The corona crisis is shaking things up in European food retail: from an online boom to severe staff shortages, the same phenomena are popping up everywhere. An overview of the international state of affairs in food retail at this moment.
Less fresh, more hypermarket
There is no shortage of demand in European food retail in corona times, although demand is shifting. In France, wholesale sales of fresh fruit and vegetables have dropped by 40 % since the lockdown, while sales of shelf-stable products and especially toilet paper are peaking in many countries. The new purchasing behaviour is also accompanied by a shift in channels: whereas the convenience channel flourished before the corona crisis, consumers now prefer traditional supermarkets and online. In Italy, even the turnover of the hypermarkets – a format that has long been declared dead – has risen by 1.5%, explains the Italian founder of RetailWatch, Luigi Rubinelli, facing Lebensmittel Zeitung. Supermarket sales rose by 10 % in the first week of March.
The number of online orders has doubled: not only in France, where ‘Drive’ pick-up points are well established, but also at Delhaize in Belgium, demand has more than doubled. Ocado, the market leader in the United Kingdom, also doubled sales in its second quarter. The rise is so that some webshops simply can not cope and crash regularly. The French chains Auchan, Carrefour, E. Leclerc and Monoprix have had to limit their online offer; Delhaize has cancelled in-store pick-ups and waiting times are increasing in the Netherlands.
Employees are the new gold
Capacity is an obstacle for many retailers: for example, there are staff shortages in many locations. Lidl wants to recruit 2,500 to 5,000 people in the United Kingdom for the next three months, market leader Tesco is even looking for 20,000 extra temporary workers (and even that is rather trivial compared to the 150,000 new workers that Walmart is looking for). In other countries, such as France and Belgium, measures are taken to keep existing employees in work and to reward them for their efforts. This is done with bonuses, higher staff discounts or extra leave days.
Nevertheless, food retailers at home and abroad are forced to limit their opening hours. During these periods, the shops are also replenished and thoroughly cleaned and disinfected. A bill proposed by the Belgian government to allow longer opening hours (7 am to 10 pm) mostly came across opposition – including by retailers.
In various chains, the number of products per person has been limited to counteract panic buying. Colruyt in Belgium says it ensures that customers do not hoard, in Morrisons‘ webshop there is a limit of three items per product and at Aldi, customers may bring a maximum of four items of the same product.
Closing borders for retail too
Closing the borders creates even more new challenges: French farmers, for example, already have a shortage of seasonal workers for growing asparagus and strawberries, now that foreign workers are not allowed to enter the country. Retailers in Eastern Europe are also experiencing these problems, according to Lebensmittel Zeitung, as they often depended on seasonal workers from the Ukraine or Romania. Major players in the sector, including Kaufland, Lidl and Metro, are therefore offering salary increases up to 30 % for those who choose to work in these peak times.
Closed borders will also hamper the movement of goods, which in turn will affect supplies, while price increases are expected as well. EU countries which are not part of the euro area, but which often conclude trade contracts in euros, in particular, will pass on their increased costs to their customers, it is feared.
