Wincanton’s MD of Grocery and Consumer James Hurrell explains how his team are limbering up to deliver success for the UK’s leading grocers and consumer goods manufacturers during this challenging season.
Limbering up to deliver success
For devoted football fans, every World Cup year is special. For retailers, World Cup 2022 is particularly exceptional.
What makes World Cup 2022 remarkable is that it is taking place during the winter months (21 November to 18 December) instead of the usual summer slot, to alleviate concerns about the heat in the host nation Qatar. This has an enormous impact for UK retail, particularly grocery and consumer goods manufacturers. A rare clash with the height of the Christmas sales peak and overlapping with Black Friday and Cyber Monday make this event highly unusual in the retail calendar. In fact, it’s the first time in the competition’s history we’ve had a winter world cup.
Previous world cups have seen grocery sales increase dramatically. When England reached the Euro finals in July 2021, this created an additional £2.3bn of food and drink sales in the UK according to The Grocer. However, this ‘elongated’ winter peak is highly unpredictable because it is almost impossible to use any algorithm to predict trading and plan logistics when you are comparing a sport in winter which has always taken place in the summer. While we know that sales of beer and crisps will increase, by how much and for how long will depend on the length of time the home team stays in the World Cup. There are also communities across the UK to consider, for example Polish, Croatian, Serbian, Cameroonian, Ghanaian communities who may shop differently as they cheer on their nation.
To paint the picture for you, if – and it is a big if! – England and Wales are in the knockout stages of the final, which would happen during the weekend before Christmas, this is a big supply chain demand alongside Christmas groceries. Shelf space and product promotion becomes more complex than usual. Win or lose, we know it is going to be a December like we have never seen before, as people enjoying the World Cup are also preparing for Christmas. They are moving from crisps and beer to roast dinners; Christmas treats and lots of chilled and temperature-controlled produce. However, this is likely to be tempered by consumers being more selective about their spend. Set against the backdrop of the cost-of-living crisis in the UK, which is expected to worsen as Winter is upon us, buying habits will look quite different. Consumers are making it clear they will be spending less this Christmas as pressure on households mount.
As UK food price inflation soars, it is no surprise that shoppers are looking to make savings. According to Retail Week*, 77% of consumers plan to cut back Christmas spending and 39% saying they plan to spend a lot less.
More reasons to cherish our colleagues
In 2020, due to the pandemic Wincanton delivered the equivalent of six Christmas peaks through the year. Normally , an event we spend at least four months planning for, we often successfully delivered for our customers at the drop of a hat based on the PM’s briefing the previous evening. Our teams learned that they were more agile than they ever thought they were and, frankly, that they were even more capable than they ever appreciated. While we know that the winter peak is going to be exceedingly difficult, we have never been better equipped and more resilient to deal with the unexpected.
When it comes to planning labour, we are likely to see a more pronounced spike and for longer which has implications for the recruiting and training of new staff, plus the challenge of speedily getting them up to the right levels of productivity. The labour market has never been so sensitive, triggered by post-Brexit and the elevated levels of employment. The consequence is that we have a greater and more complex demand at a time when supply of talent has never been shorter. Two years ago, supply of people outstripped demand – this Christmas it is the other way round. Colleagues have greater choices about where they work, particularly excellent colleagues. Not just in warehouses, but also professional functions, our people have never been more important. This means there is a greater need to be creative in our recruitment, retention and onboarding – and to become more colleague centred than ever.
Technology and innovation help us to manage this challenging peak. Wincanton’s W² Labs programme has created Recruiter, a digital tool which enables us to reduce the time it takes to hire new people, from up to four weeks to just 24 hours. This is a 96% reduction in time to hire, based on an online assessment score. This includes a complete digitisation of the recruitment process so colleagues can see for themselves the working environment. This way they can self-select out of the process if the role is not what they expect. We have also digitised the interview process, removing unconscious bias which has resulted in an increased diversity of colleagues, so we fairly represent the communities in which we work.
This Christmas we will cherish our colleagues more than ever and help them feel connected to the values of the organisation that they are working with, to ensure we retain brilliant people. This means the right approach to safety and support for wellbeing, and the right support for them especially at a time when those colleagues are likely to be affected by the cost-of-living crisis.
Preparing for resilience
This elongated peak is a golden opportunity for grocers and consumer goods manufacturers, but it is a big challenge for supply chains. Our recommendations would be for businesses to be proactive in preparing for the unexpected and, while in the short term this may result in increased costs, the lost opportunity costs of not being proactive are much higher.
Those businesses who have invested in ensuring resilience in their supply chain will be more able to thrive during this elongated peak, and their proactive forward planning will see them as the undefeated champions.
* Three-quarters of consumers to cut Christmas spending due to cost-of-living crisis | News | Retail Week