Wednesday 5 August 2009

A Healthier, Tougher Phoenix Arising From The High Street Ashes?

Opportunities abound, but not an easy ride…

Firstly, for those still with us, it can be useful for a supplier check its appetite for the coming High Street challenges by updating its own risk-profile based upon 18 months experience of the recession. This means checking whether the company and team are risk-seeking (taking carefully calculated chances), risk-neutral (some risk-taking) or risk-averse (avoiding all possible danger of being successful).

Secondly, the retailers should be assessed vs. likely future and much tougher competition such as national hard and soft discounters and the major grocery multiples, as these players continue to re-populate vacant retail space in the High Street, in a variety of offerings and formats such as non-foods, financial services, home entertainment, food-to-go, and even food-service, with the blessing of local government.

For branded suppliers these developments are particularly threatening in that hard discounters with their surrogate labels at rock-bottom prices, coupled with major multiples using recessionary pressures as an opportunity to grow their own label offering, will change the traditional 50/50 brand/own-label balance in the process.

For these reasons, it is crucial for suppliers to re-assess their competitive appeal vs. available competition from the point-of-view of the new savvy consumer shopping in the High Street. This ‘new consumer’ may be older, less mobile, but given the emergence of the multiples in the High Street, the new consumer-shopper will be worked upon by retail experts and cannot be taken for granted again, ever….

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