brand. You just have to
take a piece of it home.
This is a progressive brand, and to the trained eye one that’s constantly
moving forward. Yes, it is indulgent, extravagant and certainly from a
price perspective, out of reach for everyday people and families. The
connection and immersive qualities are delivered with steadfast ‘built
in’ inner confidence. And the result is remarkable
Images | Daylesford Organic Farm, Gloucestershire
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Deli-cious
Just how do you turn the weekly shop into a pleasurable, plentiful and people-focused experience?
Two family-run grocery retailers, in Portugal and Germany, believe they have the answer.
Apolónia Zurheide Feine Kost
There is an undoubted and growing trend for high Family owned German mini-chain Zurheide Feine Kost
quality, niche, boutique supermarkets that specialise in is no ordinary supermarket. Opened in March 2018, its
fresh and regional indie grocery brands. Sadly, outside latest high-end ‘Food Adventure’ store offers a glimpse
of Booths, the UK has little to offer in this respect. Travel beyond our into what the future of supermarkets could look like. Impressive.
shores and you’ll discover many great examples that demonstrate
just how much we’re being short-changed by many of our nation’s The store’s motto translates as ‘We love food’. And they do. Here,
supermarket experiences. customers can watch live food preparation and see Italian chefs
making pasta. A particular highlight is the oil pressing station where
Portuguese boutique supermarket Apolónia is a stunning example experts give live demonstrations about how walnut oil is extracted.
of grocery best practice. The retailer began life in 1983 as a humble As well as the expected fresh departments, dairy, frozen foods and
mini-market. Now it boasts over 300 employees and has ambitious grocery categories, it also features an eclectic array of eateries and
expansion plans – while still retaining its family-run philosophy. bars, everything from a premium beef bar to a vegetarian restaurant.
Its proposition genuinely impressed us and that’s no mean feat for a It’s all done on an unprecedented scale, too – with three times the
business that visits as many stores around the world as we do each product selection of a typical supermarket. This isn’t pile-it-high stuff.
year. Instore, there’s a whole range of edible wonder. It serves up the Attention to detail instore is breathtaking. It’s expansive, refined, cultured
right mix of basics, smaller hard-to-find specialist indie food brands, and lavish. In stark contrast to the UK’s big food retailers, this is a
a sushi counter and, of course, great service. It’s exceptional Beer sizzling and sparkling example of how to get grocery retailing so right.
Wine & Spirits department is also one of the best we’ve ever seen in a
supermarket. Something for UK retailers to aspire to, that’s for sure. During our visit, retail standards were visibly and proudly maintained.
The methods were subtle, with each product type tastefully and
discretely differentiated through design. Refreshingly, there is an
emphasis on imaginative VM and display features, rather than
promotional activity
Apolónia in numbers: Zurheide in numbers:
Founded: 1983 Founded: 1977
Stores: 3 Stores: 8
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Seasoned Well
retailers – brilliant innovation backed up by clever marketing, but not
The hottest food story of this quite connected at store level. And retailers must – and it is a must –
summer was, arguably, the M&S close this loop. Upstream efforts only work effectively when you go into
store. Be warned: don’t fall at the last hurdle.
‘Best Ever Burger’.
Seasonal success
A year in the making, the M&S ‘Best Ever Burger’ has been tantalising The summer has drawn to a close. However, all retailers must still sweat
the nation’s tastebuds during this year’s unseasonal hot weather. their promotional calendar to its fullest, working hard to (seemingly)
With the much-criticised retailer facing high-profile headlines of store effortlessly pull one activity into another. With this in mind, how will
closures, it was heartening to see them investing in innovation. M&S capitalise on its summer success in the run up to autumn’s
food events and the biggest meal gathering of the year at Christmas?
