There is no doubt that 2021 threw a lot of challenges at UK grocers – massive supply chain disruptions, inflation, a fluctuating Covid situation, rapidly shifting consumer demand patterns and an increasingly competitive landscape.
The best retailers will listen to their customers and make analytically sound decisions that will create win-win scenarios for their business and consumers alike. When informed by their consumers and using the right AI platforms, retailers can strategically decide to lower or hold prices on the items that are most important to consumers while taking larger increases on inelastic products. The consumer wins because they get a better price on an important item at a time when budgets are squeezed. The retailer wins by increasing profits while also gaining share vs competitors who didn’t take a balanced approach and only increased prices or made the wrong pricing moves on the most important items.
A BCG study found that 77% of UK consumers demand value when making a purchase and it remains more critical than ever for UK grocers to price competitively. Covid drastically changed consumer demand. Consumers were forced to try new brands, new channels and new retailers. One of the ways that many retailers in the UK have improved their position in the market is through a greater focus on local and ‘made in Britain’ products. Not only has this helped with supply chain issues and sustainability messaging, but it has also led to some increased demand.