Retailing will have to enter a whole new dimension to serve the next generation of shoppers, according to Joanne Denney-Finch, chief executive of IGD.
Speaking at the annual IGD conference on Tuesday at London’s Royal Lancaster Hotel, Denney-Finch, pictured, said future shoppers will be motivated by increased use of technology and the continuing impact of ethical considerations when selecting products and brands, as well as online shopping.
This projection is backed by the latest IGD consumer research which also points to opportunities for specialist food retailers in smaller premises.
The report said only 31 percent of tomorrow’s shoppers expect to buy all their groceries at supermarkets.
But Denney-Finch believes many consumers will still want to buy some items, in person, anticipating that 50 per cent of the population want to inspect and select fresh produce, as well as meat, fish, and patisserie goods.
She said: “I can see a very natural divide. Familiar products including most well-known brands can be purchased online, but fresh food is a different matter.”
However, within this scenario there will be continued industry competition on price both at the discount and premium end of the market as well as shelf space,” Denney-Finch said.
She predicted the UK market will become more segmented, following the trend set in the US where the high-end retailer Whole Foods, which is expected to make a big impact when it opens in the UK next year, is fast gaining ground.
Whole Food, which is committed to selling only brands which contain no artificial additives, has the highest sales per square foot and the biggest profit margins in the sector.
Denney-Finch said: “The future lies in market-focused stores adapted to a target audience.
“If retail formats fragment then exclusivity will become more valuable.
“This will suit small suppliers with a big reputation and help own-brand suppliers because they are key to retail differentiation.”
Richard Brasher, commercial and trading director at Tesco, agreed the industry is already paying greater attention to detail, highlighting the value of its Clubcard data: “The future is already here, it is just unevenly distributed,” he said.
Brasher said the data collected from its 12 million Clubcard holders can be analysed on an hour-by-hour basis and the supermarket giant is willing to enter discussions with suppliers, with a view to sharing the information.
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