Retailing in the Week Ahead Week 26, 2019

Six years ago, I received a surprise phone call. On the other end of the line was the international buying director for a major multinational retailer. He demanded to know who was responsible for picking the topics we write about on Retail IQ. I meekly said: “I guess that’s me to some degree.” What happened next was more surprising, as he told me, “You’re not writing about the biggest topic in retail: Ultrafresh!” I then asked how I could learn more about it and he invited me to a series of several meetings at his office.

Subsequently, the London Retail IQ team began conducting an annual study on Ultrafresh. We define Ultrafresh as a capability that retailers either possess or do not. That capability is the process and connections required to get fresh produce direct from the farm and sell it rapidly from stores. To keep things simple, we decided to pick just one product:  strawberries. 

The results of this focus have kept teaching us a lot about changes at big retailers. This year is no different – we expect to learn quite a bit about how retailers are changing by looking at strawberries and how they are marketed, managed, merchandised and cross-merchandised.  We’ll be having a look around over the next few weeks in combination with the most famous strawberry-eating event in the world: Wimbledon.

Changes since we began

Before we begin, it is important to note that ‘strawberries’ is not the only time of the year that we talk about Ultrafresh. We have also done some studies on subscription delivery-models, particularly on those that promise to deliver Ultrafresh better than a supermarket. In those studies, we highlighted subscription-based companies such as PACT, a coffee company, and FRUIT-FOR-LONDON, a fruit company that provides subscription services. 

Today, the office in which a large group of our analysts work receive weekly subscriptions from these no-longer startup service providers. That’s a big change from when we first started covering Ultrafresh and the office was using classic cash & carry providers as the model.

Likewise, when we look at big supermarkets, many changes are worth noting:

  • Tesco has introduced Farm Brands and has won awards as ‘Best Fresh’ retailer in Britain; its Real Food stories have also won awards and they’ve brought in celebrity spokesperson Jamie Oliver
  • Lidl has retooled its supply-chain to deliver ‘same-day strawberries’
  • Aldi began its ‘Super 6’ offers and has grown at consistent double-digit rates
  • Ownership and partnership changes are going in many directions, with M&S partnering with Ocado, Sainsburys attempting to take over Asda but getting blocked, Waitrose & Partners moving to a more decentralised model, Amazon partnering with Morrisons, and so on

Changes Implications: Ultrafresh is changing the way retail is done in slow and methodical ways – branded suppliers looking to win with customers really need to understand these long-term changes and the impact on how retail is conducted

Four trade-offs in Ultrafresh

This year we’ll be looking at four trade-offs in Ultrafresh and will do a summary of key findings each week. If you have other topics you would like us to explore, please drop a line.

Additionally, we’ll do a summary of who we think is doing it best. We would love to hear from you in advance about who you think will win this year’s battle. Click here to vote for who you think will do ‘Ultrafresh Strawberries’ the best in the UK in 2019. 

  1. The trade-off for space. Retailers need to make difficult decisions about how much space to give to different categories, and in total. This year. we will compare our findings from 2014 on space allocation to what we see today. What do you think: how has space changed in five years?
  2. The trade-off for service. Likewise, retailers need to decide how much support they provide shoppers. On one hand, they could just put the product on a pallet and call it self-service. On the other hand, they could provide a team of experts to help choose and prepare products prior to consumption. This year, we’ll compare our findings to 2014 when it comes to the services that support shopping. How do you think service has changed in the past five years?
  3. The trade-off for planning. Similarly, retailers need to have a communication plan and routine. Some will want to have a very rigid calendar and communication plan that remains the same year-on-year, giving consumers and suppliers predictable events to plan around. Others will want to surprise by seizing opportunities to buy/sell goods as they arrive. So, in your view, has retail become more planned or more spontaneous in the last five years?
  4. The trade-off for store design. Finally, many retailers and consumers enjoy having a store that is predictable to shop or manage. For example, this could mean always having fresh at the entrance and refrigerated at the back. We will compare this year’s finding on Ultrafresh to previous studies to see how much cookie-cutter store design is in place today compared to the past. Do you think stores are employing more cookie-cutter designs today or more ‘one-size-does-not-fit-all’ designs?

With that, we hope you will tune in for our weekly updates on Ultrafresh – British Strawberries & Cream.

Please also consider signing up for our upcoming virtual workshop on best practices in Global Convenience and Microretailing on 3 July.  You can get more information by clicking on this link.

If you did not have a chance yet, please also have a look at some of our big featured items from WEEK 25:

Good luck in the week ahead. 

Regards,

Ray Gaul – Ray.Gaul@KantarConsulting.com and @KantarConsulting or @RayGaul on Twitter plus LinkedIn.

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