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...this foray into UK FMCG & grocery retail is reflecting key trends in customer expectation and behaviour...”
And it is not just deep pockets. This is a company with both unparalleled operating efficiency and market leading customer engagement and personalisation. It also has perfect timing – and right now, this foray into UK FMCG & grocery retail is ref lecting key trends in customer expectation and behaviour that the Amazon/ Morrisons collaboration can only accelerate.
Confident Consumers Many more people are now accustomed to buying online: around a third of UK consumers plan to carry on shopping for food online once the pandemic has subsided. At the same time, shop local has been a big trend over the past year – not just due to lockdown orders but also in response to the plethora of small independent food providers who have gone above and beyond to support customers.
In addition to the multiples’ high street convenience formats, independent
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food retailers – the delis, fishmongers, bakers and greengrocers - have benefitted from an upswing in consumer demand. While other retailers have closed, a number of independent food retailers have opened new high street premises during the pandemic. People enjoy the chance to buy fresh food direct from the experts – especially when local suppliers can offer the reduced food miles and farm to fork eating that are increasingly important to consumers.
The Amazon/Morrisons partnership capability to provide customers with free next day delivery of all the staples – the dull cleaning products, shampoo, tins of tomatoes, pasta and the inevitable loo roll – totally eradicates the need to visit the supermarket. Rather than heading to the out of town superstore and adding ‘not-quite-so’ fresh produce to the trolley simply for convenience, customers can receive all those dull items at
home, on demand, with free delivery, and instead head to the high street for the fun bits, checking out the farmers’ market, the new deli and sharing a coffee.
Conclusion UK multiples were already scaling back their large out of town supermarkets prior to the pandemic and investing in smaller convenience stores. But they have also invested very heavily in online retail – investments that need to be recouped. How? Large format stores cannot be mothballed overnight. New convenience formats cannot be accelerated. And what UK supermarket can offer free next day delivery – apart from Morrisons of course? Savvy move. So what’s the strategy?
The boss of Ocado may have shrugged off Amazon’s likely impact on the UK, but Amazon has thrown a hand grenade in to the supermarket sector, that will turn the future of grocery shopping in the UK on its head.
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