This week in global retail – Distributors, Beauty Specialists, and C-stores

by Retail Cities Global Team of Retail Experts

Question: What do foodservice distributors, beauty specialists, and convenience stores have in common?

Answer: A very vibrant longtail of traditional trade retailers and incredibly poor syndicated data tracking combined with robust opportunities for volume growth and lots of M&A.

The Retail Cities global team has just completed a busy week of what would normally be considered distinct/discreet projects. We spent the week looking at the clash between Club/Cash & Carry stores and traditional foodservice distributors while simultaneously looking at beauty specialist retailers and convenience stores. The funny thing: All three discreet projects had similar storylines and similar conclusions.? Let’s recap.

Similar Storylines

Each of these channels is seeing a similar storyline:

·??????? Macro forces – namely the 2020 pandemic and the 2022 inflation crisis – have forced the major operators to reconsider their investments in assortment, promotions, and services.

·??????? Trade clash – this brings them into a new series of trade clashes with retailers where there’s no history of trade clash in the past

·??????? Resolution – the result is both consolidation (with similar business models) and fragmentation (creating niche business models)

·??????? Future – the opportunities are robust for suppliers to grow volumes but not using the legacy toolkits for the channel

Similar Conclusions

·??????? Digital first – the leading consolidators in these spaces are embracing dCom as the main investment vehicle in creating innovation and reinvention

·??????? Differentiation first – the leading consolidators are looking to partner with brands that can be agile in PPA (Pack Price Architecture) to create exclusiveness and differentiation

·??????? Gen Z first – differentiation begins with acknowledging that Millennials (Gen Y) are no longer creating the buzz in what’s innovative, the Zoomers, of Gen Z, have taken over

The Road Ahead

Two things are clear on the road ahead.

First, major suppliers need to shift focus away from taking price increases to their customers and back toward driving volumes. Many are doing so already, so this is not news. However, with limited resources, suppliers are faced with difficult resourcing challenges to pursue new routes-to-market.

Second, new routes-to-market are where volume growth can be found.

The Support You Need

Retail Cities has launched our 2024 virtual workshop series for members and non-members. We are also continuing our e-learning series, titled, “The Next 10 Trillion” where we explore the ways that the world of retail is changing between 2024-2030 – a period in which global retail will expand by approximately $10 Trillion on an annualized revenue perspective.

We invite you to register for our next virtual workshop, which is open to non-members. The workshop is called “Europe’s Leading Grocers & Buying Alliances”. The session takes place Thursday, 21 March, at Noon CET. Boris Planer with Sebastian Rennack and Ray Gaul will provide perspectives on the big changes in European Grocery Retail in 2024/2025.? Register directly on ZOOM with just your name and email address. ZOOM REGISTRATION.