Comment: The grocery revolution will not just be digitised

Big changes at Morrisons, in the form of major job cuts, have led some to question the future of the big grocers as the sector undergoes seismic change. This, of course, is pure nonsense.

Yes, fewer big stores and hypermarkets will be needed as the online and click-and-collect models embed and evolve. But speculation that the future of all grocery is online is naive.

It may be hard for younger readers to believe this, but even the prospect of real-time video shopping leaves many customers cold and wanting the real-world experience of bricks and mortar.

“The relentless growth of convenience stores will continue — this is where the battle of the big grocers will be fought”

Phil Dorrell, Retail Remedy

What is certain, is that the relentless growth of convenience stores will continue — this is where the battle of the big grocers will be fought. The symbol groups and independents are in for one hell of a fight in the years ahead.

Also, while Morrisons has once again left things to the last minute, the reality is that the big grocers have been evolving for some time to adapt to the brave new world of online, brutal competition and the increasingly promiscuous customer.

But unlike Morrisons they’ve done it gradually over a period of years so it hasn’t felt so extreme.

For some time, decisions about range, use of space, pricing and promotions have become increasingly centralised, driving consistency and brand execution as well as reducing cost.

In future, we will see even more of this centralisation, where ultra-rationalised stores merely execute commands from on high. Things like consumables ordering, labour scheduling and even store task building will all be done upstream, removing the need for a higher paid decision maker in every store.

With every passing year we can expect all the major grocers to deliver ever more automation, whether self-serve counters, checkouts or app-based shopping. But the way they do so will be critical.

For some, automation will be all about the associated reduced labour costs, ie the bottom line. For others, and this is a subtle but crucial difference, automation will be a way to drive customer satisfaction through enhanced convenience — think the Aldi and Waitrose business models.

The grocers that ultimately survive and thrive will be those that see the digital revolution and new retail landscape as a challenge, a source of excitement. The ones whose reaction is to simply cut costs and automate for automation’s sake will almost certainly fade away.

So who’s hungry for change and who’s not?

• Phil Dorrell is director at retail consultant Retail Remedy. He can be found tweeting @retailremedy