Irish retail leaders are focusing more on value and lower-cost alternatives across all areas of consumer goods as rampant inflation, caused by issues including the war in Ukraine, hit customers in the wallet.
Kieran Duff, a Dublin-based consultant at Merc Partners Spencer Stuart, recently contributed to US-headquartered Spencer Stuart’s report examining the future of retail and how CEOs are rebuilding for the future.
On inflation and its effect on the retail sector, Duff said energy price increases and the impact the war in Ukraine would have on supply chains and raw material costs had meant the issue was “particularly acute”. He said the issue was more to the fore over recent months.
“[Inflation is] bringing to the forefront – maybe in a way that we haven’t seen in a number of years – this strive for value and lower-cost alternatives,” he said. “I think that goes across food and beverage but also into other household consumables, whether it is consumer durables, clothing or any of the other shops you see on the high street.
“Without a doubt, there will be that additional drive for a focus on cost.
“That’s not just discounting for the sake of it or compromising on margin at the business, but a genuine push right across supply chains to use technology, smarter sourcing and delivery to take cost out of the supply chain and deliver value.”
Duff said there would still be demand for convenience at one end of the market and a willingness to pay for that – for example, through personal shopper services such as Buymie.
The Spencer Stuart The Future of Retail report involved nearly 30 CEOs from businesses with operations in 116 countries and over two million employees. It included insight from Noel Keeley, chief executive of SuperValu owner Musgrave.
“There are some permanent changes that will sit with us on the back of Covid-19,” Keeley was quoted as saying in the report. “It has changed the way people access food and when they do so. The challenge for food retail will be to deliver food solutions to people when they want them, where they want them, regardless of channel.”
Duff said some of the key findings for Ireland included the great leap forward to digital among Irish retailers and greater expectations from consumers.