GROCERY INDUSTRY TO ASSERT LEADERSHIP IN NZ DURING CRISIS

closeup hand on shopping cart at supermarket

The world continues to go further into lockdown as the realities of COVID-19 set in. Overseas, supermarket shelves have been cleared, in particular, the toilet paper and ‘staples’ as consumers fear self-isolation. In these challenging times, retailers in New Zealand have seen basket sizes dramatically increase and suppliers are seeing up to six times the volume being sent out.

Businesses are quickly analysing options when it comes to ‘working from home’ and who in their team is able to do this and what they will be needing.

In a release from NZFGC, it states that while many New Zealanders will stay at home, the reality is our industry will have to keep going – manufacturing, despatching, stocking and selling. Like energy, health care, and other parts of the economy, the government and citizens view food and groceries as economy priorities.

“There are a lot of unknowns, particularly timeframes. What we do know is that this could take many months. While FGC is working closely with members, retailers and government on a daily basis, there will be challenges that we have not foreseen, but I assure you that FGC, our Chairman Mike Pretty, and our board are focussed on supporting members, our retailer partners and New Zealanders,” said CEO of FGC, Katherine Rich.

“It is a time to consider different ways of working and to protect those who must continue in roles that cannot be done at home. Our reps, factory workers and our mighty merchandisers, in particular.”

During challenging times and recessions, customers re-evaluate the value they get from everything they buy. How consumers are shopping during these times has the potential to change the way they shop in the future. In effect, what they are doing now and the brands they choose can and will become their new “normal”.

“Our industry has proven itself time after time in periods of emergency, as evidenced by its strength and confidence in the ability to meet the needs of the communities it serves, no matter the circumstance,” said Leslie Sarasin, president and CEO of FMI – The Food Industry Association.

“Of course, the trick to navigating this new landscape is being smart about what you need to learn, what you must unlearn and then what you need to relearn. And the key to effective leadership during this era of evolution is first, knowing the degree to which you need to do each, and second, being prepared to adapt your plan at the drop of a hat on the basis of new intelligence.”

Retailers’ commitment and response to this pandemic will be not only essential in steady sales and shopper loyalty but also the safeguarding of the community and how we can pull through this crisis together.

“We’re taking the evolving situation with COVID-19 very seriously and are monitoring it closely,” said a spokesperson from Countdown. “The most important message we can give Kiwis is that there is plenty of food to go around, and there’s no need to stockpile. We encourage customers to shop as they normally would and be thoughtful of others to ensure that all New Zealanders have access to the food and products they need.”

Countdown is following the government’s requirements around self-isolation for any of its team members who are returning to New Zealand from overseas travel and supporting them with leave if they have been impacted by self-isolation requirements.

New World have been working around the clock to ensure it can continue to feed New Zealand and look after its people. The hardest-hit stores were those in the greater Auckland area.

“Many household essentials saw a significant increase in sales over the weekend including toilet paper, bread and milk. These products are made or manufactured in New Zealand and are not under threat and shoppers should look to shop for these items as they normally would. Stockpiling puts stores under unnecessary pressure and delays when they can replenish stock and limits availability for other shoppers,” said a spokesperson from Foodstuffs.

“Right now we are focused on supporting our stores’ replenishment efforts and making sure essentials are available for all shoppers.”

Every retailer delivers solutions to customers every day, and has done for many years and decades. So it’s your time to reassure consumers that you are stocked up so they don’t have to.

TAKEAWAY AND SUPERMARKET SALES RISE WHILE DINE-IN NUMBERS DROP

States across America are now calling for and banning food service establishments from opening in order to curb the spread of COVID-19. NYC, Los Angeles and Washington have announced a shutdown of bars and restaurants except for takeaways and food delivery.

“These are the emergency steps we are taking to help prevent the spread of COVID-19 & protect people across LA, effective at midnight tonight,” said Mayor Eric Garcetti of Los Angeles.

“This isn’t easy and I don’t make this decision lightly. We will do everything we can to help businesses & workers impacted during this time.”

Supermarkets already have some great offerings in place including recipe ideas, cooking guidance, meal kits, heat and eat, and food-to-go offerings but this could be a perfect opportunity for retailers to be a market leader in this space. Is your supermarket offering something unique? Click here to let us know!

ADVERTISING AND MARKETING DURING TOUGH TIMES – GROWTH IN A RECESSION

Advertising spend tends to be the first to go when the world goes into crisis mode. However, there are notable examples in history that might help your business make some informative decisions going forward.

Case in point, Kellogg’s. During the Great Depression while every other company slashed marketing spend, Kellogg’s doubled it investing heavily in radio and aggressively promoting its Rice Krispies cereal.

“As many product stagnated or collapsed under the weight of a stalled economy, profits at Kellogg’s rose nearly 30 percent and helped create the successful brand identity that remains more than eight decades later,” said Robyn Blakemen in Strategic Uses of Alternative Media: Just the Essentials.

“More recently, Apple took an aggressive stance by increasing its advertising efforts during the final months of 2008, when many brands were cutting back on ad costs. Always portraying itself as creative, innovative, and socially aware, Apple drilled the point home in its ‘Get a Mac’ campaign, which put cool guy Justin Long (the Mac) up against the far-from-trendy John Hodgman (the PC). These ads helped Apple gain market share in excess of 2 percent, giving them an almost 10 percent share of the personal computer market.”

While most brands reduce spend during tough economic times, forward-thinking brands like Kellogg’s, among others, go against the grain, and in some cases even increasing spend, acquisitions and investments in R&D.

Blakemen goes on to say that innovative brands may go so far as to introduce a new product or service, knowing that weakened competitors will not launch or manufacture a product any time in the near future, or even look to recruit unemployed talent not available at any other time.

“Research has repeatedly shown that companies that remain in the public eye come out of recessions with a higher share of the market and more brand-loyal consumers than before the crisis.

“Studies on the recessions of 1921-922, 1981-1982, and 1990-1991, confirmed that when businesses increased or maintained their level of spending, they grew significantly over competitors who reduced spending in all categories. Furthermore, research has shown that companies that do not base business decisions on changing economic cycles saw their stock prices increase an average of 1.3 percentage points annually.”

Here are Blakemen’s five great reasons to be innovative and progressive during an economic downturn:

  1. Available deals on media buys – many that can be locked in for years to come
  2. The need to keep customers up-to-date on both existing and new product introductions
  3. The ability to stand out when competitors are cutting their budgets
  4. No loss of market share if competitors do not cut their advertising expenditures
  5. Finishing ahead of the game when the economy picks up