UK supermarkets: five opportunities to increase the growth ceiling
Source: https://www.foodfuturesinsights.com/post/uk-supermarkets-five-opportunities-to-increase-the-growth-ceiling
From our global supermarket analysis framework, and our assessment of broader food and drink missions and the opportunities within them, here are our five top recommendations for UK supermarkets to grow beyond their current ceiling.
Increase the focus on fresh
Fresh is emotive. What's more, it creates a very strong link to the product itself. Clearly there is a strong health-led angle driving consumers desire to shop and eat fresh food. And they like solutions - adding part or fully prepared fresh solutions, for the right retailer and in the right locations, can substantially boost the range of functions and missions that a store can meet. .
So our recommendations around this are twofold:
Locate fresh at the entrance to the store and introduce relevant adjacent products - extended fresh sections can play a key role here.
Consider routes to accelerating wider fresh credentials, including more specialist ranges. We've seen great examples in France (Grand Frais), Australia (Harris Farm Markets) and the US (Sprouts Farmers Market) of fresh led concepts playing a major - and typically expanding role - in the market. Intriguingly, Carrefour has recently developed a fresh focused format of its own in France to rival Grand Frais - there's a substantial opportunity for further development here. Furthermore we're seeing more prepared solutions being introduced as part of the fresh section, not least in France and Spain.
Consider new ways to create food-to-go destinations
Right now we're seeing some strong impetus from many different retailers across Europe around this (which will form a core part of our upcoming Europe: food-to-go in retail report). And while ambitions may have moderated across many markets in terms of the extent of the ambition, there's still much development under way and a clear ambition to stretch appeal into more food-for-now missions. We've three top tips in this regards:
Get the environment right. Giving the store a differentiated feel to the rest of the store, and a simple in out customer journey, can make a huge difference to conversion rates here. Seating is also a potential here.
Create uniqueness. There are often competing desires to drive simplicity of operation and expand food-to-go sales. This can clearly create inertia, but in fact considering broader options such as concessions (even beyond sushi) and heat to eat stations for customers to microwave food themselves can be routes through which to enable the latter without compromising the former. Clearly however having a counter as a focal point for the food-to-go offer can pay huge dividends, as the likes of Scotmid have discovered.
Highlight the provenance
Another recommendation inspired by our safaris in other European markets, this time in Spain, and in particular by the fantastic job delivered by Ametller Origen in this space. The business does this superbly well, benefiting from its farming origins, but it's not the only retailer to have its own farms, and the broader lessons from how Ametller celebrates produce in-store have relevance across many different markets. But there's also some great inspiration to be taken from food-to-go specialists such as Farmer J's and, in the US, Sweetgreen in how they communicate the provenance of products and, in the case of Sweetgreen, link the full range of products carried back to named farmers.
Push evening solutions more, and make them accessible
UK retailers have some of the best meal solutions out there and continue to evolve the proposition. But that doesn't mean this is the time to stop learning and to stop being inspired. And especially as we see several other markets where different types of meal solutions - and part meal solutions - continue to sell well across, perhaps, a broader range of customer profiles, ages and missions than those in the UK. One example we've often spoken about with clients over the past year is Seattle's Kitchen & Market chain, designed around offering you a meal for tonight perfectly tailored to your required level of input. But we've also been big advocates of the meal kit and part meal solution development in the Netherlands and, albeit to a lesser extent, in several other Northern European markets.
Develop frozen excitement and upward architecture
We often talk about the growing trend towards convenience. But sometimes that convenience can be defined by opening the freezer door rather than ordering online or visiting the local convenience store. We've witnessed brands such as Cook and byRuby in the prepared meals space delivering some fantastic products. There are more solutions coming through, but in our view there's an opportunity for a lot more to follow. A visit to the frozen aisles in many North American stores, or to the French frozen food specialist Picard, would be our recommendations for inspiration around this. Of course, there's a job to be done in what product to sell, and where to visit in-store, but several recent store format developments in the UK have tested frozen and non-frozen similar products being grouped together. There's a journey to be taken and an opportunity for retailers that are able to.
