Retail and consumer goods (FMCG) sales in Europe will return to growth in 2021, after a year in which the industry was shaken by the impact of Covid-19, according to the report “Navigating the New Reality: Retail and Consumer ”, Made by PwC.
The growth rate will vary depending on each sector. For example, in the case of trade in non-food products, gross value added (GVA), ie the contribution of companies in the sector to the economy, will increase by 5.3% in 2021 and by 7.2% in 2022, taking into account the success of vaccination campaigns. across Europe, without the emergence of vaccine-resistant mutations or disruption of the supply chain, writes Mediafax.
As for the food industry, one of the industries least affected by this health crisis, growth will be lower, with an increase in GVA of 0.3% in 2021 and 0.8% in 2022, from a decrease of only 0.3% in 2020.
Overall, the analysis indicates a positive outlook for retailers in the near future. However, companies must remain cautious, given the rapid changes in consumer behavior during the pandemic.
One of the trends in the lockdown period, which will continue, is the orientation of consumers towards online commerce. Traditional retailers, which could not enter the online trade, were deeply affected. To adapt to these changes and to withstand the market, European retailers need to rethink and reconfigure organizations and business models with the same agility and dynamism they showed during the pandemic, says Ruxandra Târlescu, PwC Romania Partner, Lead Retail & Consumer.
The PwC report recommends attention to four key trends in the transformation process: digitization, sustainability and ESG, localization, and new ways of working.
The PwC Global Consumer Insights Survey in 2020 showed that 49% of European consumers have avoided shopping in physical stores since March 2020. And although retailers, including food and pharmaceutical retailers, have remained open during lockdown periods, 63% of Europeans bought more products online than before the pandemic. This trend will continue, given that almost all consumers who shopped online during the pandemic intend to continue this habit.
In addition to digitalization, another trend that has emerged in the pandemic has been the consumer’s orientation towards a healthy lifestyle and greater care for the environment. For example, about 45% of consumers worldwide say they actively avoid using plastic whenever possible. Many companies have already implemented sustainable circular economy initiatives and must continue this process.
Another trend is the result of growing awareness and concern among consumers about the impact of what they buy and especially where it comes from, with many turning to local products.
This has put pressure on retailers and FMCG companies to have better oversight of the supply chain for ethical and environmental reasons and to shorten the supply chain.
The interest in localization is the reverse of the normal reaction of consumers to economic crises, which is to pursue the lowest possible price above any other consideration. Cheaper sourcing and manufacturing of goods in low-cost countries has been a competitive advantage in this sector for many years, and companies have excelled in improving efficiency and scale throughout the supply chain. When factories and borders closed and transportation was disrupted during the first wave of the pandemic, the lack of resilience in this model was revealed.
As retailers seek to expand their online channels and automate more processes, they will have to manage more transformation projects. Such initiatives have always been complex in terms of content, people and documentation. Now, a remote configuration further increases the importance of efficient program management.
Remote work offers a significant opportunity to build interdisciplinary teams and collaborate more inclusively between regions. With clear ground rules for meetings, documenting results, and collaborating on real-time files, retailers can leverage the skills and knowledge of the entire company.
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