2023 is here, and inflation uncertainty continues to pressure consumers to look for ways to save on their food and beverage purchases. For us retailers, the trend continues that our customers shop more frequently in supermarkets but in smaller quantities.
Again, we must work on matching the product assortments in our supermarkets, starting with the basic weekly shopping basket and seeking to keep the impact of price rises to a minimum.
Since 2020, one of the main pillars of Hispanic retailers has been the generation of millions of new and loyal customers to our stores. With this unforeseen recession, our main objective, despite the challenges, will be to maintain that loyalty.
As we have advised on previous occasions, eliminating unnecessary costs will be indispensable to lower the prices of basic staples, including a mandatory reduction in the stock of products.
“If a product does not sell, it is an excellent example that it is unnecessary.” Although it may sound contradictory, if there is one thing that characterizes U.S. Hispanic supermarkets, it is the breadth of assortments and offerings. This should continue to be the case, but renouncing the range of variety, which means that it hardly impacts sales, will be the key. We are in the era of practicality, of the return to the basics.
Remember that having the most extensive selection does not always benefit consumer choice. It creates confusion, increasing the likelihood of delaying the purchase decision and “forcing” the customer to stay longer in supermarkets.
The modern retailer no longer works like that. Our customers want convenience and speed in the buying process, resulting in their loyalty to our store or chain of stores and a much more frequent level of visits. If we add to this the fact that every day the customer is looking to save every penny, we will have perfectly understood the need to update our commercial strategies for this new year.
Private Label as a Shield and Brand
All supermarkets sell and compete for brand X or brand Y because they are mainstream brands and market leaders. On the other hand, the private label is the one that our competitors cannot sell. It is our brand, the one that represents our entire business.
With the economy in full savings mode, all our strategic commercial objectives should be aimed at the private label. Without sacrificing product quality, the private label will be our shield and brand, but it is not advisable to create private label products without first having carried out previous studies.
The first step if we are starting to create the private brand will be to start with the products of the highest rotation in our supermarkets, which almost always coincide: canned vegetables, oils, rice, bread, cereals, cookies, and so on up to practically all the products necessary for the supply of the essential family basket.
I was able to attend the last edition of the Private Label Manufacturers Association (PLMA) Trade Show in Chicago, and this was the one time I was able to meet more of my Hispanic retail colleagues. It’s no coincidence we are focused on meeting the needs of our customers, and the near future is going that way.