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Sustainability key theme for retailers, states latest IGD report

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The sky is the limit for retailers that respond to sustainability issues and those bold enough to experiment with new formats and strike into emerging markets, according to the latest Global Retail Innovation: Ten to Watch 2007 research by international food and grocery expert IGD.

IGD has compiled a list of 10 retailers around the world that it feels show strong growth prospects, best practice and innovation, and says sustainability, innovative formats and emerging markets are the key themes for retailers playing a starring role in 2007.

“A company`s stance on sustainability is fast becoming a key factor in consumer buying decisions,” says Jonathan Gunz, report author and senior business analyst, IGD.

“Sustainability has to be backed up by substance and robust measures. It is not just about a branding exercise, although getting the brand communications spot-on and reflecting consumer concerns are crucially important. Consumers are increasingly savvy. They will see through sustainability half-measures that aren`t backed up by genuine action,” he says.

IGD visits hundreds of retail outlets world-wide, and says retailers that address consumer concerns and are responding to market challenges feature strongly this year.

“Flexibility and a willingness to take risks is a key requirement for those embarking on format experimentation, as is an understanding of consumer needs. Another pre-requisite is management vision and passion. These retailers have some exciting stories to tell,” says Gunz.

UK`s Cook , a producer and retailer of frozen ready meals that look and taste homemade and are sourced locally, makes the Ten to Watch for the first time. IGD notes Cook encapsulates many of the hot trends shaping the global retail market, including convenience, provenance and nutrition.

Commitment to corporate social responsibility boosts Migros, Switzerland`s retail market leader, which has long been a champion of common sourcing standards and food safety. Migros has a strong ethical brand image and connection with consumers through private labels.

Australia`s Macro Wholefoods Market is also capitalising on the green agenda in its home market, targeting the conscious consumer with a product range of more than 12,000 organic, natural and fair trade products, each of which has ‘a story to tell` about the source of production and suppliers used.

Format experimentation is also to the fore in the Ten to Watch 2007, with Norway`s Deli de Luca blurring the traditional boundaries of convenience and quality foodservice through its city-centre stores.

American East Coast forecourt convenience operator Wawa also breaks the format mould through its ‘food first, fuel second` approach to quality foodservice. Customers can even order sandwiches while filling up at the petrol pump.

Striking out into emerging grocery markets is another key theme, as online giant Amazon launches strongly into online grocery retail, and India`s Reliance Retail takes first-mover advantage in the strategically important and dynamic Indian retail market.

“These retailers are successful in finding the Retail X Factor – that is, something unique and special that makes their concept stand out from the crowd. It is the best way to respond to rapidly evolving consumer trends,” concludes Gunz.

Global Retail Innovation: Ten to Watch 2007

Retailer Country Key feature Turnover ($US mn) Website
Amazon United States Major online brand now diversifying into the grocery sector 10,711
Biedronka Poland Ambitious discount retailer setting the pace in Poland 2,156
Cook United Kingdom Innovative premium concept focusing on the frozen ready-meal category 21.6
Deli de Luca Norway Unique city centre convenience concept with strong foodservice focus 39.65
Macro Wholefoods Market Australia Local organic retailer with strong brand focusing on service and healthy living N/A
Migros Switzerland Swiss market leader with strong brand presence and ethical focus
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