Major grocers soared in the pandemic, but 2022 will be the year of small business

Date: September 21, 2021
Author: David Sables - CEO
Source - The Grocer

The large grocery suppliers fared better in lockdown as consumers stocked up on big brands in their time of adversity. This was not just down to consumers becoming less adventurous when all around them was turning to mush – it was also driven by the retailers’ choice to simplify ranges in their quest to keep a core weekly shop available.

The net effect of all this is major retailer ranges look more like each other’s now than they did two years ago. This goes against their necessity to differentiate, which is not only about thriving through development of shopper loyalty. In today’s pressurised pricing environment, it’s a matter of survival, given the slipping of share to discounters and digital retail formats.

Whilst developing that sense of uniqueness is now a priority again for retailers, many of the smaller businesses who previously helped in that quest are no longer there, or are too committed to models that are no longer relevant.

The reversal of pandemic behaviours is happening now, but not as fast as many suggested. There is a lot of data on what shoppers did, but not so much on how happy they were about it. Trench mentality and stoicism in the moment belies the true self-serving mindset of the average Brit.

Online will never fall back more than halfway, but the substitutions and lack of delivery slots must get better to achieve medium-term loyalty – shopper forgiveness on those fronts has now run out. Profitably reversing the trends in upheaval categories like HFSS, for example, will be difficult for established companies, so a new supplier mindset – or just a new supplier set – is needed.

As the next months unfold, a void of suppliers will emerge. Suppliers, that is, who can provide identity for retailers and are able to meet the new market requirements. This void will represent a huge opportunity for entrepreneurial and dynamic supply businesses. Their innovation will be relevant to the new shopper needs, such as convenience and provenance, and they will rediscover the art of delighting shoppers over simply satisfying basic needs.

They will have increased sustainability credentials, and flexibility to provide exclusivity or private label. Their positioning will also allow for offsetting the forthcoming wave of inflation and combat the rising consumer reliance on takeaway food, whilst balancing focus between the Luddites and social media addicts.

Larger businesses are, of course, not interested in assuming this rifle-shot role. I wonder why they are so against doing so? Why can’t they provide the comfort of big brands while also offering the excitement of local and exclusive points of difference? Sometimes perhaps the juice isn’t worth the squeeze for the big players. The pandemic may have favoured big business, but 2022 will be a great time to be small.