Last month, there were nearly 80 million extra shopping trips, with shoppers spending £2 billion more on food and drink than in 2019. The wide impact of the Coronavirus also affected what an average grocery basket looks like, and the changing demand and marketplace are resulting in challenging times for the supply chain.
So far, the thing that changed about the food supply chain the most is the increased demand – shoppers are panic buying, retailers are racing to fill shelves and manufacturers ramping up production, however the future is likely to put more pressure on the supply chain. A large proportion of UK’s food comes from abroad and the border restrictions, workforce reductions and logistical challenges are likely to place an increasing strain on the supply chains in the coming months.
Adapting to the unexpected
Grocery retailers are seeing demand very similar to Christmas, with the BBC reporting that supermarkets saw more business in March than Christmas. During 16-19th March 88% of households visited a food store – apparently that equated to 42 million extra food trips across 4 days. Without having had the opportunity to prepare for the demand increase of over 25 percent it is hardly a surprise the supply chain is in distress. On the supply side, many regions and countries who present a significant proportion of the supply chain have been affected by the restrictions created by quarantines, creating potential delays and instability.
With the BRC revealing £1bn of extra food was in households’ cupboards by last weekend, many suppliers have been seeing demand surges of more than 50 percent, and some as much as 75 percent. As retailers adjust to the new normal, significant changes are being applied to orders from suppliers, focused on keeping core lines going, as well as pack size changes to help families stocking up. Tesco is already focusing on producing larger sizes of milk and Morrisons reducing its 17 bakery lines to seven, suggesting that others might be following these examples.
Businesses that invested in digital transformation over the last few years are now seeing the fruits of those efforts as e-commerce has seen a significant growth over the last month as a result of the pandemic. The digital nature of these businesses enables for a more connected network able to respond to uncertainty about demand fulfilment. It also helps to automate the key elements of the supply chain, reducing the dependency on people who might not be available due to quarantine or social distancing.
The power of collaboration
The Covid-19 crisis presents significant opportunities to collaborate with suppliers, customers and industry peers. We have seen retailers uniting with manufacturers, warehouse workers and supply chain operators to implement emergency policies to manage the changing demands.
More so than its weak points, the crisis has highlighted the food system’s flexibility and strength under pressure. M&S has partnered with Deliveroo to sell a range of food essentials, to meet demand from shoppers who are self-isolating or practising social distancing. Deliveroo has also launched a food range ‘Essentials by Deliveroo’ offering household basics to support the increasing demand.
Restaurant chain Leon was also quick to respond by transforming its fast-food restaurants into mini supermarkets selling ready meals for customers to eat at home. Additionally, the company partnered with Absolute Taste to build an online platform allowing customers to order via click and collect. The platform will also be open to other food service businesses to enable them to sell directly to customers.
Whilst many shoppers are worried about potential food shortages, experts across the food supply chain continue to reassure everyone that there is enough food for everyone. Empty shelves don’t mean there’s a shortage of food and supplies. They simply mean stores and supply chains need to catch up with increased demand.
Power to the People – all of us
What is wonderful to see is the speed at which large and small businesses alike have altered their supply chains and customer offers to meet these changing habits. Locally pubs have become takeaway restaurants, and food providers to retailers have opened up doors to sell standard boxes direct to the public. Sales & Marketing professionals, entrepreneurs and small business owners alike have sought new avenues; and across the Procurement and Supply Chain profession we have assessed and gathered information collaboratively to make it all happen. Change is a constant, and our ability to innovate and adapt is breath-taking.
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