Only businesses that can respond quickly and innovatively to the challenges posed by the deepening economic crisis will emerge unscathed. This was the stark message from top industry names at this year’s IGD convention. Businesses were going to have a rough ride over the next two years, delegates at the World Turned Upside Down-themed conference were warned.

It was more important than ever to react to changing consumer needs during the downturn, said P&G UK vice president and MD Irwin Lee. "I try to go into as many consumer websites and forums as I can, and what I’m hearing is that they want us to continue product innovation as much as we can,” he said, adding that “tremendous cost pressure” could be the catalyst for innovation.

“Suppliers and retailers can get creative,” he said. “And when we collaborate together, we can make a big difference. If we see only the danger in the situation facing the industry today, we will retreat into relationships driven by cost and margin, assuming consumers are only motivated by price. Instead, let’s embrace innovation and the opportunities it brings.”

The message of change driving success was reinforced by Tesco and Sainsbury’s. “The economic events have taught us the importance of innovation.” Lucy Neville-Rolfe, Tesco executive director of corporate and legal affairs, said.

Sainsbury’s chief executive Justin King added that it was essential to be fleet of foot when the outlook was changing daily. “We call ourselves the fmcg industry, and we’re going to have to focus on the fast.”

There was “no time to pause for breath”, IGD chief executive Joanne Denney-Finch said. “Eventually the economy will recover but life will not go back to normal, and shoppers will have learned new habits.”

Just one in 200 consumers changing their shopping habits could effect a 5% change in profitability, added Hobart analyst David McCarthy.