Grocery Guru Episode 2: Category Management is Dead

Is Category Management Dead? In episode 2 of Grocery Guru, Andrew Grant and Darren A. Smith talk about how the pandemic has affected Category Management. Is it completely dead, dying, or changing into something else to adapt to the needs and demands of consumers? The age-old question. If Category Management is about meeting the shopper’s demands better and quicker than the next guy, then it’s a ‘No’.

You Can Read the Full Category Management is Dead Episode Transcript Below:

Darren A. Smith:

This is Week Two and we're here with the Grocery Guru that is Andrew Grant. Hello? How are you doing?

Andrew Grant:

I'm good Darren, how are you?

Darren A. Smith:

Hey, I'm good, I'm good. This is Week Two of our Grocery Guru and last week, we were talking about UFC, which I thought was Ultimate Fighting Champion, but you corrected me and said it's urban for Urban Fulfillment Centers.

Andrew Grant:

Right. Second time. Yeah.

Darren A. Smith:

I remember, so would you just give us 30 seconds on UFC? What was that all about?

Andrew Grant:

Right. Well, if I can remember a week ago, right. The future really of retailing and what we're going to talk about today, I think carries on from there. But basically, grocery home shopping has grown faster since March than in the previous 10 years. Because clearly so many people at home, people not wanting to go and wander around a Superstore because of the physical distance rules. They've all ordered home shopping.

Andrew Grant:

Category Management is dead

 

Home shopping is now, I hope I've got my numbers right, can be up to 30% of the supermarkets turnover. And it's only going one way. As a result, we're having to find ways to pick stuff more efficiently. And the likes of, I think I said last week, Cardo has spent gazillions on massive, great automated factories. People like Tesco, and Sainsbury's use people in-store to pick the stuff, and if you've got 50% of your business you're going to have more people picking than you have customers.

Andrew Grant:

What they've very cleverly done and we talked about the good old days where stores had stock rooms. They're taking the biggest out of town stores, which we all know are slightly white elephants now, and turning half of them over to picking spaces for home delivery.

Darren A. Smith:

Okay.

Andrew Grant:

These are now called dark stores or Urban Fulfillment Centers. Tesco, I think I've got 17 planned in the next year.

Darren A. Smith:

I remember you telling me about the winners and the losers. We're looking at Albi and Lidl possibly losing and Tesco, probably winning and Asda. Is that right?

Andrew Grant:

A big opportunity for Asda because they've got the biggest stores in the out of town locations, new owners who are convenience experts, not necessarily Superstore experts. Yeah, you could see those massive Asda stores, half of them going dark and becoming a picking centre.

Darren A. Smith:

Right. Okay. Okay. And then you left us with a cliffhanger last time, very good film, very old, maybe for another time, Sly Stallone. And you talked about category management is dead. Now I've heard that term before and it's quite a provocative... category management is dead. What did you mean by it?

Andrew Grant:

Yeah, I think it's demise has been well-publicized probably for the last 15 years. I think when shopper loyalty data first came in they said category management was dead. But I think finally it is. And this move to home shopping and these Urban Fulfillment Centers that will be the nail in the coffin of traditional category management.

Andrew Grant:

If you are a traditional grocery supplier selling tins and packets that are relatively undifferentiated. Because if half of the business is picked dark-

Darren A. Smith:

Yep.

Andrew Grant:

... then all your cans, all your packets of cereals all your tins of stuff will be in the dark side of the store.