Amid challenging market conditions, Australia’s growing demand for fresh convenience options has continued to drive new retail opportunities for the grocery sector in 2024.
As another festive season and new year approaches, it’s clearer than ever that retailers must continue to deliver value-packed offerings to maintain a strong competitive position in the independent retail sector.
The whole country is keenly watching to see how supermarkets adapt to increased regulatory pressure. Closely linked is how shoppers’ habits will influence monetary policy and in what ways supermarkets will continue driving technological advancements for both convenience and greater price efficiencies.
As a network of independent supermarket businesses, Australian United Retailers’ outlets serve the needs of communities across Australia, from large format stores in metropolitan cities to local grocers in remote locations. Each of our 570 stores is unique and requires a different strategic plan – that’s what sets us apart.
There is flexibility and diversity within pricing programs, which supports stores to remain competitive in their own market. This means our network represents the trends and insights influencing the Australian independent supermarket industry.
With sustainability, technology and operational efficiencies at the forefront, independent supermarkets are not just keeping pace with change – they are getting creative to meet rising cost pressures and increasing competitiveness across the retail sector.
We take a look at the trends and opportunities shaping supermarket retailing in Australia:
- Food-to-go and meal solutions
Supermarket retailers are increasingly focusing on convenience by expanding their range of fresh, ready-to-eat meals and snacks to cater for growing demand from busy professionals, families and health-conscious customers.
Australians are embracing fast, healthy meal options that don’t compromise on quality, with ranges typically incorporating nutritious choices that cater to a variety of dietary needs, food preferences and price points.
Advancements in sustainable packaging options are now hitting shelves and the reduction of non-recyclable, single-use plastics has progressed significantly in the past 12 months.
Insights from overseas highlight a significant rise in convenience-based offers, particularly in-house prepared items utilised as sales drivers.
Customers globally are seeking premium products – which look impressive and taste great – to save them time and effort in the kitchen.
2. Loyalty programs and promotions
Loyalty programs and promotional strategies are set to play an even greater role in the supermarket sector over the coming 12 months.
With the rise in competition and additional pressures on disposable incomes, we expect to see more promotional frequency and greater depth of discounts – matching the approach taken by FoodWorks stores across the country.
Focus across the industry is firmly on strategies to foster brand loyalty, protect customer foot traffic into stores and maintain basket values.
Australian United Retailers is meeting this challenge head-on, preparing for the launch of our brand-new loyalty program in early 2025.
3. Explosion of retail media
Retail media growth goes hand-in-hand with data-driven loyalty programs.
The value and demand for advertising space in digital and physical locations have risen sharply, offering significant opportunities for retailers and advertisers to reach shoppers at a critical point in their buying journey.
Whether browsing online or in the supermarket aisles, advertisers recognise customers are engaged and ready to purchase – making the most of more interactive and informative advertising opportunities. Most importantly, digital channels and displays offer great scope for strategic and targeted activity compared to more traditional static and mass marketing methods.
4. Private brand quality and price changes
Customers are buying more items on promotion, but they’re also turning to private-label products to stretch the household budget further.
In recent years, ‘home brand’ products have evolved from basic, budget-friendly alternatives to high-quality, premium offerings that rival branded goods.
With a focus on quality ingredients, innovative packaging and growing ranges, private-label products are striking a great balance for value-focused shoppers without sacrificing quality.
In particular, the growing choices for organic, gluten-free and specialty products in this format have been embraced by customers.
There’s no sign of this trend slowing down with many customers discovering the appeal of private-label products and pleasantly surprised by the quality.
The opportunities for growth and transformation across the supermarket industry are significant. Independent retailers who are nimble and willing to adapt will be best placed to meet the market shifts and remain competitive in the year ahead.
Robert Markezic is national operations manager at Australian United Retailers.