Invest to win from convenience – Geoff Eaton

Britons favoured independent and convenience retailers, and had turned their backs on superstores and hypermarkets, according to recent figures compiled by insurance broker Simply Business.

There had been a 110% increase in independent store openings in the past five years, with smaller and convenience food retailers driving that growth, it said.

“It’s been a very well established trend over the past few years,”​ said Geoff Eaton, chairman of New England Seafood International.

Response to the trend​

Most major supermarkets had already opened several convenience stores in response to the trend, added Eaton, whose previous roles included chief operating officer and executive director at Premier Foods and chief executive of chilled food business Uniq.

“But, the problem for the big four is that their estates are dominated by major stores and trade is moving away from them and that’s hurting them and putting them under pressure,”​ he said.

The change in the trend should have already prompted food manufacturers to be more diligent and to ensure they were looking at every retail channel to maximise their business opportunities, Eaton advised.

To do that, however, would increase supply chain complexity as catering to smaller and more retailers would mean more deliveries of smaller quantities. 

Yet, smart manufacturers would see the increasing trend as an opportunity more than anything, he predicted.

‘Boost limited ranges’​

“Most convenience stores hold only a few stock keeping units and it’s going to be good for things such as fish if manufacturers can develop products to boost the limited ranges in convenience stores and small retailers,”​ Eaton claimed.

Changing consumer shopping habits presented more opportunities than some would at first believe, he added.

“However, it’s up to food manufacturers now to invest in their sites and products to make sure they are appropriate for the convenience sector,”​ Eaton said.

Meanwhile, online retail had proved to be a saviour for the big four, following recent data that sales would reach £52.25bn​ this year – a 16.2% increase on 2014 – according to the Centre for Retail Research.

As a result, online would turn into the fastest growing channel for grocery goods and would accelerate the decline of traditional superstores and hypermarkets, said Nick Miller, head of fast moving consumer goods at supply chain consultancy Crimson & Co.