Booker boss advises food industry to change strategy
Food suppliers need to rethink their strategies and avoid being “ground down” by the supermarkets for “limited growth”, according to the chief executive of wholesale giant Booker.
Speaking at the 2014 City Food Lecture in London this week, Wilson told the pan-industry audience, that the retail landscape was changing and the time when the supermarket sector was the only bet in town was coming to an end.
In a lecture entitled “growth outside the supermarkets”, Wilson said that with changes to the global food sector, the industry had seen the “hare that was the supermarkets become the tortoise”.
He said while supermarkets had grown to dominate the retail scene in the past 50 years, changes, such as technology and the rise of the discounters, were opening up new channels of supply to the consumer: “For the last 50 years, there has been one good bet – get behind the supermarkets, they offered huge growth and scaleability, but that started to go wrong in the early 2000s. There are huge opportunities in this new grocery landscape for astute suppliers. Those supplying the supermarkets need to avoid being ground down by their customers for limited growth.”
In the question-and-answer session following the lecture, Douglas Gurr, vice-president with Amazon UK, said the changes being wrought on the food retail sector were nothing new and had been seen before time and again in history. “Technology is changing the way people shop, and suppliers need to adapt,” he told the audience. However, when asked whether the new supply routes offered solutions for those selling fresh perishable products, Gurr responded that he had no answer for that at the moment.
The difficulty of providing food at acceptable prices was also raised, with Wilson admitting it was a difficult act to balance. Alluding to the horsemeat scandal, he said that simply focusing on cheap would only lead to problems, but there was a need for cheap food: “I never thought I’d see, in my generation, a need for food banks, with people struggling to feed themselves. But we in the food industry need to ensure that even if food is cheap, it has to be the best quality it can be.”
He also questioned whether enough had been spent back down the supply chain, and pointed out that while the retailers had spent £12bn on new retail space, the same could not be said for investment in production.
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