Retailers across Europe should respond to the eating-in trend and push private labels forward, according to a leading expert.
Natalie Berg, grocery research manager at leading provider of global retailing information Planet Retail, addressed the Fresh 2009 conference in Valencia on April 29. She ensured delegates that while discounters are making headway, they are still a fraction of the market.
“It is not all doom and gloom,” said Berg. “There is an opportunity for the fruit and vegetable industry to supply discounters, and retailers should concentrate on their private labels to get ahead, as well as responding to consumers eating in rather than eating out in restaurants. Marks & Spencer has done a fabulous job with Dine in for £10, and retailers should look at these kind of offers.”
Berg told delegates that providing value will remain “top of the list” well into 2009.
“The threat is temporary from discounters,” she said. “Grocers have the flexibility to provide fresh and good-quality fruit and vegetables, as well as value for money. Is this sustainable? No, this impacts on margins and there is only so low they can go. Retailers will have to be innovative through private labels…
“Innovation will come through quality, labelling and packaging and if a retailer does this it will be well placed to beat the recession. Private labels means less profit, but it drives customer loyalty. Value ranges are doing well. Value produce is loss making but essential to compete against discounters.
“Discounters are enjoying their time in the sun, but there are still obstacles for them to overcome. They continue to highlight their low prices and pressurise retailers, but they are more of a thorn in the retailers’ sides rather than any real threat. In the UK, retailers are growing rapidly compared to their previous rate of growth but still only control five per cent of the market. The quality message will see retailers through.”
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