Grocery Guru Ep 18: Discussing the New Normal and Impending Supermarket War

Join Andrew Grant and Darren A. Smith in the eighteenth episode of Grocery Guru. Today, the discussion focusses on the new normal and preparing for a fierce supermarket war. Forecasting budgets will be very hard, and the only certainty is uncertainty.

You Can Read the Full Supermarket War Transcript Below:

Darren A. Smith:

Welcome to episode 18 of Grocery Guru. And we're here with that guru, Andrew Grant. How are you?

Andrew Grant:

Morning, Darren. You well?

Darren A. Smith:

I'm good, I'm good. I saw Boris' announcement like most of the UK on Monday night. And the new normal... I'm confused. Andrew, what's going on? What's going to happen?

Andrew Grant:

Well, if I knew that I don't think I'd be here. I'd be putting some bets on the stock market. Yeah, it's all a bit weird, isn't it? It's like being handcuffed and you see the key at the other end of the room. It's like one of those Jeopardy movies.

Darren A. Smith:

Very nice. Very good.

Andrew Grant:

Or the Escape Room, or whatever it's called, where you can see how to get out, but you're not allowed out. It's a little bit weird.

The New Normal and Impending Supermarket War

 

Darren A. Smith:

I hear lots of contradictions around. This guy says this and this other person says that. And it's like...

Andrew Grant:

Yeah, when you look at the game we're in, it is a bit strange. On the one hand, you've got the head of Network Rail saying, "We're going to put 10% fewer trains on, because we're expecting 80% of normal capacity."

Darren A. Smith:

Right.

Andrew Grant:

Then you've got the head of Goldman Sachs saying, "Nah, everybody's going straight back to work the minute we can."

Darren A. Smith:

Right.

Andrew Grant:

So, that's a bit contradictory.

Darren A. Smith:

Yeah, yeah.

Andrew Grant:

And then you've got another thing saying footfall in shops will go up 50% post lockdown.

Darren A. Smith:

Plus 50%?

Andrew Grant:

Yeah.

Darren A. Smith:

Wow.

Andrew Grant:

And everybody talking about this massive spending spree. £250 billion pent up savings. So, it sounds like people are just going to go mental, which I imagine they will.

Darren A. Smith:

Wow. Because we've got the four-step plan coming over the next few months. Everyone knows that. So, we're going to talk about that. So, when's this £250 billion going to start being spent? Are we thinking during March or they're going to wait for a few steps?

Andrew Grant:

Well, I forget the exact dates. When non-essential retail opens. So, when all the clothing shops and the department stores and what have you open up, that'll be a big trend in spending. But obviously, the big one will be when pubs and restaurants will start serving again in... Is that May I think?

Darren A. Smith:

17th of May I think.

Andrew Grant:

Yeah.

Darren A. Smith:

That's five days after my 50th birthday, so you won't be able to pick me up.

Andrew Grant:

Okay, okay. There's the push for a card I could see. No, but what I found fascinating, coming back to our game and supermarkets and what have you, is they have been one of the clear winners of this pandemic because they're about the only place you can go.

Andrew Grant:

And I was looking at the Kantar data for January, which is obviously a slow month in normal retail land, but the grocers were up 12% year on year. Now there's bugger all inflation so that 12% is all growth. And of course, you imagine most of it's come from pubs, restaurants, and hotels.

Andrew Grant:

So, in 12 weeks, that's worth about a £3.6 billion bonus to the supermarkets, which is £16 billion a year. Round, round numbers. Now obviously, if that all suddenly goes back to what we call out of home, then they'll be in zero growth territory after a year where they've spent a fortune on being COVID prepared and dealing with the massive growth of online deliveries.

Andrew Grant:

I wonder what they budgeted for this year,