Nearly 80% of independent retailers planning further investment: BWG Group
BWG Group releases results of major independent grocery retailer survey, which reveals diverse range of retailers' views, on topics ranging from the impact of social distancing on their in-store retail display space to the introduction of home delivery services and more
Print14 July 2020
BWG Group, one of Ireland’s leading food wholesalers and retailers through its branded retail estate of over 1,000 stores, has released the results of a new survey of Spar, Eurospar, Mace, Londis and XL independent retailers, which includes an assessment of future outlook and key challenges, as well as the impact of Covid-19 on costs and operations.
Outlook: A comprehensive picture
The research, which was conducted over the course of the last two weeks, found that approximately 73% of respondents feel positive or very positive about the future outlook for their businesses, with the remainder of respondents unclear at this time. A smaller proportion of independent retailers (67%) are positive about the outlook for the wider grocery sector, with 31% unclear at this time and a further 4% holding a negative outlook.
While just over half of independent retailer respondents (52%) believe that the economy will recover faster than the previous economic downturn in 2008, 15% expect it to be the same and the remaining third (33%) expect the recovery to be slower.
Reflecting their predominantly positive outlook, 79% of independent retailers are planning further investment in their businesses over the next three years. Approximately 28% of these retailers identified the development of new foodservice offerings as a key investment focus for driving future growth, followed by expansion of retail premises (27%) and enhancements to in-store layout and design (18%). Interestingly, training and development was highlighted as the key focus for investment by one in 10 retailers.
Key challenges
With regards to the key challenges facing the grocery sector, employment costs were identified as the most severe challenge, followed by insurance costs and Covid-19 related regulations. Interestingly, Brexit was not considered as posing a key challenge by the vast majority of retailer respondents.
In terms of priorities for the new Government in supporting the grocery retail sector, 78% of retailers surveyed indicated that they would like to see the Government reduce commercial rates, while 67% believe that there should be an accelerated reduction in insurance costs.
Covid-19 impact
Specifically relating to Covid-19, the research revealed that 98% of independent retailers invested in new health and safety fittings in line with Covid-19 requirements with the majority of stores (74%) spending up to €2,000 on upgrades, 21% spending up to €5,000 and five percent spending between €5,000 and €10,000. Additionally, 48% of retailers surveyed reduced their in-store retail display space to allow for greater social distancing with the majority of these (61%) losing up to 10% of floorspace with a further 25% losing up to 20%. 13% of these retailers lost more than 20% of their retail space.
The survey also found that 44% of independent retailers introduced Home Delivery services in response to Covid-19 while a third (33%) began providing Call & Collect services, with 70% of retailers now planning to retain these services in the future.
As economic uncertainty continues to impact consumer behaviour, 42% of retailers believe that price and value will be the most important shopping priority for consumers going forward. Where product quality and availability would have normally been considered key priorities for consumers, retailers believe that hygiene standards will be the second most important consumer priority going forward as a result Covid-19.
Essential service
Commenting on the findings of the research, group chief executive of BWG Group, Leo Crawford, said: “This research highlights just how strongly our independent retailers responded to Covid-19 by continuing to provide an essential service to their local communities throughout the pandemic, all while accelerating the introduction of a number of new services and innovations aimed at delivering on the needs of consumers in a safe and convenient environment.”
“While the Covid-19 pandemic has significantly altered how consumers approach grocery shopping with health and safety, personal service and convenience all key drivers now, it has also reaffirmed the place of grocery retailers at the very heart of the local community, particularly independent retailers who are often multigenerational family owned SMEs,” Crawford added.
“From an economic perspective, it is encouraging to see positivity from our independent retailers regarding the outlook for their businesses, particularly as their presence in nearly every town and village across Ireland positions them as a strong barometer of economic activity,” he continued. “While the majority of our retailers remain optimistic and ready to invest in their businesses which employ over 23,000 people nationwide, there is a clear call out for action from the new Government on commercial rates and insurance costs, to sustain these businesses into the future.”
The survey results were gathered in advance of the annual BWG Foods Trade Show; the largest food industry event of its kind in Ireland which, now in its tenth year, is being hosted virtually for the first time. The two-day event, which has been predicted to generate €25 million in sales, brings together more than 200 of Ireland’s leading indigenous and multinational suppliers spanning categories including health and wellness, fresh food, pre-prepared meals, chilled produce, beverages and confectionery, showcasing key offers to over 1,000 retailers, with sales generated via a dedicated online purchasing platform.
Fans 0
Followers