'Price factor becoming far less important for shoppers', says Tesco U.K. - FreshFruitPortal.com

'Price factor becoming far less important for shoppers', says Tesco U.K.

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'Price factor becoming far less important for shoppers', says Tesco U.K.

Shoppers' needs are changing vastly in the U.K. and a representative of supermarket giant Tesco says retailers must embrace the new opportunities this implies.

Tesco's Simon Mandelbaum

Tesco's Simon Mandelbaum

Speaking at the Produce Marketing Association (PMA) Fruittrade Latin America, Tesco U.K. sourcing manager Simon Mandelbaum told attendees why prices had become far less important for consumers over the last five years but the opposite was true for freshness and traceability.

Mandelbaum attributed the price factor's declining importance to the prevalence of online shopping and the consequent price comparison websites, which had led to retailers now charging very similar prices for their products.

"What [price comparison websites] have meant is that for retailers there's no hiding place - as a customer you no longer have to drive 5, 10, 15 miles to another supermarket in order to compare prices for yourself," Mandelbaum said.

"The service is provided for you online, you can sit on the couch watching television and checking prices yourself. That has meant retailers have had to respond to this price challenge, and how they've done that is actually to say to customers that if they could have bought their shopping cheaper in another retailer cheaper, we'll give them the difference.

"And this has been seen by Tesco, by Saintsbury's, by Asda and by Waitrose, just to name a few."

He said tha since 2009 the price had dropped from consumers' most important factor to the fourth most important, while taste and freshness had shot up to the top.

"How as a retailer can we differentiate ourselves so the customer chooses to come to ur rather than competitors? It comes back to those factors that we highlighted earlier - freshness, taste and traceability," Mandelbaum said.

Retailers are doing an awful lot to improve freshness, according to the Tesco representative, largely by way of innovative packing, new displays, and re-evaluating how best to transport the product.

Mandelbaum also said supermarkets were putting a huge amount of work into convincing customers of their products' taste benefits and perspective, partly through online and in-store literature showing recipe and flavor ideas.

However, he said perhaps the most important aspect was the work done directly between retailers and their growers.

"They key for us is varietal development - we spend huge amounts of our time visiting and meeting with the farmers themselves," Mandelbaum said.

"We're spending a lot of time visiting our grower base to see what they've spent on their trial, as well as they're commercial plots.

"We have to understand what's coming through the new chain of varieties, what are their flavor profiles, and where do we see the varieties coming in the next 10 years on our shelves."

Last but by no means least, Mandelbaum said traceability had become another essential metric to many shoppers, and it must therefore be treated with equal importance by retailers.

"There have been too many huge scandals within U.K. retail in the last five years around confusion between traceability and our sourcing standards," he said.

"It's led to a number of retailers changing their ways of working on how they source products, becoming more directly involved with growers and retailers around the world, and it's vital.

"We need to be personally understanding of the standards, the ethical standards, the technical standards, as well as the flavor profiles and the seasonality and the business structures within those supply chains."

He explained how the recent emphasis on traceability was an 'evolution' in the U.K. retail sector and had led to some very different dynamics in terms of how they operate with growers and suppliers around the world.

One changing dynamic is how rather than working with in-country importers or suppliers, it had become more common for retailers to work with growers directly at source, discussing costs, program volumes, auditing, and ethical and technical standards themselves.

"The key is our customers' needs are changing in the U.K., and we need to change with them," Mandelbaum said.

"We can't be afraid of the problems it brings up - we have to embrace the opportunities for more direct interaction and have them coming back for more."

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