The boom in fresh drives up grocery salaries but also margins and will transform today’s grocers (1/2)

As the relentless march of online continues, future job losses in bricks and mortar based retailing seem inevitable. That said, the remaining jobs will be higher paid and of better quality. Nowhere will this become more apparent than in grocery and the fresh categories are driving this trend. Defined in broadest possible sense they include produce, dairy, meat but also convenience and food service options for on the to consumption.

According to Nielsen data we aggregated, the global benchmark for the fresh categories as a share of total grocery in the Top 10 grocery markets of the West is 31.4% and growing strongly. (USA, CAN, AUS, BE, ESP, FR, IT, GER, NL, UK).

All the focus in retailing is currently on digital, and for many retailers rightly so. However, concentrating on the fresh and chilled ranges and food service offer that drive shoppers back into grocery stores has paid handsome dividends for a new breed of specialists.

This trend is wider and deeper than getting the right fresh produce into stores at the right time. It also includes retail theatre, multisensory tasting sessions before purchase and enabling shoppers to witness how their food is produced. The best retailers open up the production process of baked goods, meat, coffee etc and the food service offer (smoothies, sushi, pizzas etc).

Coupled to this are the self service counters, so shoppers can pick & mix and put their meals together based on the ingredients they desire. Food intolerance rates and allergies are on the rise also, so offering personalisation opportunities is the way forward.

Riding on the back of these trends is the shift to artisanal brands and story telling and the slow move away from mass produced FMCG processed foods. This plays exceptionally well with the millenial and hipster shopper generations. In the U.S. increased healthy eating habits have led to a decline in “center store” sales in grocery stores (i.e. processed FMCG products).

TO BE CONTINUED…

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