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Covid-19 has changed buying habits and Co-op is adapting with its suppliers

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As we enter a new chapter, the Co-op believes it is increasingly important for food retailers and their suppliers to work together. Clemmie Gleeson reports on how they are rising to the challenge.

Changes to consumer behaviour are usually subtle shifts which take a year or two to bed in and which retailers can detect and plan for.

But that was not the case with the dramatic overnight changes to shopping patterns caused by the Covid-19 pandemic.

Now that life is regaining some sort of normality, a lot of those changes still remain, alongside a host of other challenges the team at the Co-op needs to meet.

Information about customers is essential to understanding their needs, says commercial range manager Jennifer Oldroyd, who leads a team of analysts.

She says: “We have learned a lot about our customers over the past six months, but what has come out really loud and clear is how important convenience is.

Our small convenience stores at the centre of our communities have really been critical to our customers.

“Convenience and ease has been our strategy for a while now and it has only stressed how important this is to our customers.

Longer term we will continue to build on this.” Although cooking from scratch has become much more prominent through lockdown, with the return to work and some degree of social activity, this means they will have less time for preparing and cooking food.

Pork buyer Andy Neal says: “believe scratch cooking will continue for many in the shorter term, but long-term the macro trends pre-Covid-19 will continue.

“Products which take away some of the preparation, even if it’s just providing marinade for some meat, will still be important.” Mr Neal also believes recreating restaurant or cafe meals will continue to be popular.

In particular, brunch, which should not be underestimated, he says.

“Going out for brunch is very popular with millennials.

It is quite often a relatively inexpensive treat occasion which they are now recreating at home and it has almost become a ritual for their weekends now.

“All retailers will have to pivot their strategies. Clearly 12 months ago we would never have predicted this would happen.

Our strategies then were around encouraging people to spend a little bit more with us.

Now it is about how to keep those core customers engaged with less to spend on food.”

 

“We have been fortunate to have close, long-term relationships with our suppliers where we have been able to work through challenges collaboratively”

James Wilson

 


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The biggest uplift has been in pack sizes, including sausages.
The biggest uplift has been in pack sizes, including sausages.

Carcase imbalance

 

Addressing carcase imbalance is high on the agenda now, says category manager for protein Henry Guest.

He says: “We must use as much of the animal as possible.

Joints have not been our heartland at Co-op before, but now we can be ambitious about selling more joints.

This involves competitive pricing, but also features spacing in stores to draw customers’ attention, he explains.

The demand for sausages was much easier to satisfy compared to that of bacon, he says.

“Sausages can use bits of the carcase, such as shoulder, trim and bellies, which were readily available with the loss of foodservice.

“Loin is in high demand, so it was more difficult to keep bacon supply going.

It certainly has opened up people’s eyes to carcase imbalance.” Using the whole carcase to meet shoppers’ needs will include introducing new products, says Mr Neal.

He says: “We recently launched a barbecue shoulder steak.

Cooked on the barbecue, it is juicier than loin and more affordable. It is performing well so far.

“We have a few other products in the wings for winter all looking at developing cuts which are underutilised at the moment.” Pack size was another aspect bucking previous trends.

Mr Guest says: “Before Covid-19, the trend was that pack size was getting smaller as households were getting smaller.

However, customers are now wanting to trade up in the pack size.

It links to the fact they want to shop less frequently and are eating more meals at home.

“The biggest uplift has been in larger pack sizes, including whole birds, sausages and pork chops.” The Co-op is working with its suppliers to work out how to increase some of its offerings across the board.

Mr Guest says: “At the moment those trends are continuing.

We are certainly seeing a softening, but they are still in an elevated position on where we were last year.” Fresh produce Relationships with suppliers are more important than ever.

Produce category buying manager James Wilson says: “We have been fortunate to have close, long-term relationships with our suppliers where we have been able to work through challenges collaboratively.” It is more important than ever to understand the flows of product into foodservice as well, he adds.

“Shocks in these sectors are challenges we need to react to together.

This would aid the speed of diverting crops or varieties to areas of the market that need them most to ensure crops are utilised.

Lockdown saw a surge in demand, particularly for eggs.
Lockdown saw a surge in demand, particularly for eggs.

The ‘new normal’ for the Co-op

  • Understanding customers through data
  • Continued commitment to British produce
  • Convenience is still key
  • New products to address carcase imbalance
  • Bigger pack sizes
  • Focus on value
  • Restaurant experience at home
  • The rise of brunch
  • Deepening relationships with suppliers
  • Revised contingency plans

Routes to market

 

“This is particularly true for crops grown to plan which are stored for the season.

High demand depleted these crops very quickly.

Understanding other routes to market helps to divert the right product to where it is needed.” Poultry and eggs agricultural manager Mark Kempsell agrees, saying lockdown and the surge in demand, particularly for eggs, was a real ‘eye-opener’ but provided an opportunity to work closely with suppliers.

He says: “There are lots of lessons we can learn going back to a more normal way of life.

We can now focus on shoring up our supply chain to give us and our suppliers more security and give them confidence to invest in their businesses.” From a fresh produce point of view, value will clearly be a big focus from the final quarter of this year, says Mr Wilson.

He says: “We hope to support our customers by providing larger pack sizes to accommodate more at home cooking in a more budget constrained environment.

“We also expect some of the treat occasions to switch into the at home setting.

It will not all be trading into basics, as a treat at home might involve bringing that restaurant experience to the dining table.”

 

Understanding shoppers

 

Mrs Oldroyd says: “Financial security will be a big issue for many of our customers.

“But we know a recession does not and should not mean people want to always sacrifice quality or their occasional treat, so our ranges need to reflect the really diverse demand of customers in a recession.

“It all comes back to the customer.

If we really understand our shoppers then we can make sure we range the products which satisfy them and keep them coming back, allowing us to support our communities and suppliers.”

The team has been holding virtual meetings with farmers, he says.

“It is a challenge with internet connections sometimes, but it has been really interesting as sometimes in a large room some people may not speak, but it can be different from the comfort of your own farm.

“Farmers are often rushed off their feet, but if able to take an hour or two out of their day we can get a lot of really positive engagement.

“It is a really good opportunity for us in retail to understand how to improve the relationship going forward"

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