Shifting consumer demand patterns, Brexit planning and availability of labour are likely to be among the most significant challenges for retailers and suppliers across the grocery and home appliance sectors in the coming months, according to the latest insights from the COVID-19 Supply Chain Collaboration Group.
The working group is comprised of more than 30 leading grocery and home appliance businesses such as Premier Foods, Unilever, and Bosch Home Appliances, and is facilitated by the supply chain and logistics consultancy SCALA. Group sessions have revealed that consumer behaviour patterns have changed significantly across these sectors over the past few weeks.
Specifically, many more people are now shopping online, and customers are leaning towards single shopping trips to larger stores, instead of shopping around and undertaking top-up visits as was the previous norm. Subsequently, convenience stores and discount retailers are often seeing unusual demand patterns.
With the traditional retail “peak” season, as well as the end of the Brexit transition period, fast approaching, questions are also now arising throughout the sector around how these seasonal challenges can effectively be managed when capacity is already stretched.
To overcome these challenges, retailers have cited a need for the sector to work more closely with suppliers to share data and information. Through this, it is hoped that greater supplier performance management can be achieved, facilitating innovation while gaining a clearer picture of the challenges suppliers face, creating greater transparency and understanding across the supply chain.
Labour availability and worker safety are also high on the priority list of both retailers and manufacturers. Safety of workers and the impact that more widespread testing will have on the availability of labour, changing advice on COVID-19, and availability of PPE have all been cited by group members.
Finally, third-party logistics providers (3PLs) have also highlighted a challenging shift in customer patterns for home deliveries. Whereas pre-COVID, peak delivery days were traditionally Wednesday-Friday, these days have now shifted from Monday-Wednesday. Interestingly, 3PLs are also reporting shifting product mixes due to retailers prioritising different product categories and SKUs.
John Perry, managing director at SCALA, said: “Going forward, suppliers should accept that the pre-COVID-19 world has gone forever and expectations will now be based around demand in the “new normal”.
“Looking specifically to the months ahead, a major question is how suppliers will effectively manage the seasonal challenges of summer, Halloween and Christmas given ongoing industry uncertainty. We must also consider the ever-looming spectre of Brexit – preparation for which was already virtually impossible - how will businesses be able to adequately prepare when capacity is already so stretched?
“The spirit of collaboration that we have seen so far between our member businesses and their wider supply networks has been heartening to see, and will be integral to ensuring the industry can continue to maintain the fantastic service levels it has shown so far in the months to come.”