Grocery Retail - Key Trends for 2020

The grocery retail market continues to adapt to new competition and shifting consumer expectations. Here, James Butcher, Managing Director of Solutions for Retail Brands (S4RB), discusses the key trends to watch out for in 2020.

• Health kick

Continued pressure on healthy eating, especially with significant demand to reduce levels of salt and sugar in products, will lead to an increase in sugar alternatives. Most own brand retailers and brands have already started to address the more straightforward issue of sugar reduction and, as a result, new alternatives are required.

Ideally these products will be natural, which is consistent with the pressure for ‘clean label’ and therefore we will see growth in the use of natural starch alternatives such as sweet potato, or sweeteners from dates, coconut or fruits.

• A resurgence in frozen foods

Pressure on food waste and packaging waste, combined with improved manufacturing techniques, will present an opportunity for frozen products to achieve a status as ‘the new fresh’.

In many cases frozen can be the best option. The simplest example we see is frozen peas, Birds Eye famously says “frozen within two and a half hours to capture their freshness”. Another is fish, which is often frozen at sea and then ironically defrosted to be sold as ‘fresh’.

Effective consumer education would enable customers to access better products, which are ‘fresher’ and more cost effective whilst also reducing food waste associated with fresh. This is not the case in all categories, but frozen certainly presents an interesting opportunity for retail and consumers.

• Meat free alternatives

I believe there will be a continued rise in the range of ‘meat free’ alternatives to cater to consumers who want to be healthier and more sustainable. This may include ‘faux meat’ like the vegan sausage roll, but the trend is more likely to be a continued increased in plant-based products that will cater to both ‘meat free’ consumers and the increase in veganism.

However, I hope this is also matched with greater education around any potential unintended consequences. For example, the move away from red meat presents a new food waste risk as current supply chains are disrupted. The move towards fish as an alternative has also put new pressures on food systems, making it more difficult for retailers to meet their obligations to sustainable fishing.

• Customer feedback

I hope that 2020 also brings an increased retail focus on omni-channel feedback management. It has always been important for retailers to listen to and engage with customers in order to ensure that products remain relevant, but as customer expectations continue to grow, it has never been more important for retailers to understand their customers’ feedback.

Above all else, retailers need to ensure their own brands are relevant if they are to ensure customer loyalty. Omni-channel is well understood and has been a focus for years, but few retailers really know how to combine and consolidate feedback across channels.

The growth in the importance of feedback from social media in particular is no secret but, as S4RB’s ‘Supermarket Social’ report found, retailers’ keyword analysis can struggle to fully grasp emotion, intent and sentiment. Using machine learning tools, such as Warwick Analytics PrediCX engine, can help retailers introduce positive changes and the use of this technology will become more widespread.

• Upmarket brands

Finally 2020 could see a significant increase in the number of so called ‘fancy’ brands. Own brands continue to be core to fast moving consumer goods in terms of differentiation, and therefore footfall, as well as providing maximum margin. However, as Aldi and Lidl continue to resonate with customers with their broad range of own brands, mainstream retailers will continue to explore the use of premium brands, own brands that don’t necessarily name the retailer but continue to provide differentiation and margins.

Sainsbury’s is one retailer investing heavily in its ‘Taste the Difference’ range. A rebrand of its range, including recipes, packaging and introducing new lines began in 2019 and this is expected to continue into 2020. Expect this theme to continue across the major grocery retailers.

Source: www.kamcity.com, www.s4rb.com