Future of retail?
Has retail got a future? Yes. Will it be the same as it was? No and yes.
We have been in retail for ever! Jacqui was brought up in a family retail business. Her earliest memories are of delivering groceries with her dad on a Saturday afternoon. Keith was a relative late comer. His first Saturday job was a petrol pump attendant. Earliest memories were cold numb hands from filling cars with petrol all day.
We joined Jacqui’s family grocery business at a time when the future of grocery retail was the giant sheds of the supermarkets and ‘experts’ were predicting the total demise of petrol forecourts. Do we still have grocery and petrol forecourts? Yes. Have they changed? Yes and no!
We were in at the beginning of ‘convenience retailing’. We helped develop the concept. Jacqui became Retail Vice Chair of the National Guild of SPAR representing convenience retailers from across the UK and working with government on multiple retail issues. Convenience retailing became the future of independent grocers and independent petrol forecourts. The multiple retailers were slow to react to this new sector but eventually created their own versions. So the experts predicted the end of independent convenience stores. Has the convenience sector got a future? Yes. Will it be the same as it was ? No and yes, in an ironic twist an independent convenience retailers ( Mohsin and Zuber Issa) have now bought ASDA.
Retail is community…
Good retail, whatever it size or product, is embedded in its community. Our proudest moment was been awarded the UK National Neighbourhood Store Award. Good retail reaches out to its customers, its community and its suppliers. That’s why Tescos and all the other large grocery retailers CSR policies shout about their social impact. It is not a coincidence that ‘community focused’ large grocery chains have survived whilst non community focused fashion retailers such as Arcadia have not.
Retail does not happen in a vacuum. Cathy Parker of The Institute of Place Management is constantly driving the message home that the high street is a community that survives if it meets the specific needs of its ecosystem.
Online shopping is growing because it creates an online community of buyers and sellers that understand each others needs. At the same time speciality shops are flourishing. Holly Shackleton of the Speciality Food Magazine regularly shines a torch on the growth of this sector.
James Lowman of the Association of Convenience Stores advocates that good local retail when it is allowed to open belongs to its local community. We captured many heart warming stories of the difference local retailers made during the lockdowns. We were extremely proud when one of them was recognised in the Queens New Years Honours List. It’s a shame that there wasn’t more recognition for the thousands of local retailers who stepped up to the plate.
Do community retailers have a future? Yes. Will it be the same as it was? Yes they will still be part of their community and no, the ways they interact with their community will change and their definition of local will embrace an online community.
Challenges or opportunities?
Life is full of change. Change is always a challenge and an opportunity. We sold our retail business a few years ago and the challenge was we had no qualification to prove we were retailers. This led to the opportunity to complete a Masters Degree in Business Management.
From the Masters degree, we were then given huge opportunities to work within the HE Sector. Jacqui focused on family businesses, Keith focused on the supply chain. We started PhDs, we worked with government, we lectured, presented conference papers, we developed business programmes and we missed business!
So we started the Guild and went back to working directly with businesses.
One of our first roles as Thomas Jardine & Co was to advise a group of small retailers on how to stop a giant Tesco store been built on the edge of their market town. We are not anti Tesco, we just want retail to have a level playing field. Our role was to demonstrate to the local decision makers the depth and impact of the supply chains to the local retail community. The plans for Tesco didn’t go ahead and it’s satisfying to see how well these local supply chains served the local community during lock down.
As retail develops all retail models face challenges. If the retailer does not adapt to these challenges then a new retailer will see the opportunity and can then eventually replace the old retailer. If the retailer adapts and changes to the new community challenges then they have a future but they will have changed. The retail market is now adapting to a post lock down world (Retail Gazette).
Solving challenges and opportunities.
Retail is about changing to the needs of your community. The best way to solve a challenge or take an opportunity is to do something about it. The hardest thing is deciding what to do and then sticking to it.
The best way of thinking and doing is committing to a peer group. By sharing your thoughts and actions with a group of peers you will both decide what to do and then do it. It is that simple. Find a group of peers and get on with it. We did this via the National Guild of SPAR. What’s more, we are still doing this with the businesses we work with. We are starting new peer groups with the Cumbria Peer to Peer Network. The best thing is that places (for qualifying businesses) are fully funded by the Cumbria LEP. If you are a retailer and want to share your experiences with us and other businesses that are part of your community then do get in touch.
first published in Speciality Food
Is local food the answer for speciality food retailers? Speciality food businesses have to find the balance between representing their food place and encouraging food innovation. Local food makes sense, it brings the food maker and the food consumer closer together. But buying 100% local food would cripple innovation because if we all bought locally, food businesses couldn’t grow by exporting to new areas.
Where’s local food been?
