At the opening session of the National Retail Consumer Conference, James Walton, chief economist at the Institute of Grocery Distribution, explored the consequences of the financial crisis on the retail industry.
Although some signs of progress can be seen, Mr Walton argued that the lack of reform raised new questions about the long-term durability of economic recovery.
Despite improvement, 38% of shoppers are still dubious about the recovery, he said. “We are seeing a reduction of pessimism, rather than an increase of optimism.”
Every six months, the IGD conducts surveys asking customers how the crisis has affected them and their shopping. According to these surveys, customers expect to pay more for food and drink in the years to come. However, said Mr Walton, an increasing number of people also prefer to eat out, and for retail co-operatives, this means competition is likely to get even tougher as Britain buys less food.
Food eaten at home has also declined by 500 calories a day for average British shoppers. So, explained Mr Walton, “if you are in the business of selling food and drink for shoppers, it’s not just a financial case. It is a nutritional decision as well.”
Co-operative retailers are facing challenges from both discount stores coming up from below and premium shops from above. To address this, Mr Walton believes retailers should focus on food values.
Trust is another important part of what makes customers choose where to shop. “Trust [in co-ops] proved to be much more robust than expected, but it shouldn’t be taken for granted,” he said.
Looking at the future of the retail sector, Mr Walton believes co-ops should consider investing in omni-channel shopping, providing an immersive and superior customer experience, enabling customers to buy any time anywhere.
“Making omni-channel work is a big challenge, but don’t underestimate the willingness of some big retailers to invest in this,” he said. “Co-ops need to keep up and show that they can do things for shoppers that no one else can.
“There is no room to be complacent.”
More from the conference:
Professor Tim Lang: ‘I have a very sober view of the food system’
Lukáš Nemcik: ‘Get to know the Customer’
Todor Ivanov: Euro Coop encourages European co-operatives to share best practices
Professor Johnston Birchall: Governance lessons from the world’s largest co-operatives
Steve Murrells: ‘We have fallen out of love with food’
Neil Turton: ‘We are a business-owned co-operative’