Beware big manufacturers, warns Professor Hughes

Coverage from the AIMS Conference 2006

Bigger manufacturers and store groups will move into the markets where smaller processors and retailers have the potential to be strongest unless they are careful, Professor David Hughes of Imperial College, London warned.

"If you don't watch it they'll steal your clothes, they will become local and regional suppliers," he said.

While smaller processors might have their own problems big manufacturers are finding it tough with some major brands 'going backwards.'

Against this background the arrival of a highly successful American retailer in London next year is likely to transform the shopping landscape, he said. Whole Foods Market, which has some 150 stores in the United States and half a dozen small stores in the UK, is set to open a 90,000 sq ft store in Kensington, London that will have a profound effect on British retailing, he said.

Whole Foods is bright and much more 'theatrical' in the way it presents foods and shopping. By comparison British stores and shops have no theatre and are boring, said Hughes.

"They will have to up their game. I think retail butchers will struggle to hold on to their market share." Many consumers had been conditioned to expect 'more for less' in offers such as 'two-for-one'. But Tesco research suggests that while 17% of shoppers are price-value driven, 16% prefer premium foods.

"It's (premium) not just a little niche, it's a recognised sector," he told delegates.

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