Shift to hybrid working
In 2019, 27% of the workforce operated from home during the year on average (ONS). In 2020, this figure jumped to 37%. With home working set to remain, we expect companies to reposition their convenience store portfolios, pivoting towards local high streets and un-derserved residential areas, rather than city centres.
Retailers may ultimately find them-selves vulnerable to unprofitable smaller-format stores that previously relied on high levels of commuter footfall. For example, Booths is closing its Media City store in Manchester due to “significant losses”. The upmarket grocer admitted the store had been impacted by the shift to home working, which led to a significant reduction in footfall and sales. On-the-go businesses are grappling with similar challenges which has seen store strategies shift away from urban areas. For instance, Pret-a-Manger are trialling shop-in-shops in partnership with Tesco as it looks to reach a wider customer base away from city centres.
More than ever, a strategic focus on ‘local’ is paramount for food retailers striving for suc-cess. Increasing numbers of consumers purchasing online presents attractive opportunities for innovative grocery retailers and their partners to capture market share over the next five years.
Despite supermarkets remaining open throughout the crisis, the grocery sector has experi-enced one of the largest shifts towards online within the retail industry. The proportion of online sales more than doubled compared with the previous year, accounting for 12.6% of total grocery sales in 2020. In the second of five articles, we take a look at how, and why, the online shopping experience has further entrenched itself in recent months.
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Explore the first article in this series.
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This article is the first in a series of five derived from Retail Economics’ report “The UK Grocery Market: Five Key Trends to 2025”. Epochal changes are taking place in the retail sector, in the second article we discuss how online shopping is here to stay. For retailers, brands and retail related professionals seeking insight into the impact of the crisis on the food and grocery sector, the full report provides data-driven insights and guidance for action.
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