>>The industry needs leading away from the age of cheap
At a gathering of future leaders in Prague this week, the message to the industry was stark. It is to blame for creating a situation where consumers no longer care about brands but increasingly view everything as a commodity. And the only thing that matters then is price.
Moreover, if you think this is a cycle from which you can emerge, then think again. Leading global experts attending the event agreed on one thing: consumers will increasingly look for the lowest price. As Dr Kjell Nordström from Stockholm’s Institute of International Business said: “The age of cheap is here to stay.”
So it was no surprise to return to these shores to discover that the annual Christmas ‘yah-booing’ between alcohol suppliers and retailers had already begun, albeit earlier than usual (see p4).
Both sides agree value needs to be put back into the category, especially at this one time of the year when consumers would not be without alcohol. But neither can afford to take this brave step unilaterally. So the canny consumer wins again - expect a rush the week before Christmas when prices fall even further.
The consumer wins again. This phrase is guaranteed to gain brownie points with a government keen on finding any reason to hinder growth in this industry. But the problem is, the consumer is ultimately the only one to win. Retailers and suppliers need to win as well if they are to continue generating growth in the economy and offering choice. Bringing value back is not only desired, it is required. To compete merely on price is a losing game. There is always someone who will go lower.
In this changing climate the middle ground is dangerous - and far too many people in this industry are in it. No prizes, then, for guessing which three UK names popped up time and again during the CIES conference. Yes, you’ve got it: Sainsbury, M& S and Boots.
If you can’t compete on price, the only survival tactic is to inspire and convince smart shoppers that you are offering something unique. To do this you must experiment and experimenting means you need to be prepared to fail, which is difficult when you are scrutinised daily by the City and media.
It takes a brave person to stick his or her head out in such a risk-adverse environment.
Now that’s what I call a leader.
on the road to nowhere
At a gathering of future leaders in Prague this week, the message to the industry was stark. It is to blame for creating a situation where consumers no longer care about brands but increasingly view everything as a commodity. And the only thing that matters then is price.
Moreover, if you think this is a cycle from which you can emerge, then think again. Leading global experts attending the event agreed on one thing: consumers will increasingly look for the lowest price. As Dr Kjell Nordström from Stockholm’s Institute of International Business said: “The age of cheap is here to stay.”
So it was no surprise to return to these shores to discover that the annual Christmas ‘yah-booing’ between alcohol suppliers and retailers had already begun, albeit earlier than usual (see p4).
Both sides agree value needs to be put back into the category, especially at this one time of the year when consumers would not be without alcohol. But neither can afford to take this brave step unilaterally. So the canny consumer wins again - expect a rush the week before Christmas when prices fall even further.
The consumer wins again. This phrase is guaranteed to gain brownie points with a government keen on finding any reason to hinder growth in this industry. But the problem is, the consumer is ultimately the only one to win. Retailers and suppliers need to win as well if they are to continue generating growth in the economy and offering choice. Bringing value back is not only desired, it is required. To compete merely on price is a losing game. There is always someone who will go lower.
In this changing climate the middle ground is dangerous - and far too many people in this industry are in it. No prizes, then, for guessing which three UK names popped up time and again during the CIES conference. Yes, you’ve got it: Sainsbury, M& S and Boots.
If you can’t compete on price, the only survival tactic is to inspire and convince smart shoppers that you are offering something unique. To do this you must experiment and experimenting means you need to be prepared to fail, which is difficult when you are scrutinised daily by the City and media.
It takes a brave person to stick his or her head out in such a risk-adverse environment.
Now that’s what I call a leader.
on the road to nowhere
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