Convenience is back on the menu for fine food retailers

09 August 2021, 09:09 AM
  • The booming food to go market is shining a light on customers’ demand for convenient food and drink options. How can speciality retailers find success?
Convenience is back on the menu for fine food retailers

With Scotland following England in easing most of its remaining Covid restrictions, consumers’ lives are once again filling with activities and outings. After spending most of the last year working from home and cooking from scratch, shoppers are keen to get out and about, and convenience is in high demand when it comes to food and drink.

Indeed, the food to go market is making a rapid recovery, with IGD’s analysts predicting it will return to its pre-Covid levels a full six months earlier than expected as shoppers pick up meals and snacks to eat on the go. The group forecasts that the food to go channel will be worth £15.6bn at the end of this year, and it will return to its pre-pandemic levels in the second half of 2022.

Retailers must innovate for success

Nicola Knight, IGD’s senior analyst for food to go and author of the forecast, explained that the figures are positive news for the sector. “By 2026, the market will be worth £22.7bn which is 20.5% more than 2019. This will be the outcome of five years of growth at above pre-pandemic levels following significant contraction in 2020, and will predominantly be driven by foodservice operators.”

Hospitality businesses will benefit from cooking fatigue, and demand for affordable luxuries will boost “destination” food to go sites, Nicola said. At the same time, retail’s share of the food to go market is expected to drop to 21% from 24% in 2019, but this will gradually increase back to 23% by 2026. “In 2021, retailers have faced increased competition from foodservice operators who adapted quickly to changing consumer habits and demands,” Nicola said. “The challenge for retailers now is whether they can close the gap in market share. It will depend on how far consumers return to pre-Covid habits and how fast retailers adapt to changes in behaviour that stick.”

As well as stocking convenience-led products that are tailored to a more discerning customer, such as grab and go food wrapped in sustainable packaging, high-quality ready meals that don’t skimp on flavour and great tasting, good-for-you snacking options, to meet the renewed demand for convenience retailers can look to innovations around e-commerce and delivery. Market research firm Nielsen explained that consumers raised their expectations for convenience shopping during the pandemic. “The baseline for convenience is higher than ever—and consumer expectations from retailers will be, too,” it said. And it wasn’t only large supermarket chains that moved their operations online – independent retailers, cheesemongers and butchers all found success with increased online ordering, click and collect or drive through options.

Even as in-store shopping returns, delivery and click and collect options will be popular with customers, according to Nielsen. “Staying nimble, flexible and focused on consumers will be critical for retailers now that new standards of convenience exist,” the group said.

While part of the charm of shopping at an independent food and drink retailer will always be the time spent perusing shelves, exploring new products, discovering recommendations from staff members and learning the stories behind local fare, customers also increasingly want the products that they know and love to be easy to purchase from the comfort of their home. Thanks to a growing desire to support local shops, as convenience shopping makes a comeback, agile fine food retailers have the opportunity to win loyal customers through both their online and bricks and mortar stores.

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