Professor David Hughes of Imperial College London and non-executive director of Berry Gardens, told a Fruit Focus forum on consumer spending that the retailers are “completely crazy” to put so much emphasis on their value offers, at the expense of the higher-end brands that have taken them so long to establish.
But his session, ‘Coping with cash-strapped, nervous shoppers’, highlighted that the trade should keep an eye on unemployment levels in order to anticipate the price-cutting behaviour of the retailers.
IGD data from September 2008 showed that as the economy started to take a downturn, consumers claimed that they would change their habits by buying more products on promotion (40 per cent), eating out less (29 per cent) and shopping around (27 per cent).
Hughes maintained that this behaviour has been borne out throughout the recession. He said: “It is incredible that a supermarket such as Sainsbury’s, for example, should spend more than 10 years establishing its Taste the Difference premium label, only for it to move onto its Switch and Save campaign for its Basics range. They are destroying their own brand; it is completely crazy... It is Aldi and Lidl that started all this with their astonishingly low prices.”
Hughes, pictured, advised that in these tough times, soft-fruit growers should align themselves with a sales and marketing desk that has the best access to the best customers “because, like them or loathe them, the best prices are from these supermarkets”, as well as with organisations that have a clear vision of where they want to be in five years.
Above all, firms “cannot disappoint on quality” if they are to pull through the recession, he added.
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