Supermarkets: challenges of the post-COVID era

Long gone is the crazy week in March 2020 when Pedro Sánchez announced the state of alarm. A week that the consumer will remember for the heavy stock-outs of toilet paper and the exorbitant sales that produced bottlenecks at checkouts never seen in previous Christmas seasons. 

We have learned a lot since then. Experience confirms that the sector has the capacity to change and adapt to fluctuating and new scenarios.

What scenario have we had in a pandemic?

The sector has ended 2020 with great growth in turnover, as it has been able to capitalise on the loss of business volume hospitality sector. In 2021, it seems that everything will remain the same, at least until there is a new controlled normality and the hospitality industry can re-emerge as the nerve centre of the socialisation of citizens.

The pace of new physical shop openings has not only met expectations, but in many cases far exceeded them. It was obvious that the most active chains in recent years would continue at a high rate of investment. But it has not only been them. Even the less active players, or those with recent financial problems, have shown a desire to increase their retail network.

After a few years all this will be a least of it. What will last over time, after overcoming this health crisis, will be the change in the mentality of both professionals in the sector and consumers. We no longer see the omnichannel option as a distant option. The Online Channel is already here and we must implement it. We have all reconsidered the fact of having a strong onine presence, so that when this channel takes up a large part of the market share, we are positoned and have the know-how that allows us to continue providing the best service to the customer.

 How is the sector likely to evolve?

The sector is going to evolve at a dizzying pace, as has been the case in recent years. The focal points of change, adaptation and innovation will be the following:

  • Trader fever. It should not be forgotten that the shopkeeper's DNA still contains this highly commercial fever. In the coming years, part of the profits will continue to be capitalised on growing the commercial network and adapting the oldest offline shops to the growing demands of the customer. 
  • Focus on proximity. After this crisis, many low-capacity stores will remain empty. The growing need for proximity to the customer and speed up home delivery will mean that the main chains will continue to focus on proximity and proximity as a form of "controlled" expansion.
  • New formulas? We shoud take a closer look at all these new concepts such as Dark Kitchen or Dark Store that are appearing and that are becoming more and more familiar to us. We will see how they influence the emerging multi-channel strategies, and how, through them, we can reach more and more of the end customer.
  • Inorganic growth and franchise model. It is very likely that the next few years will see some large acquisitions of shops, or even brands, businesses or companies. Also, growth in the regional supermarket will continue to be, as it has been for the last 10-15 years, a franchised or co-operative model. These models make it possible to compete with the economies of scale of the sector's behemoths.
  • Savings in logistics and structural costs. We have been investing for years in logistics improvements throughout the supply chain: procurement, warehousing, distribution, last mile deliveries, and in-store operations and processes. This investment is set to increase due to the high level of competition in the market and the growth of the online shopping model. In addition, it is more than likely that we will continue to see major organisational restructurings of more than one company when the lean season returns.
  • Demand forecasting and inventory management. In addtion to implementing improvements in certain logistical processes, companies are increasingly working on minimum stocks, with approved suppliers and stable purchase prices, revisable by volume. Better and more reliable demand forecasting means being able to minimise in-store shrinkage due to perishable products, increase the volume of availability on shelves and decrease the percentage of lost sales.
  • Establishment of the online business model. Over the next few years we will see what model of warehouses will be optimal to provide a Quick Commerce service to a network as capillarized as the one we have in the Food sector. Everyone eats. And as good retailers, we are not going to go against the margin 😛.
  • Sustainability. This year 2021 we have found ourselves with a strong measure to eliminate plastic bags. Over the next 5-10 years there will be important changes in the raw materials used in the packaging of commercialised products to reduce plastic and its impact on the environment. In addition, major investments will be made in industry and also in sustainable fleets to reduce greenhouse gas emissions.

At Hedyla we continue to work closely with and for the customer. We continue lo listen closely to their needs and to the evolution of the supermarket sector. Undoubtedly, the coming years are going to be hard work because improvements in logistics process optimisation are going to be the order of the day, and we will be there to always provide the best solution.

Leave a Comment