More than half of the leaders across grocery retail and eating out segments in the UK are anticipating deteriorating trading conditions over the next 12 months, citing the cost-of-living crisis as the top reason, a new report by Lumina Intelligence has unveiled.
In 2021, 34% in grocery retail and 15% in the eating out segment anticipated that the market would deteriorate this year.
The Top of Mind Report 2022, released by Lumina Intelligence, also identified inflation, labour shortages, rising costs, availability and supply chain challenges as the main reasons for a deterioration in the next 12 months.
Around 83% of participants in the eating out segment said they have had to raise prices as a direct impact of increasing living costs, while 33% also pointed out a decline in consumer footfall.
Other Findings
The study unveiled that attracting and recruiting staff emerged as a challenge for 68% of grocery businesses, and 80% of eating out businesses.
More than a third identified Brexit as the main reason, while for 31% it was the nature of pay across the sectors and 27% highlighted the impact of the coronavirus pandemic causing workers to re-evaluate job priorities and move to different sectors.
The study identified squeeze on household budgets and value consciousness as the two most important long-term trends to impact the grocery and eating out markets.
Around 50% named squeeze on household budgets and 41% cited value consciousness as the most important long-term consumer trends, compared with 15% and 12%, respectively, in 2021.
For the grocery segment, the top three trends were finance-focused: squeeze on household budgets, value consciousness, and the changing behaviour of younger consumers.
In the eating out category, ethical consumerism emerged on top, followed by value consciousness and healthier eating.
Most Admired Brands
The study also noted that brands that align with consumers and drive innovation are most admired across the industry.
Aldi, Coca-Cola and Tesco were highlighted as brands that industry leaders admired in retail, alongside Warburtons, Arla and Lindt.
In the eating out category, brands that delivered consistency to consumers while innovating are most admired, such as Wagamama, Nandos and McDonalds, the study showed.
© 2022 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
