Taking the pulse of retailers

Q & A

Deloitte’s Marty Weintraub on the issues likely to preoccupy retailers over the next 12 months

Is the fight for talent seen at all levels in grocery?

It is. It would manifest itself a little differently in grocery because a grocery store is not the most attractive career historically, let alone now, with what’s happened in the last two years with frontline workers and the fatigue and exhaustion they’ve had to navigate through. Even right up through to head office, we’re seeing that fight for talent. We’re talking about new and different skill sets—digital marketing, data science, analytics, even artificial intelligence. The old playbooks may not apply as much as they used to.

By Danny Kucharsky

ALMOST TWO years into the pandemic, Deloitte Canada surveyed more than 30 Canadian retail executives, including grocers, at companies reporting at least $300 million in annual global revenue. The result is the company’s recently released 2022 Canadian Retail Outlook. Marty Weintraub, national retail lead at Deloitte Canada, spoke to Canadian Grocer about its findings. The following has been edited for length and clarity.

What were the key insights from the report?

There were five key things. No. 1, there’s a fairly optimistic outlook on revenue growth going out a year or so. No. 2, supply chain complexities continue to present challenges. The third one is the war for talent. In food, that is disproportionately a challenge. The reason is that the average grocery store has 100-plus employees. That’s a lot of people to have to hire, retain, keep busy and happy. Obviously, ESG and climate (change) are hitting retail and executives are doubling down or tripling down on investments. Lastly, retailers must focus on their brand and what it stands for relative to what consumers are expecting these days.

What findings surprised you?

Fifty-four per cent of executives think revenue growth is going to be up to 5% (in 2022) and 32% think that growth is going to be 5% or more. I was a little surprised that over half of executives are feeling pretty good about growing up to 5%, because of the demand shocks we’ve seen in the last couple of years. There’s still a pretty kind of rosy outlook there. And we’ll see if that actually holds true as people start to resume pre-pandemic types of behaviour, like taking vacations or spending on experiences versus products and maybe going back to restaurants versus cooking so much at home. Things grocers may have benefited from in the last couple of years, we’re seeing slip away, so trying to hang on to as much of that as you can is pretty important.

What do retailers believe will happen with the supply chain in the coming months?

The concern level is still pretty high. Food is a little bit different because a lot of food is domestically purchased and moved as opposed to some of the challenges if you buy and import from overseas. From a food perspective, there’s a lot of substitution. The substitution effect is viewed a little bit differently than it was two years ago. If Brand A is not there, I’ll take Brand B or private label because it’s better than nothing. The consumer may not have been so patient or forgiving two years ago as they are now. There’s a lot more flexibility.

The report mentions retailers now have a chance to catch their breath and plan more strategically for the future. Can you elaborate on that?

Over the past couple of years, retailers were forced to deal with everything from opening stores, closing stores to capacity restraints and protocols. All the stuff they had to react to wasn’t in the playbook two years ago. We forget what the first three, four months were like—people having to wipe down their groceries or lining up to go to a store or putting shields up on the till. All these things that you had to do to stay open or stay alive, are, for the most part, behind us. We’ve figured out how to work in that environment, so now let’s get back to business. We were forced to invest in a bunch of things we weren’t planning on, so what I mean by taking a breath is a little bit of an opportunity to reset in terms of ‘What does the next couple of years look like?’ because consumers have shifted how they buy.

Where should grocers be focusing their efforts in the years to come?

Continuing the focus on profitability because there’s been no shortage of surprise costs hitting P&Ls, in the form of labour, technology and investments, so focusing on the bottom line of profitability is super important. CG

I T’S HOW YOU SAY COFFEE IN ITALIAN

NEW - Ground and Whole Bean, 300g