Back in 2012 the CPRE Field to Fork reports warned us that the larger retailers were seriously damaging the local food networks. This was around about the time that the local food movement started to go mainstream and away from activist groups such as Tescopoly.
Today ‘local food’ captures a broad spectrum of food consumers from purists with close definitions of ‘local’ to pragmatists who want the best possible food from the closest possible producer. Local purists can set a specific ‘local’ distance ( in the CPRE report this was 30 miles) the issue with this is a rural area can have lots of producers but very few consumers leaving these producers with a limited market space. One solution is to define local by region or country, so for instance Welsh food opens up the local Welsh market to all the major towns and cities in Wales. The issue with the regional local definition is that a food producer in Hereford is closer to Cardiff than a producer in North Wales but not local as they are English…
Where’s local food now?
Within the mixed definitions of local, the IGD believes that local sourcing fits well into the modern supply chain for FMCG. This is because local suppliers tend to be trusted more by consumers, they can offer a more resilient local supply chain, they are increasingly adopting technology that supports a local supply chain and they offer a transparent and traceable solution. This goes to explain the increased interest in the local food supply chain. So the trade protectionism currently rising under Trump in America may be the reason for what the IFT describes as ‘New Nationalism’ with USA food shoppers increasingly favouring regional cuisine. Or it may be that US consumers are looking to local producers to replace giant food producers/retailers with whom they have lost faith. Similarly, the Food Navigator argues that the growing consumer preference for local food prevalent in Germany and the UK is because consumers hunt down small batch runs from producers who can supply exactly what they need from taste, nutrition, allergens etc.
Where’s local food going?
So local food which was the domain of the specialist food store is increasingly going to become part of the grocery mainstream. This is not a threat to specialist food retailers but an opportunity. Local is open for interpretation by the consumer not by the retailer, so it is up to us as local food suppliers to educate the next generation that local can mean both the small localised specialist and the large regional producers who have kept hold of their food provenance.
Good specialist food retailers already know the best regional / national food producers and should have a solid supply chain relationship with them. Good specialist food retailers are also aware of up and coming local producers who they can nurture and encourage. By supporting established and new food producers the independent food retailers can keep control of the local food supply chain. We (Thomas Jardine & Co) have found most local/regional food producers are increasingly preferring a good local supply chain to the alternative of supplying the multiples.
The future of food retailing is ensuring consumer trust in the product you are selling and the local food agenda is part of this…happy retailing
The rise in consumer interest in the provenance of their food driven by food scares and a desire to understand what we are feeding our children is possibly going to become more polarised into ‘cost conscious’ and ‘food conscious’ consumers. The rise of retail mergers may mean ‘provenance’ becomes a key point of difference for certain retailers.
Retail is changing, Sainsbury and ASDA merging is part of a major shake up in food retail similar to that of the UKs retail banking industry back in the 70s and 80s . The large retail multiples only tend to merge when they run out of ideas to grow their market share organically.
The merging of the banks led to the disappearance of many high street names…first in the banks like Midland, Coutts, Williams & Glyns and later the disappearance of many Building Society Names through to Bradford & Bingley. It was not all closures…there was the appearance of new international players like HSBC and Santander and new startups like Virgin and online solutions …First Direct.
The merger of Sainsbury and ASDA may in some part be to new alliances of other food retailers, specifically Tesco’s merger with Booker which effectively brings many local high street names under one banner (One Stop, Budgens, Londis , Family Shopper and Premier will all be supplied by the new group); the Coops takeover of NISA brings the Costcutter and NISA brand into the Coops supply chain and Morrisons developing relationship with Amazon.
Large mergers are generally made to cut costs which usually means simplifying the supply chain. The discounters (Aldi and Lidl) simplify the chain by limiting choice this allows them to support provenance at a national level (allowing Lidl to promote Scottish Food), Tesco has tended to simplify its supply chain by cutting suppliers and reducing opportunities to celebrate provenance. Morrisons and the Coop both celebrate provenance at a local and regional level using this as a key point of difference.
It will be interesting to see where the focus of the new Sainsbury/ASDA group lies (reduction in suppliers or focus on regional/local provenance). The choice may well depend on the focus of us as consumers and interestingly last month saw the launch of Happerley an organisation focused on promoting genuine food provenance. If you have a genuine desire to see the growth of your local food industry we would suggest you check Happerley out, it was officially launched at the Farm Shop & Deli Show in April with support from amongst others Adam Henson (BBC Countryfile) Peter Jinman (Head of DEFRA Animal Welfare) & Philip Pononby (CEO Mid-Counties Co-operative) and if this works it has the chance to change the attitude of the food supply chain in the UK for ever.
Food provenance should not just be about supporting trendy/exclusive local food it should be about creating a genuine food supply for all that is focused on its area and genuinely supports a local/regional taste for our local high street food offering.
First published in Place Magazine for Revive and Thrive
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