"Why were supermarkets able to be so successful, particularly during the pandemic?" Answers to this question were presented by Alexander Pöhl, Principal Retail and Consumer Goods Practice at the firm Oliver Wyman at this year's DOGK. More than 10,000 customer reviews from eight European countries were collected for the study.
Accessibility and product selection key factors
"During the pandemic, the market shares were relatively clear. Discount stores were under pressure, more so than supermarkets," says Pohl. Unsurprisingly, he said, the decisions underlying each retailer's choice: "In the case of supermarkets, it was a combination of store accessibility and selection, while in the case of discount stores, price played a greater role, and in the case of hypermarkets, product selection also played a greater role."
Overall, German customers were also extremely satisfied with the freshness and quality on offer, the selection and the availability in the stores. Pöhl: "That's not necessarily a given, because in a European comparison, in countries like Switzerland, in some cases, discounters and supermarkets are on par."
Pandemic-related reasons
Given that consumers were no longer able to travel, people also had more disposable income, which accordingly manifested itself in the purchase of higher-quality goods. "Purchases were bundled and customers sought out locations nearby where they could buy everything at once," Pöhl notes.
"Supermarkets succeeded over time in giving customers no reason to go to discount stores anymore. Retail has invested heavily in sharp pricing, but it has also been able to convince with its performance." What was meant here, was differentiation in product selection, addressing customers locally and improved adaptation to the respective local consumers. Regardless, he said, freshness is a critical factor for success. "Freshness is the main reason for consumers to be satisfied with their purchases. But fruits and vegetables are also the no. 1 satisfaction driver."
Comeback of the discount
Times have changed drastically, however. Pohl: "We're seeing unprecedented price trends as well as a significant drop in consumer confidence." As a result, he said, discounting is expected to claw back its market share. In response to the current situation, Pöhl said he expects retailers to shore up their basic performance. "To increase profits, you have to focus more on differentiating freshness. You have to ensure that the customer can buy at a good price."
Supply chain overview as competitive advantage
Currently, there is more focus on the supply chain than ever before, he said. Particularly in times of volatility, retailers need to gain more control over the supply chain. Pöhl: "The retailer has a deep understanding and better overview of quality and volumes from producer to market. He or she can focus this information, for example through local contacts and systems, and in turn make this information accessible. This gives him a major competitive advantage."
Not surprisingly, Pöhl says, all the major distributors are now trying to enter the value chain as early as possible. After all, the right partner can often make all the difference.
For more information:
Alexander Pöhl
Oliver Wyman
Müllerstraße 3
80469 München
+49 89 939490
+49 89 93949511 (Fax)
www.oliverwyman.de