Retailers must adapt or liable to collapse

Written on the 12th of December 2008 by Daniel Palmer

Retailers must adapt or liable to collapse: Leading UK supermarket boss

Andy Bond, President and CEO of UK-based supermarket Asda, has predicted that the recession will fundamentally change consumer behaviour and that retailers who fail to adapt to the new reality won’t survive.Speaking in London at a seminar organised by Asda and Cebr to discuss the impact of the recession on consumer spending he said that consumers had begun to alter their purchasing habits and believes they are unlikely to return to frivolous spending in the future.

“We can already see how changing attitudes are affecting customers’ shopping habits,” Mr Bond advised. “Consumers are not prepared to pay a premium when they cannot taste the difference. The era of conspicuous consumption is over.”

“Saving money by cutting out waste of all kinds will be the priority,” he noted. “I don’t see this as being a short-term response to the recession but a fundamental shift that will see the emergence of a new breed of customer.”

The new shopper will be more demanding than ever before, according to Mr Bond. “The new emerging consumer will demand more value for money than ever before and genuine price transparency,” he said. “Retailers will have to respond by adapting their business models if they are to survive. Retailers with authentic low cost operating models, who embrace sustainability as a means of reducing costs and who are transparent about how they pass savings on to their customers will be the winners. Those who continue with high/low pricing will become increasingly distrusted.”