Problem Solver: Innovation always a key ingredient in food retail market
Q: What is your view of the food retail sector in Ireland today?
A: Sometimes you read about other sectors in the media that they have 'reached maturity' and I think we could be looking at this for the Irish food retail sector.
When I started out in business, food retailing involved lots of staff in white or brown coats behind the counter who would happily serve customers. Most of those customers didn't pay for their goods and had credit with the shop which they settled at the end of each week or month.
It was a different era but what it allowed us to do in Superquinn was to innovate at a very fast pace. I had travelled the world in search of new ideas which were just beginning to emerge and we were quickly able to implement these. That allowed us to lead the market with innovation.
We got at least four decades out of creating substantial competitive advantage over other food retailers, and while they always followed many of our initiatives, we were able to stay a step ahead.
That is much harder in today's environment. First of all many areas are now saturated with supermarkets which doesn't leave a whole amount of space for new ones, and secondly the pace of innovation has slowed as the Irish food retail sector has elevated its standards to a global level. That leaves less room to find the new 'high ground'.
The innovation in more recent years has all been about price and the communication of value.
However, seven years into that agenda there is a danger that it has now become a little boring.
In my opinion, some of the larger supermarkets have become too close to each other in format and are overeager to copy what each other is doing, which has led to a 'sameness' in the market.
I also note with interest that some of the last remaining independent supermarkets like Nolan's in Clontarf, Jerry's in Skerries or JC Supermarket in Swords are all enjoying sustained popularity with consumers despite a very different positioning.
Of course we also have to be mindful that the consumer has changed their shopping patterns and many consumers are more than happy to shop at several supermarkets over the course of a month.
In summary, while the market has matured and while there will be less room for radical innovation, I still see a role for good merchant retailing where the consumer remains centre stage in the model.
Send your small business questions to firstname.lastname@example.org