What comes to your mind when you see a vehicle like this? Brightly coloured, two front bits and no rear end, a re-engineered middle and a ruddy great banana on the top of the roof?
I don’t know about you, but what comes to my mind is that this very cleverly put together promotional vehicle reflects the state of our produce retail industry.
The two front bits represent respectively the supermarkets – Foodstuffs (New World, Pak N’ Save) at one end and Progressive (Countdown/Wooolworths/Foodtown) at the other. The ‘bit in the middle’ is the rest of the retail industry – the urban green grocers, the fruit shops at the edge of town, the gate sellers, the farmers markets, the opportunitists at the roadside selling produce from their vans, the office fruit bowl stockists and the internet ‘box of stuff’ vendors.
There are several questions that play on my mind in connection with this state of the retail industry:
- How big are the two front bits, i.e., the supermarket produce share, really?
- What is a realistic level for the supermarket share of produce sales before it disturbs the industry value chain equilibrium?
- To what extent is ‘the middle bit’ dependent upon the two ‘engine drivers’ for its well being as opposed to being in control of its own destiny?
- How will the local New Zealand model be impacted by international trends in the next five years?
Let me start with this observation.
Fruit and vegetable ranges stocked in supermarkets are continuing to reduce, driven by item based shrink and profit consideration at both merchandise and buying office level. Buyers and category managers whose performance is judged by the profitability of narrow product categories are not prepared to gamble by stocking niche products. Store staff with insufficient training are not best placed to sell non-mainstream produce. So if I am looking for whitloof, fennel and red currants, I know that I will not find those in the supermarkets.
This thread will be continued over the next few weeks and comments are as always welcome.