Eighty-five percent of retailers are investing in new technologies to improve the customer experience, according to The Food Retailing Industry Speaks 2023, research from The Food Industry Association. Food retailers and suppliers facing challenges that include workforce changes, inflation, supply chain hurdles, competition, and shifting consumer habits, are investing more to future-proof their businesses.
The report found the industry is relying on innovation to increase efficiency across product supply and assortments; investing in technology for worker recruiting, training, and retention, and pay increases to ease labor issues; and prioritizing competitive pricing strategies to provide value and maintain customer loyalty.
“Food industry companies are maximizing efficiencies and, in some instances, creating strategic redundancies in the supply chain in their unending effort to ensure consumers have access to the products they love,” FMI President and CEO Leslie G. Sarasin said in a statement. “The industry is also heavily invested in bringing more creative approaches to product assortments that will continue to delight and inspire their customers.”
To maintain customer loyalty in this inflationary environment, retailers are fine-tuning competitive pricing for products and categories and increasing consumer communications about value. Most retailers say they are also showcasing private brands as strong value alternatives.
Retailers reported leveraging perimeter departments to attract and retain shoppers. Eighty-eight percent of food retailers differentiate themselves by selling local assortments, with 73 percent increasing local items in SKU allocation. Additionally, 85 percent mobilize fresh prepared and foodservice programs to stand out.
When asked about supply chain issues, 44 percent of food retailers and 32 percent of suppliers believe supply chain disruptions will negatively impact their businesses in 2023 compared to 70 percent of food retailers and 82 percent of suppliers that believed the same in 2022.
“The positive news is the industry is signaling its expectation that supply chain disruptions will continue to lessen as we move through 2023,” said Sarasin in a statement. “Across the food supply chain, we are taking the lessons learned over the past few years to change the way we invest in our employees, innovate to future-proof our businesses, and, most importantly, adapt our operations to better engage with and serve shoppers.”
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