The grocery industry is going to be sorely tested over the coming weeks and months as people have begun panic buying of groceries, in response to the first person in New Zealand to get Coronavirus or Corvid 19.
Our local New World Supermarket isn’t very good at managing inventory levels as it is. It is a relatively new store, but knowing how good Foodstuffs training, software and merchandising is, I am still surprised.
A lot of supermarket purchasing is relatively automated these days, based on stock turn as much as anything. There are of course in-store and manufacturer promotions, but a lot has to do with previous sales history over a period of time. This presents a potential problem for departmental buyers and owner operators with limited experience, because as this potential pandemic continues over the coming months, sales history of staples like rice, pasta, tissues, sanitiser and other items that are selling out is going to be abnormal.
There is a high risk that many of these items will be bulk purchased, but not bulk consumed and we don’t really have a historic record of any similar situations from the past. Automatic ordering would see overstocks once things get back to normal, which will eat into the awesome profits this industry normally enjoys.
Of course this does depend a lot on whether we can import replacement stocks, given that much of the product, or its packaging or presentation comes from Asia where the worst of the situation is. If they lack the resources to export the product, then retailers might not be able to access it at all.
I’m hoping that manufacturers and wholesalers have been communicating effectively and are putting together a strategy. That should have been done and dusted by now, but it is of course not business as usual.
I also wonder about local producers, including those who normally provide for export, because they may not be able to get their product to market. This may provide an opportunity to refocus their marketing on domestic consumers, who may also need to change their ingrained eating behaviours.
Over the years we talk about the goal of being self-sufficient as a nation. We now have an amazing opportunity to create case studies on how to make this happen. I wonder if Massey University and others who have been working so hard on projects like Farm to the Plate, are now updating their teachings and partnerships to make the most of this opportunity.
What a great opportunity this is to do something smart! Whatever industry you are in this potential pandemic is going to see many winners and losers. Which will your business be? It depends on the choices you make right now.
What are some of the things you might want to consider now?
- Telecommuting. Whether it is because people are sick or to avoid getting sick, this is the perfect time to establish effective and secure systems allowing people who can, to work from home.
- Tourism. I’ve been listening to people, such as the Franz Josef community saying that disinformation is killing their tourism business. Yet I see next to know social media marketing, next to no domestic tourism marketing. What about all those people who cancelled their cruises or holidays in Asia or Europe? Kiwis are very well travelled, everywhere but in their own country.
- Transport. Our cities have terrible urban congestion right now. What are the strategies when people no longer feel safe using public transport? Imagine if all those people in the main centres who use bus and rail to get to work decide to drive?
- Hospitality. Will people start avoiding the Casino, the theatres, restaurants and bars? How are they going to cope? It’s time for companies to get smart. I don’t believe there are not creative ways that the industries can get together and ensure jobs for their people and cash flow.
We are going to learn a lot over the coming months. This is that perfect storm. There will be people who make things happen, people who watch things happen and people who wonder what happened.
They say fortunes are made in times of crisis. Let’s get our fellow innovative Kiwi thought leaders together and do something positive for ourselves!