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42 Future of Retail


issue 01


In many cases, this has been out of necessity


in light of shoppers’ growing preference for convenience stores. Statistics show that reliance on the traditional weekly ‘big shop’ is diminishing and shoppers are instead making regular, sometimes daily, visits to smaller convenience stores to meet the demands of increasingly busy modern lifestyles. It is estimated that as consumers continue to be time-poor, changes to the way they choose to shop will see convenience stores grow 22% to £20.2 billion by 2020. Similarly, ‘meal for tonight’ purchases will increase by 50% to 2.7 billion and purchases of often-warm ‘food to go’ is expected to rise by 60% to £8.3 billion. Figures from the commercial real estate


company CBRE show that the big four grocery retailers now run almost 3,500 convenience or small stores, such as Tesco Express, Tesco Metro, Sainsbury’s Local and M Local. This compares with 2,500 traditional supermarkets. Everyone has talked about online as the big disruptor in grocery shopping, but the growth of convenience stores has arguably had a much greater impact. It has encouraged a change in shopping habits. It is enormous. It has encouraged people to fragment their shopping. The challenge is posed by the fact this


explosion in formats and choice forces cost into the supply chain while the discounters continue to peg any potential for price increases by focusing on a limited product range - less than 1,500 skus at very low prices – underpinned by an astonishingly low cost to sell.


The reality


is that convenience stores are expensive shops to run. Deliveries cost more, rent bills are often higher and they do not benefi t from economies of scale because of their smaller size. The result? Changes must be made to


secondary packaging formats and design. Retail ready packaging for convenience stores creates a very specifi c set of challenges. For instance, space, both on shelf and in the back ups, is at even more of a premium so delivering “one way stock” and minimising replenishment time becomes much more critical. It’s unlikely


that a pack size that is right for a big store is going to be right for a convenience store. Too big a pack size in fresh food will lead to higher food waste, multiple handling and space pressure in the back up areas, whereas smaller pack sizes lead to increased packaging cost, increased packaging waste and more packs to handle in the supply chain. Retail ready packaging needs to be ready to offer solutions to these challenges, whilst simultaneously meeting the demands of large supermarkets, hitting sustainability targets and reducing fresh food waste. It is imperative that food producers take


these new challenges into account when planning their packaging requirements. The industry is crying out for new innovations that can deliver smaller packs that are lower cost, consume fewer resources, are quicker and easier to prepare for unpacking and maximise brand impact. One of the barriers is the polarisation of


packaging materials supply chains, whether it be corrugate, RPET, carton board or fi lm. Individually, each of these pack types have come a long way in reducing the amount of material and therefore cost. However, the pace of improvement is now slowing and new approaches are required. A suitable analogy would be the motor


industry, which found itself faced with the challenge of reducing emissions and increasing fuel consumption. Would it be the electric motor, with its emissions benefi ts, but poor travelling performance or would it be the good old internal combustion engine with the opposite traits? The answer, of course was neither. Manufacturers realised they both complement each other, so the hybrid was born. The same is proving to be true in the secondary packaging sector, with hybrid packs comprising of corrugate and RPET and thin fi lm or a combination of all three, proving to be both effective and energy effi cient. The focus of design innovation is too often


primary packaging but secondary packaging has to be clever too if it is to show the primary pack in order to maximise its sales potential. If the product is hidden or there are ripped


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