Welcome to The Grocery Trader’s latest quarterly Back of Store feature, bringing you the latest stories from the leading suppliers of warehouse and logistics equipment, solutions and services about what they are doing to help supermarkets, Co-ops and convenience store chains cope with the pressures of the changing retail environment.
The supermarkets have been in the headlines recently, as the retail environment hots up with the rise of what we now know as omnichannel retailing. The British media loves having a pop at institutions that show signs of fallibility, whether it is the big grocers or Manchester United. The reality is that although yes, the discounters are getting stronger, the major supermarkets still have the lion’s share of the grocery market. That said, the retail market place is definitely changing, and the major retailers’ supply chains need to adapt. The common concern they all share is how they address the challenges of omnichannel retailing going forward.
As Laura John, the IGD’s Supply Chain Business Analyst, wrote in April, shopper habits have changed drastically, and changed fast. Traditional supermarkets are now not only competing with each other but also with the new faces of Aldi, Lidl and Ocado. With little or no growth in the more traditional channels, focus has turned sharply to convenience, discount and online operations. Although the majority of UK grocery retailers have operated in all of these channels for some time, the major retailers have to effectively compete in at least one of these ‘hot’ channels to drive growth.
The supply chain characteristics of the convenience, discount and online channels are of course very different to the challenges of supplying a more standard supermarket or hypermarket operation. In Laura John’s words, collaborative partnerships between grocery suppliers and retailers are underway in all the channels, and making a difference to performance.
Such partnerships are very welcome, instead of the old ‘us and them’ antagonism of the past. But the supermarkets and their suppliers also need to restructure their warehousing and logistics arrangements at local level to keep up with their changing supply chain requirements. This will involve investment in materials handling equipment, and in logistics and services. In this feature and going forwards we bring you news from the warehouse and logistics suppliers on how they are working with their customers to help them meet the challenges, and how they can help other businesses.