All the right ingredients There has to be a ‘what next’ – not just sitting back enjoying a one-off
When it came to the Great British BBQ, they owned the category hands accomplishment.
down. This was not just a burger. It was a gluten-free M&S burger made
from prime cuts of British beef, with a hint of bone marrow for extra Savvy grocery retailers can learn many good lessons from M&S and
flavour. It truly was M&S at its best ever; a perfect demonstration of its ‘Best Ever Burger’. Even more savvy ones will look at what could
what the retailer should represent – innovation, leadership and quality. have been done to deliver even better results. This means an intuitive
connection with shoppers, investing in product innovation they don’t
Joining the dots know they want until they see – or taste – it. It means not leaving
advertising and PR campaigns hanging, but using cleverly joined-up
But could they have stepped up even further? In short, yes. It’s been
thinking to maximise success instore. It means segueing success from
the hottest summer in years and there was plenty of scope to really
one campaign to the next in a fluid transition. That’s when retailers
ramp up the BBQ angle, for example giving away mini burgers through
really can claim to be the ‘Best Ever’
BBQ activations in front of stores. It’s a problem faced by many large
#1 Officially the retailer’s best-selling new
product of the summer
160% The M&S ‘Best Ever Burger’ was a roaring
success, with sales exceeding all initial expectations
40% of Brits say they enjoy burgers year-round
2M Brits eat home-cooked burgers at least
once a week or more
9/10 Brits say that the most important thing about a
home-cooked burger is the quality of the meat
61% of Brits choose tomato ketchup as their
preferred condiment to accompany their burger
36% of Brits choose tomato ketchup as their
preferred condiment to accompany their burger
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My Beef
Very few British food retailers are swimming upstream at the moment.
With so many competitive pressures in UK What I do find fascinating is that a lot of the more interesting
grocery, you would expect some of the developments are coming from retailers that sit outside of the
traditional press narrative around ‘the supermarket industry.’ And lots
incumbents to be raising their game to deliver of these initiatives are increasing the amount and quality of choice
greater differentiation. Repeatedly, shoppers available to shoppers.
are left disappointed. I have in mind here smaller regional players like Jempson’s, doing
a great job in supermarkets and c-stores down in Sussex; Booker
Over the last year, I’ve said ‘wow’ precisely four times walking into opening Chef Central concessions in Tesco; a retailer like B&M which is
stores in the UK (Morrisons St. Ives, Iceland Food Warehouse, aggressively expanding into grocery through range enhancements and
Battersea General Store and Eat 17). Contrast this to my trips to the opening B&M Express units; and even Costco – which isn’t technically
USA, Poland, France, Spain, Portugal and Germany, where some a retailer – but certainly looks likes one to me.
staggeringly good retail is on display and I’m frequently slack-jawed at
the sensory joyfulness of the store designs and merchandising. Off the top of my head, I can think of about 45 different retailers that
When I first started in this business, the UK was renowned as the I could feasibly buy ‘grocery’ items from (before I even start looking
home of the best supermarkets on the planet. Markets like France and online) – suggesting that there is no shortage of competition in the UK
Germany were regarded as abysmal. People would travel from around sector. Some of the bigger incumbents are introducing new concepts
the world to look at Sainsbury’s stores: I’m not so sure that happens too, I’m thinking Tesco and Jack’s, Asda with its concept in Didcot
much these days. and Iceland aggressively rolling out the Food Warehouse concept,
suggesting that the majors are active in providing further options for the
Instead, folk are travelling to Dusseldorf, Eindhoven, Madrid, Warsaw, UK’s grocery shoppers.
Paris, Porto and Chicago to see what good looks like. To see what
retailers looking down the barrel of ferocious competition from Aldi, That said, the Big Four need to remember that the bulk of their
Lidl, Biedronka, Mercadona and Walmart are doing to surprise and business comes from their existing stores rather than new outlets
delight their shoppers. and that some of these legacy stores are looking fairly jaded indeed.
My travels prove that bringing a bit of theatre and inspiration instore
In UK supermarkets, I’m infrequently surprised and rarely delighted. needn’t be expensive. Given that shoppers invest time, money and
The market seems set on becoming a homogenised morass. A bloke emotions when they buy groceries, and in a market where the price
who knew a thing or two about running some shops was Sam Walton. war is unwinnable, then making supermarkets a fun place to visit must
He had a rule about swimming upstream: “Go the other way. Ignore surely be the way forward
the conventional wisdom. If everybody else is doing it one way,
there’s a good chance you can find your niche by going in exactly the Bryan Roberts
opposite direction”. Global Insights Director
TCC Global
Past its best
Legacy stores
Price wars
Homogenised morass
Disappointing Pastures new...
CHOICE
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