Fresh Food: The Battleground for Grocery Retail Differentiation Through This Decade

As consumers emerge shell-shocked from their bunkers and household incomes tick up, grocery purchasing behaviour is still in recessionary defensive mode – savvy shoppers rule and price-matching programmes and promotions reduce the effectiveness of differentiation solely on price. Aldi and Lidl have done such a good job on establishing the credentials of their private label products that this ground, too, has become increasingly difficult for the mainstream supermarkets to claim superiority. As a result, fresh food value, quality, range, provenance, innovation, presentation and customer product knowledge and service are emerging as powerful differentiators in an otherwise cut-throat grocery retail environment (M&S’s +3.4% year-on-year sales increase for food shows the power of getting the fresh food offer right, particularly so given that its offer is unequivocally premium).

Aldi - We Love British Poster

Aldi "shouts" in their store how much produce they source from UK

Aldi “shouts” in their store how much produce they source from UK

Through the Summer, we’ll post some short blogs relating to the retailing of fresh foods. The fruit & vegetable and meat departments in retail stores are getting ever more complex – more skus, good/better/best and more private label ranges, pre-prepared meal components (in addition to old-fashioned ingredients!), celebrations of seasonality, homage to the producer, promises relating to “credence attributes” (product benefits the shopper takes on trust, such as free-range, antibiotic-free), etc.  The result can be a transformed, uplifting shopping experience or …… chaos, frustration and a disappointed shopper!

It’s not just in the UK but a global phenomenon that consumers are showing increasing interest in where their food comes from and for multi-faceted reasons, such as:

  • visceral concerns about food safety and food integrity. “Horsegate” and other food scandals/tragedies have cast long shadows across the world and consumers seek reassurance from those that sell them food;
  • preference for “local” foods which may be seen as safer, more environmentally/animal welfare-friendly, contributing to the local economy and to national food security;
  • and reflecting that sometimes we are “fuelies” (“no, I don’t know where the food was produced, Brenda, just eat it up you’ve got ballet in 15 minutes”!) and sometimes we are “foodies” (the meal is special bringing family and friends together and the food is the hero/heroine and we want the full story).

Foodies and Fuelies coexist in one and the same person – the former being more prevalent during the working week and the latter at the weekend – and are not indicative of a schizophrenic personality but rather reflect the reality of busy family lives. Note the extraordinary interest we have in watching cookery programmes and promises to ourselves that we are about to embrace scratch meal preparation juxtaposed with the inexorable growth in sales of ready-prepared, convenience foods and eating out! The definition of scratch cooking has broadened to include bolting together components to make a meal. And should we eat up our fruit and veg. or save time by just drinking it?

So, pay attention at the back and, as our Summer progresses, do join us for our occasional thoughts and flights of fancy on fresh food retailing developments in the UK and other international markets we shall be visiting.

Limited editions of selected or even exclusive products allow grocers like Waitrose to stand out from competitors.

Limited editions of selected or even exclusive products allow grocers like Waitrose to stand out from competitors.

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Posted in Fresh Products
One comment on “Fresh Food: The Battleground for Grocery Retail Differentiation Through This Decade
  1. Dave Boselie says:

    Dear David and Miguel
    Enjoy reading your blogs and can certainly confirm similar trends in the Netherlands: Lidl has won the “Best supermarket in fruits and Veg” award for 5 subsequent by having a high quality low price proposition throughout the year. Now they have established their profile as quality provider they gradually start to expand their profile with the message of being sustainable as well: 100% of their bananas are Rainforest Alliance certified. So, rather than profiling on the niche proposition first they have come in as price competitive quality brand which, by the way, also appears to be a frontrunner in sustainability and local sourcing. A smart and extremely compettitive positioning which makes market leaders like Albert Heijn nervous!!


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About the authors
Prof David Hughes: Around the world, David speaks to senior agribusiness and food industry managers about global food industry developments that are and will affect their businesses and industry. Energetic, engaging, humorous and insightful, David gains the very highest evaluations at seminars, conferences and Board level discussions in every continent he visits. Miguel Flavián: works for several Spanish organisations and companies to help them to learn from the developments of the British grocery market and improve their business back home.
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