Back to the basics

In the United Kingdom, talk that the worst of the recession is over is getting louder. There’s still a long way to go, of course, but signs of an economic recovery are appearing in the retail seafood sector.

One indication is that sales of premium fresh seafood products are growing again, according to Andrew Carter, senior buying manager for Tesco, the UK’s No. 1 supermarket chain and one of the world’s top retailers. During the recession, sales of these products slumped, he said, as customers traded down because money was scarce.

Consumers who began frequenting discount stores such as Aldi because of low prices are now returning to their previous store-of-choice, he added. “The top end of the retail trade is showing signs of buoyancy,” said Carter. “The other end is rather quiet.”

Carter spoke at a value-added seafood conference held in London at the end of last month. He described to delegates how frozen seafood product sales had surged during the recession. “Frozen fish was the only sector of the retail market to show growth,” he said.

Not surprisingly when times are hard, sales of pricier “healthy” products decline. “People were not prepared to pay a premium for organic foods,” said Carter. Another effect of the recession, he pointed out, was that people cut down on eating out in favor of eating in, and this helped boost sales at upscale retailers such as Waitrose.

But even here price was still an issue. Although preparing food at home is growing and people are seeking to replicate the dining-out experience, “they aren’t prepared to pay for it,” said Carter.

In this time of rising unemployment, people became uncertain about the future. “What they do know is that it costs more to live,” said Carter. As a result of reduced incomes, customers wanted more for the same amount of money, or the same for less money. However, with seafood being the most expensive protein, consumers switched to poultry.

But get seafood prices right and people will buy it, said Carter. “Fish and chips has made a comeback, and our GBP 2 pack seems like a good value for the money,” he explained.

Because people have less money to spend and less time in which to spend it, not surprisingly Tesco has been looking hard at its seafood counters. During the past 12 to 18 months, the retailer has reduced the number of lines it carries from more than 100 to 85 to 90. “This has allowed us to concentrate on better selling lines, plus bring in new ones,” said Carter.

“Salmon, cod and haddock are our three core species and drive sales, but there is a place for pangasius because of its [low] price. And sales of river cobbler [the name under which Tesco sells pangasius] have significantly improved,” said Carter.

The message coming across is loud and clear. In order to retain customers during a recession, retailers have to go back to the basics and look at every aspect of their business. It’s easy to be complacent when times are good, but complacency won’t cut it when times are hard.

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