In the most challenging of circumstances, it’s been a week of real progress. On furloughing, key workers, PHE guidelines on social distancing, we’re there.
In terms of food redistribution, the industry has worked brilliantly with charities to supply the most vulnerable and needy. Perhaps most significant is the stabilisation of sales: lower not just than the week before but the same week last year as hoarding and ‘accidental’ panic buying has subsided. While manufacturers and suppliers have simultaneously cranked up production to meet the demand - and perhaps plan ahead for when absenteeism worsens and ingredients from South East Asia become more scarce - the stabilisation means buyers may pause the delistings they were introducing, which must surely give hope to niche and challenger brands.
Nonetheless, the shopping experience is likely to feel very different in coming months. No one will want to browse as mask-wearing shoppers dodge one another, while public address systems urge them to complete their shops. And as social distancing measures are introduced, lengthy queues in store and in car parks (especially once the early spring sunshine gives way to rain), looks certain to result in more big weekly shops, as shoppers won’t want to go through the experience more than they need. Indeed it could be a boon to convenience stores. For the first time in living memory they’ve grown faster than any other channel and if the experience in Italy is anything to go by, out of town supermarkets may even see a decline in sales, while supermarkets in shopping centres are also under pressure to close.
It will also be interesting to see how consumption changes. Will we binge and comfort eat? Will we consume more calories? (We will certainly expend less.) One thing is for sure: while for some staying in will become the new going out, many consumers, whether furloughed or out of a job completely, will be in no position, let alone mood, to treat themselves.
And thought there’s been progress on a number of levels, in one area there has been none: on the funding side. The numerous schemes, including bank loans or cash grants, are clearly not working.
As suppliers and wholesalers desperately try to find new routes to market, it’s a race against time. Already around 50 foodservice wholesalers have ceased trading, furloughing staff or shutting their doors permanently, with a further 200 companies at risk of collapse within weeks. They account for 17,000 jobs and half the sector’s total revenue. If these firms are allowed to go under who will service their public sector contracts? Who will be there to supply hospitality businesses when they are finally allowed to open their doors again?
The situation looks equally desperate on the dairy side, with high demand on the one hand, but with product in the wrong place, in the wrong packaging and at the wrong price - and likely to go down further as the spring flush approaches.
If HMG doesn’t thrash out a rescue package for great swathes of the food and drink sector caught up in this - if it doesn’t find bespoke solutions - many more will go under. You can mothball an engineering business. You can’t mothball a cow.
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