Tag: equilibrium

Hunting & Gathering The Modern Way

We might be a fairly sophisticated lot, us humans,  but there  are some basics facts in play, which apply regardless of where we live, of our gender, our age or our occupation.  I want to focus on just one of those facts for now; namely, the fact we need to eat.  And as we , at least in the OECD countries, lead relatively charmed lives these days.  We do not even need to make time for hunting and gathering in the traditional sense in our busy schedules… we are able to just go shopping.

h-and-g-lg-1a9km9uThe places where we tend to shop for food are typically single category stores such as bakeries, butcheries, delicatessen stores, open air markets and supermarkets.  Nobody makes us favour one over the other, nobody stops us from mixing and mingling, nobody says we need to shop daily, nobody stops from just shopping fortnightly and, most certainly, nobody prevents us from placing whatever we fancy into those shopping trolleys. Naturally, there are constraints, such as the depth of our wallet, our dietary needs, distance between store and home, our mode of transport; but those factors not withstanding, life is pretty easy.  Our mind articulates a need and hey presto, we are down at the store, meeting our mind’s request.  Wouldn’t you agree that there is a far higher degree of certainty to that model than there is to the traditional style hunting & gathering lark?

So, if we are in agreement of that, why is it that not one week goes by where one or other consumer group gripes about the price we have to pay for our food?  Not shopping is not compatible with the structure of the post-industrial age we live in. Period.  The provision of shops where we can hunt & gather in a style more appropriate to today’s society is therefore a value add offer in its own right, regardless of what type of shopping experience we choose and prefer.

I would like you to think about that last sentence a bit before you read on….

Food shopping outlet price comparisons are a dime a dozen.  Everywhere.  And they all follow the same model… Supermarkets get the bash for being too expensive, green grocers tend to be cheaper but possibly lack range and discount stores sit somewhere in between.  Right?

Well, wrong.

Channel 4 in the UK published a price survey,  at the end of January 2013.  It makes for entertaining reading.

Firstly, their survey was based on three items only; “everyday fruit & vegetable items” they called them.  I can accept that description for Broccoli.  Pears are not really an everyday item and Coriander most certainly is not.

Secondly, the survey was conducted in “32 locations across the country”.  Hm, given the population density of the UK, this is certainly not representative by a long shot.

Thirdly, and here is a new aspect for us here down under, the three categories sampled were a

  • large supermarket,
  • an independent trader (greengrocer)/ local market,
  • a convenience store version of the large supermarket.

Well, this is one for the books.  The penetration rate of these shoebox supermarket mini versions is now such that they come under the spotlight of the price nazis consumer rights media.

I shall leave you to read the survey results in your own good time but, for me, the issue boils down to this:  what price is reasonable for convenience?   We will pick that theme up again in a little while.





Who Gets To Drive The Produce Bus?

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.