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The report from IGD and foodservice consultant Peter Backman, Eating In Vs Dining Out, explores the impact of Covid-19 and outlines four scenarios to help food retail and foodservice companies plan for the future.
The first hypothetical scenarios – The Great Reset – would see food and drink consumption largely shift to home. Retail sales remain high but flatten as lockdown restrictions gradually lift and people start to eat out again. Some changes in shopper behaviour becomes the norm fuelling further development of digital channels.
The second hypothetical scenario – Decade of Drift – would see the economy takes longer to recover and the financial impact on households and businesses is severe. Companies would accelerate their cost-cutting and efficiency programmes to demonstrate value to consumers, resulting in lower levels of new product development.
The third hypothetical scenario – Technical Isolation – would see businesses and consumers turn to technology and digital services, which reshapes the retail offer, with online seen as the safest way to shop. Investment would be diverted from improving and expanding stores. Shopping would become a functional activity rather than experiential and opportunities for premium services and price increases lie in areas of safety and hygiene.
The fourth hypothetical scenario – Globalisation Reversed – would see globalisation regress, putting pressure on supply chains and businesses to find operational efficiency. The supply chain would be extensively rebuilt; ranges change, with some products becoming seasonal or disappearing completely.
Rhian Thomas, head of shopper insight at IGD, said: “In this highly uncertain environment, it is crucial that retailers and suppliers are able to respond successfully and quickly to events as they unfold. Considering which changes in shopper behaviour will become permanent will help identify the solutions that you want your business to nurture. Retailers must prepare for the reopening of the out-of-home sector and the impact on your business.
“Suppliers show consider multiple views of the future that adopt different growth rates all while focusing on ways to support your retail customers. Identify parts of your business or brands that will perform well or are at risk as a focus on value will put pressure on pricing and potential margins.”
Peter Backman, foodservice consultant and co-author of the report, added: “Consumer demand will drive and shape the eating in and dining out markets more than ever before, so suppliers, foodservice operators and retailers will need to react, adjust and innovate to allow for evolving scenarios. The food industry has always been fast-paced; it’s about to get faster.”
Eating In Vs Dining Out is available to subscribers on IGD Retail Analysis, further insight can also be found here.
