Figure 1: Fresh products with a high risk of waste require a more responsive grocery supply chain. In addition, many will need to manage the complexity of operating multiple store formats while offering several fulfillment options. Successful food retailers must master both the hard discounters’ lean, highly efficient grocery supply chains and the agile, responsive supply chains required for fresh products. Whichever strategy a retailer chooses, they have a slim chance of success if they don’t develop their grocery supply chain to match it. Food retailers must make tough choices today about where to place their business bets moving forward. While these trends present challenges and opportunities, it’s clear that supply chain management will lie at the heart of the successes and failures we see in grocery retail’s future. The good news is that sustainability, efficiency, and profitability often go hand in hand. Retailers who fail to take meaningful action to reduce waste and emissions put their reputations at risk. ![]() Many leading retailers have committed to lowering carbon emissions, but sustainability is moving from “positive messaging” to table stakes. As consumers push their personal sustainability efforts, they also expect their grocers to increase their sustainable practices. The growth of consumers’ environmental concerns.The increasing complexity will test their grocery supply chains as they experiment with fresher products, smaller store formats, and localized assortments. In their pursuit of growth, these former hard discounters are stepping away from their highly efficient comfort zones previously built on simplicity, standardization, and large volumes. Healthy eating trends have discounters like Aldi and Lidl improving their fresh offerings, including organic meats and freshly baked bread. Continuing challenges in managing fresh and short-shelf life products.With poor execution, though, these initiatives also introduce new opportunities to lose money on costly food waste. As a result, food retailers are developing new approaches to prepared foods, high-value food-to-go, and even meal kits that can be picked up in-store or delivered to improve margins in a demanding environment. ![]() Meal delivery services – kits and prepared – and food-to-go apps are capturing an increasing share of consumers’ wallets. Increased competition from delivery and meal kit services.So, streamlining operations to improve efficiency must be crucial to every grocery retailer’s strategy in the future. Cost control always provides a competitive advantage, especially when consumers hesitate to spend. This shift to discount proves shoppers appreciate low-cost private-label products and well-curated assortments, even at the expense of abundant choice. Today, that growth continues, spurred on by inflation and geopolitical uncertainty. The 2008 financial crisis spawned a dramatic growth curve in discounters’ market share. The power of operational efficiency and the rise of discounters.But while most grocery retailers offer online shopping in some form, many struggle to make the channel profitable. From online ordering to home delivery and curbside pickup, the speed of omnichannel development has made operational efficiency particularly challenging for food retailers due to their mix of low-value products and high handling costs for fragile, variously sized products that often require temperature control. The ongoing evolution of online ordering and order fulfillment.Some of the trends that grocery retailers need to address simultaneously include: ![]() These issues and many others are in constant flux and significantly impact market trends. The grocery supply chain has always been complex, but the current business transformation is more dramatic than anything we have seen in decades, especially considering the lasting impacts of the COVID-19 pandemic, weather and environmental disruptions, and economic challenges such as inflation. Grocery retail strategies fall flat if not backed by the right supply chainsįood retail is a challenging and turbulent market.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |