BWG Group releases results of major independent grocery retailer survey

BWG Group, one of Ireland’s leading food wholesalers and retailers through its branded retail estate of over 1,000 stores, has released the results of a new survey of SPAR, EUROSPAR, MACE, Londis and XL independent retailers, which includes an assessment of future outlook and key challenges, as well as the impact of COVID-19 on costs and operations.

The research, which was conducted over the course of the last two weeks, found that approximately 73 per cent of respondents feel positive or very positive about the future outlook for their businesses, with the remainder of respondents unclear at this time. A smaller proportion of independent retailers (67 per cent) are positive about the outlook for the wider grocery sector, with 31 per cent unclear at this time and a further 4 per cent holding a negative outlook.

While just over half of independent retailer respondents (52 per cent) believe that the economy will recover faster than the previous economic downturn in 2008, 15 per cent expect is to be the same and the remaining third (33 percent) expect the recovery to be slower.

Reflecting their predominantly positive outlook, 79 per cent of independent retailers are planning further investment in their businesses over the next three years. Approximately 28 per cent of these retailers identified the development of new foodservice offerings as a key investment focus for driving future growth, followed by expansion of retail premises (27 percent) and enhancements to in-store layout and design (18 per cent).

Interestingly, training and development was highlighted as the key focus for investment by 1 in 10 retailers.
With regards to the key challenges facing the grocery sector, employment costs were identified as the most severe challenge, followed by insurance costs and Covid-19 related regulations. Interestingly, Brexit was not considered as posing a key challenge by the vast majority of retailer respondents.

In terms of priorities for the new Government in supporting the grocery retail sector, 78 per cent of retailers surveyed indicated that they would like to see the Government reduce commercial rates, while 67 per cent believe that there should be an accelerated reduction in insurance costs.

Specifically relating to Covid-19, the research revealed that 98 per cent of independent retailers invested in new health and safety fittings in line with COVID-19 requirements with the majority of stores (74 per cent) spending up to €2,000 on upgrades, 21 per cent spending up to €5,000 and five per cent spending between €5,000 and €10,000. Additionally, 48 percent of retailers surveyed reduced their in-store retail display space to allow for greater social distancing with the majority of these (61 per cent) losing up to 10 per cent of floorspace with a further 25 per cent losing up to 20 per cent. 13 per cent of these retailers lost more than 20 per cent of their retail space.

The survey also found that 44 per cent of independent retailers introduced Home Delivery services in response to Covid-19 while a third (33 per cent) began providing Call & Collect services, with 70 per cent of retailers now planning to retain these services in the future.

As economic uncertainty continues to impact consumer behaviour, 42 per cent of retailers believe that Price & Value will be the most important shopping priority for consumers going forward. Where product quality and availability would have normally been considered key priorities for consumers, retailers believe that hygiene standards will be the second most important consumer priority going forward as a result Covid-19.

Commenting on the findings of the research, Group Chief Executive of BWG Group, Leo Crawford, said:

“This research highlights just how strongly our independent retailers responded to Covid-19 by continuing to provide an essential service to their local communities throughout the pandemic, all while accelerating the introduction of a number of new services and innovations aimed at delivering on the needs of consumers in a safe and convenient environment.”

“While the Covid-19 pandemic has significantly altered how consumers approach grocery shopping with health and safety, personal service and convenience all key drivers now, it has also reaffirmed the place of grocery retailers at the very heart of the local community, particularly independent retailers who are often multigenerational family owned SMEs.”

“From an economic perspective, it is encouraging to see positivity from our independent retailers regarding the outlook for their businesses, particularly as their presence in nearly every town and village across Ireland positions them as a strong barometer of economic activity. While the majority of our retailers remain optimistic and ready to invest in their businesses which employ over 23,000 people nationwide, there is a clear call out for action from the new Government on commercial rates and insurance costs, to sustain these businesses into the future.”

The survey results were gathered in advance of the annual BWG Foods Trade Show; the largest food industry event of its kind in Ireland which, now in its tenth year, is being hosted virtually for the first time. The two-day event, which began yesterday, and is expected to generate €25 million in sales, brings together more than 200 of Ireland’s leading indigenous and multinational suppliers spanning categories including health and wellness, fresh food, pre-prepared meals, chilled produce, beverages and confectionery, showcasing key offers to over 1,000 retailers, with sales generated via a dedicated online purchasing platform.