What will the “New Normal”​ look like in the supermarkets?

If all keeps going in the right direction, we are almost back to the “new normal” after the outbreak of COVID-19. The people are returning as a whole to their regular daily routines, the children are going back to school, and we are going back to work and, hopefully, also to our place of work.

For the supermarkets, the “new normal” will be fundamentally different from the “old normal,” health and safety will permanently have a central place in the retail world. This will mean shifting to other supply chains, more e-commerce and continued rigorous standards of safety and hygiene.

Consumer behavior will undergo dramatic shifts in the years to come. In a study conducted by the respected research bureau Nielsen in March 2020, more than 40% of Dutch consumers indicated that they would be visiting the “brick and mortar” supermarket far less often in the future, and more than 60% of those surveyed declared that they would be working from home far more frequently.

In the first 17 weeks of this year, Dutch supermarkets recorded a turnover of €682 million more than the year before, and the outlook is that in 2020 there will be a 5.7% growth in revenues. That is no less than €2.3 trillion higher than in 2019. According to Dutch Statistics Agency (CBS), the level of consumer trust is now even below that during the banking crisis, and twice as many people expect a deeper downturn than it was during the breakout of the financial crisis in 2009. More frequently eating at homefood-delivery and take-away will become part of the “new normal.” The Dutch have been shopping online for fresh food, soaps, vitamins, cleaning products, and luxury lingerie on a massive scale, and this trend is unlikely to change. The food retailers, the food producers, and the “industrials” are the big winners at this moment. OK, the demand for mozzarella, buttercream, and premium meat has dropped a bit due to the decline of the restaurants, but this only has some marginal consequences.

Another tendency is that soon consumers will be even more demanding when it comes to qualitytraceability, and a flawless online experience. Furthermore, the COVID-19 crisis will appear to be the breakthrough of e-commerce for the whole population. (Older) consumers who used to be suspicious have now discovered and embraced the online buying of mainly fresh products. Smart technological developments (https://www.linkedin.com/pulse/tech-dramatically-change-business-post-corona-philippe-rogiest/) such as 5G will further accelerate this process.

What will the significant forces of the near future be?

1) Social distancing will remain for some time, resulting in less frequent supermarket calls, more local shops with local produce, more online shopping, and less frequent dining out.

2) Greater cautiousness will result in increased demands for washing powder, food supplements, and more transparency in supply chains.

3) The economic downturn will cause significantly lower turnover for the hospitality sector, high levels of unemployment, a war on prices, and lower supermarket expenditures, which may cause the discounters to take further market share. Even during the recession the consumer will seek indulgences it is up to clever retailers to respond intelligently to these needs.

Besides threats, this crisis will also offer chances to enterprising retailers:

  • Now is the time to develop a solid long-term strategic plan.
  • Those who anticipate the technological transformation best will be tomorrow’s winners.
  • Don’t step into the pitfall of giving massive rebates to win in the short term because you’ll most likely not be able to turn your backs on that contribution losses.
  • Do not save (too much) on the MarCom.
  • Don’t underestimate the altered consumer behaviors.
  • Keep Innovating

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