Major grocers soared in the pandemic, but 2022 will be the year of small business

The large grocery suppliers fared better in lockdown as consumers stocked up onbig brands in their time of adversity. This was not just down to consumersbecoming less adventurous when all around them was turning to mush – it wasalso driven by the retailers’ choice to simplify ranges in their quest to keepa core weekly shop available.

The net effect of all this is major retailer ranges look more like each other’snow than they did two years ago. This goes against their necessity todifferentiate, which is not only about thriving through development of shopperloyalty. In today’s pressurised pricing environment, it’s a matter of survival,given the slipping of share to discounters and digital retail formats.

Whilst developing that sense of uniqueness is now a priority again forretailers, many of the smaller businesses who previously helped in that questare no longer there, or are too committed to models that are no longerrelevant.

The reversal of pandemic behaviours is happening now, but not as fast as manysuggested. There is a lot of data on what shoppers did, but not so much on howhappy they were about it. Trench mentality and stoicism in the moment beliesthe true self-serving mindset of the average Brit.

Online will never fall back more than halfway, but the substitutions and lackof delivery slots must get better to achieve medium-term loyalty – shopperforgiveness on those fronts has now run out. Profitably reversing the trends inupheaval categories like HFSS, for example, will be difficult for establishedcompanies, so a new supplier mindset – or just a new supplier set – is needed.

As the next months unfold, a void of suppliers will emerge. Suppliers, that is,who can provide identity for retailers and are able to meet the new marketrequirements. This void will represent a huge opportunity for entrepreneurialand dynamic supply businesses. Their innovation will be relevant to the newshopper needs, such as convenience and provenance, and they will rediscover theart of delighting shoppers over simply satisfying basic needs.

They will have increased sustainability credentials, and flexibility to provideexclusivity or private label. Their positioning will also allow for offsettingthe forthcoming wave of inflation and combat the rising consumer reliance ontakeaway food, whilst balancing focus between the Luddites and social mediaaddicts.

Larger businesses are, of course, not interested in assuming this rifle-shotrole. I wonder why they are so against doing so? Why can’t they provide thecomfort of big brands while also offering the excitement of local and exclusivepoints of difference? Sometimes perhaps the juice isn’t worth the squeeze forthe big players. The pandemic may have favoured big business, but 2022 will bea great time to be small.

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