Ethical may be the leading trend but quality is not unimportant, however. The IGD reports the premium sector has grown from £13bn to £19bn in the last five years.
Denney-Finch: Shoppers attitudes are changing
And, retailers across the world are responding with premium stores such as Globus Gourmet in Moscow and Breadtalk, an upmarket bakery in Singapore. In the UK, meanwhile, the IGD has highlighted the south-east frozen food chain Cook!, which has found a premium niche in a mature market, outside of the fresh or chilled categories. Other innovative store formats include Deli de Luca in Norway, which combines convenience and food service and has become one of the most recognised brands in Norway. Private label is another tool that retailers and manufacturers are deploying in order to innovate. The IGD has forecast private label across Europe will grow by 44% to e430bn in 2010 and its research had revealed that in many categories branded items are more expensive than private label making brands more vulnerable. “In many markets private labels are brands in their own right,” said IGD chief executive Joanne Denney-Finch. “For private label suppliers there are plenty of opportunities. If you are not, you need a strategy and response. Iconic brands will always be wanted. Key brands will remain essential traffic builders but you need to make yourself indispensable.” Denney-Finch said strategic alliances such as Nestlé’s tie up with L’Oreal and Philips with Douwe Egberts will become more important. “There’s a world of opportunity for brand owners but you need to be fast, flexible and get closer to the customer,” she urged. Innovations in technology, and online shopping in particular, will also impact sales, added Denney-Finch. “Home shopping has not driven growth for the industry yet but we will soon be getting TV quality graphics online. Online is here to stay, it is just in its infancy. Don’t think technology is something for tomorrow, it will continue to revolutionise the way shoppers buy your products. “The bottom line is the business models of today will not work tomorrow,” she concluded. “This is the beginning of a brave new world, it’s full of opportunity, so go for it.”
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