As market and regulatory pressures build, where will European grocers find growth? The European grocery market will be worth €2,289 billion by 2022, according to the IGD, on track to grow at 3.7% (CAGR) between 2017 to 2022. While Turkey and Russia are driving most growth, Europe’s other large grocery retail markets – namely Germany, France and the UK – will experience a slower pace of expansion.
Caught between high customer expectations, low consumer confidence, rising operational costs, regulatory responsibility and intense price competition, these European supermarkets are under serious pressure to remain trusted and profitable.
While many are simply seeking to squeeze more efficiencies out of current systems and business models, others are turning to the latest AI software to streamline supply chain forecasting and promotions planning and save precious margin. AI is proving to be an essential tool in addressing these pain points, not only because it can achieve measurable improvements in forecast accuracy, but also cuts out waste and maximizes sales and service levels.
Meeting customer expectations
The beauty of operational efficiency in grocery is the positive story it allows supermarkets to tell their socially-conscious consumers. Our research has revealed a burgeoning public appetite for change regarding waste and consistency of service, which European supermarkets and CPGs need to address in the coming years.
When we questioned 3,000 grocery shoppers in France, the UK, and Germany, we found that 79% think supermarkets could do more to reduce their packaging and food waste. Indeed, 42% would advocate fines for supermarkets who fail to reduce their waste levels. Two thirds (66%) of European consumers would be more likely to stay loyal to a supermarket that had made a firm commitment to reducing food and packaging waste.
We also discovered that shoppers don’t trust the consistency of promotions and pricing across channels with only 37% confident that they are getting the same deals and promotions online as they would get in-store.
Risks to brand reputation
The key message to grocers from these findings is: If you aren’t addressing food waste, forecast accuracy and service consistency in your stores and online, you’re risking your brand reputation, and losing valuable margin due to inefficiencies. Salvation is within reach thanks to the latest AI software, which harnesses big data to deliver more accurate forecasting, replenishment and promotions planning. By using the latest machine learning techniques retailers can become far more precise when forecasting stock for general sales and for promotional pricing activity.
Technology can provide simple solutions to reduce the chances of shrinkage and waste – protecting margin and keeping customers happy. With AI it’s possible to solve real business problems by delivering highly accurate, automated mass promotional demand forecasting at chain, store and SKU levels.
Download our 2019 European Grocery Data Report today to find out more.