Supermarkets and the inconvenience truth

Supermarkets and the inconvenience truth

Supermarkets and the inconvenience truth

With Hello Fresh and its demand economy counterparts shaking up grocery retail why are the big supermarket chains slow to respond to the challenge? asks StreetPR’s James Rix

More than 800 jobs will be lost with the closure of 34 Budgens convenience stores – about a fifth of the chain – with the owner of the business, Food Retailer Operations Limited (FROL), citing “difficult” trading conditions as reason for the cut back. The fact that the retailer could find no buyer for the doomed outlets confirms that times are indeed tough for supermarket chains from Budgens to Sainsbury’s. In contrast, the ‘Ubers’ of the supermarket space – Hello Fresh, Gousto, Abel and Cole and the like – are booming. So what can the big guns learn from the new kids on the block?

Just like local convenience stores wiped out market traders and the supermarkets have put many local convenience stores to the sword, will the supermarkets now become victims of their demand economy rivals? Will the convenience store become the victim of hyper-convenience?

This isn’t just about speedy delivery, which in itself has spurned a number of startups taking products from the big chains to your door in minutes, with even Sainsbury’s getting in on the act with Chop Chop. It goes an important step further, delivering the exact ingredients for the meals you want to eat to your door every day, ready prepared and weighed out so you can be enjoying your favourite dish within minutes of arriving home after a busy day at work. No more trips to the supermarket pushing heavy trolleys around, no more overloading your fridge and freezer to bursting point every week, no more flicking through recipe books and wondering if you have all the things you need. Just fresh ingredients sourced locally specifically tailored to the meals you want to eat delivered straight to you.

Hello Fresh, Gousto, Abel and Cole and other disruptors are taking away the pain of trawling round supermarkets, spending hours on Tesco’s website ordering your weekly shop, and the disappointment and annoyance of items not being in stock, by delivering the fresh, high-quality ingredients for the meal you want to eat when you want to eat it.

This is clearly chiming with Millennials, for whom convenience is king – and you can be sure Generation Z will follow suit, if not more so. That’s why the demand economy is thriving, from Uber to Deliveroo to Hello Fresh, and supermarkets, just like traditional taxi firms, will find it increasingly difficult to keep up.

The service may be a little more expensive, but you save on petrol costs, benefit from top quality ingredients and reduce food waste, so it’s no surprise these companies are appealing to more and more to young professionals.

The question is: where’s the response from the big supermarket brands? They appear to be more concerned about competing with each other than with arguably their biggest threat. Only one has so far responded to the new fast delivery services, let alone these new meal ingredient curators. Supermarkets have the suppliers, the food, the delivery resources, the money, in fact the entire infrastructure to challenge their demand economy rivals, yet appear to lack the will to do so.

Where’s Tesco Fresh?

When there’s a movement like this that starts to shake up a market, the traditional players need to wake up and smell the coffee. Perhaps, like juggernauts and supertankers, they find it difficult to change direction quickly and lack the skills to support such a shift, but this inertia could prove critical in the fight to win customers’ hearts and minds.

The dinosaurs didn’t have a choice when the Ice Age came and wiped them out. The big supermarket chains do.

Currently, more and more people are embracing the Hello Fresh concept and only time will tell whether this will become the new normal, but surely the big players have to respond. Have they forgotten that they are convenience stores? Have they forgotten that convenience is king to consumers, particularly as all our lives seem to be getting busier and busier.

When a convenience store suddenly becomes the most inconvenient way to buy food, surely it has a problem. Why continue to open local versions of your brand when you could be disrupting the disruptors?

This space is far from finished. There’s still plenty of room for innovation. There’s still so much potential. Other players are bound to come online and the big name supermarket brands need to get on board fast.

If they don’t, the chances are that they will continue to struggle and we may be seeing a lot more closures like those instigated recently by Budgens.
Supermarkets and the inconvenience truth

With Hello Fresh and its demand economy counterparts shaking up grocery retail why are the big supermarket chains slow to respond to the challenge? asks StreetPR’s James Rix

More than 800 jobs will be lost with the closure of 34 Budgens convenience stores – about a fifth of the chain – with the owner of the business, Food Retailer Operations Limited (FROL), citing “difficult” trading conditions as reason for the cut back. The fact that the retailer could find no buyer for the doomed outlets confirms that times are indeed tough for supermarket chains from Budgens to Sainsbury’s. In contrast, the ‘Ubers’ of the supermarket space – Hello Fresh, Gousto, Abel and Cole and the like – are booming. So what can the big guns learn from the new kids on the block?

Just like local convenience stores wiped out market traders and the supermarkets have put many local convenience stores to the sword, will the supermarkets now become victims of their demand economy rivals? Will the convenience store become the victim of hyper-convenience?

This isn’t just about speedy delivery, which in itself has spurned a number of startups taking products from the big chains to your door in minutes, with even Sainsbury’s getting in on the act with Chop Chop. It goes an important step further, delivering the exact ingredients for the meals you want to eat to your door every day, ready prepared and weighed out so you can be enjoying your favourite dish within minutes of arriving home after a busy day at work. No more trips to the supermarket pushing heavy trolleys around, no more overloading your fridge and freezer to bursting point every week, no more flicking through recipe books and wondering if you have all the things you need. Just fresh ingredients sourced locally specifically tailored to the meals you want to eat delivered straight to you.

Hello Fresh, Gousto, Abel and Cole and other disruptors are taking away the pain of trawling round supermarkets, spending hours on Tesco’s website ordering your weekly shop, and the disappointment and annoyance of items not being in stock, by delivering the fresh, high-quality ingredients for the meal you want to eat when you want to eat it.

This is clearly chiming with Millennials, for whom convenience is king – and you can be sure Generation Z will follow suit, if not more so. That’s why the demand economy is thriving, from Uber to Deliveroo to Hello Fresh, and supermarkets, just like traditional taxi firms, will find it increasingly difficult to keep up.

The service may be a little more expensive, but you save on petrol costs, benefit from top quality ingredients and reduce food waste, so it’s no surprise these companies are appealing to more and more to young professionals.

The question is: where’s the response from the big supermarket brands? They appear to be more concerned about competing with each other than with arguably their biggest threat. Only one has so far responded to the new fast delivery services, let alone these new meal ingredient curators. Supermarkets have the suppliers, the food, the delivery resources, the money, in fact the entire infrastructure to challenge their demand economy rivals, yet appear to lack the will to do so.

Where’s Tesco Fresh?

When there’s a movement like this that starts to shake up a market, the traditional players need to wake up and smell the coffee. Perhaps, like juggernauts and supertankers, they find it difficult to change direction quickly and lack the skills to support such a shift, but this inertia could prove critical in the fight to win customers’ hearts and minds.

The dinosaurs didn’t have a choice when the Ice Age came and wiped them out. The big supermarket chains do.

Currently, more and more people are embracing the Hello Fresh concept and only time will tell whether this will become the new normal, but surely the big players have to respond. Have they forgotten that they are convenience stores? Have they forgotten that convenience is king to consumers, particularly as all our lives seem to be getting busier and busier.

When a convenience store suddenly becomes the most inconvenient way to buy food, surely it has a problem. Why continue to open local versions of your brand when you could be disrupting the disruptors?

This space is far from finished. There’s still plenty of room for innovation. There’s still so much potential. Other players are bound to come online and the big name supermarket brands need to get on board fast.

If they don’t, the chances are that they will continue to struggle and we may be seeing a lot more closures like those instigated recently by Budgens.

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