Comment: Retailers and suppliers can prosper in the age of austerity

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It’s hard to avoid the gloomy economic news at the moment. I understand the competitive challenges facing retailers and suppliers alike.

Our shopper insights tell me all too clearly how consumers are changing their habits.

And like you I don’t hear much talk about the economy bouncing back anytime soon.

But no matter how tough the environment, I would still argue that our industry should not be so hell-bent on destroying value through its current obsession with price. Instead we should be working together to unlock the growth opportunities that exist.

And is the current approach working? Last year, we saw how the huge increase in temporary price reductions across the grocery market (and a prioritisation on corporate mechanics such as round-pound and half-price deals) seemed to do little but reduce volumes, restrict basket spend and suppress value.

So I think it’s time that we again made growth our strategic objective.

Let’s be frank: not all categories are equal. The soft drinks sector is proving to be pretty resilient despite the economic headwinds and I believe there is still plenty of headroom for growth, but only if we work together to unlock these opportunities.

We have invested considerable time and money in the past 18 months to understand our shoppers better and - thanks to our partnerships with key customers - we are responding to their needs in a number of ways. Take brand blocking in supermarkets. This makes it easier for shoppers to find the product and the packs they want. We have also worked with independent retailers across the country on a ranging and merchandising initiative called Chilled+ that allows these outlets to develop soft drinks sales.

Growth is coming through pack innovations such as our 375ml bottle which has filled a need for a smaller, resealable pack, particularly among women. We will soon be launching a 1.75litre bottle in an iconic contour shape exclusively in convenience stores - meeting a shopper need while providing a genuine point-of-difference for these retailers.

But I am well aware our industry must also find ways to grow in a responsible and sustainable way. That’s why we are accelerating our efforts to support the growth of our diet drinks - in line with the calorie pledge commitments we made under the Government’s Public Health Responsibility Deal - as we celebrate the 30th anniversary of Diet Coke; drive momentum behind Coke Zero; and look to launch new ideas in low-calorie products.

And we have made some bold bets around our plans to be a leader for sustainable packaging, not least through our investment in Continuum Recycling, our joint venture with ECO Plastics, which has changed the plastic bottle recycling industry in this country.

I believe it is possible for retailers and suppliers to prosper in the age of austerity. But if we are to succeed, we must focus on the ways in which we can work together to unlock growth by offering shoppers genuine value, rather than just the lowest possible price.