UK grocers played a pivotal role during the pandemic. Pressure on production and distribution of food during this period was extreme, but the service to shoppers was still considered excellent. Shoppers were, generally, able to get what they needed.
According to the latest Shopper Research Data from the Institute of Grocery Distribution (IGD) – presented by Susan Barratt, its Chief Executive Officer and one of Cold Chain Live’s keynote speakers – demand for food and drink at retail rose 12% during the pandemic, whilst out-of-home food options (restaurants, pubs) collapsed.
More affluent shoppers were feeling good post-covid, but due to inflation increases, all demographics are feeling negative at present.
Fast-forward to 2022, and grocery supply chains are not performing as well as they were during the pandemic, according to IGD’s research. On shelf availability of products over the last 12 months has been at approximately 65%. Prior to the pandemic, it would have sat consistently at over 90%.
Barratt reported that confidence amongst shoppers has hit the floor and concerns over product availability are high. This had led to 90% of grocery shoppers changing their behaviour.
The data shows that the majority of shoppers noted low availability on their last trip and this applies across multiple product categories.
UK supply chains have been hit hard by external events, including an exit from the EU, Covid 19, labour shortages, the war in Ukraine and exceptional weather conditions.
Barratt reflected on the endemic labour shortage at every level of the food supply chain and reminds the audience that “it’s not all about pay.” Location, training and development, flexibility and wellbeing are all relevant to staff retention. If the UK cold chain sector gets these right – and fully embraces inclusion and diversity – it’s more likely to secure the labour pool required.
Data and technology
Logistics is central to the food supply chain and logistics operators must be active participants in the evolutionary process of new technology, warned Barratt. Future logistics will be as much about moving data as moving goods, she adds, and developing partnerships and “eco-systems” will be critical.
Advanced logistics technology is already evident across UK retailers; cosmetics retailer Lush has a 24-hour unattended store in Kings Cross, Asda has introduced an automated mark down system to reduce food waste, Boots has started to use flying drones for medicine delivery and M&S is using a stock checking robot called Connie the Counting Pillar.
A lot of the most critical technology will be less glamorous and less visible to the shopper, developing in the depths of the supply chain. Logistics operators will need to be advising, assisting and innovating alongside their customers, as well as providing a reliable service.
Barratt, whose background is the food supply chain, questioned system durability, and whether it’s time to re-assess stockholding practice. Is the current low-stock, just-in-time approach still optimal? Or would holding more stock, closer to shoppers, increase durability and improve service?
Her final point of the session: yes, there would be financial implications if this were to happen, but if products are out-of-stock, no-one wins.