Three strategies retailers can learn from the UK’s most innovative grocers

Arguably the most competitive sector in retail, it’s little surprise that grocery often leads where others follow. 

The battle for share of wallets may be fierce, but operating within such a pressured sector has driven a break-neck speed approach to innovation and embracing technological transformation at rapid pace.  

As such, other sectors are able to observe which of the grocers’ strategies do and don’t work, enabling them to cherry-pick the solutions that may be transferable to their sectors and businesses, with proof of concept already shown.  

So, what trends are we seeing within the grocery sector right now that other retailers can learn from?  

Differentiate with partnerships

Partnerships have empowered grocers to expand their offering beyond their traditional remit, whether that’s by broadening their product range, offering elevated in-store experiences, expanding fulfilment options or delivering click-and-collect lockers to make customers’ lives easier. 

These tie-ups, in general, can be deployed without major organisational restructures or huge investments, increasing operational efficiencies and helping deliver improved CX for customers.  

Take Waitrose as an example. It expanded its partnership with Gail’s Bakery in May, adding a takeaway bakery concession to its Canary Wharf store, following the successful launch of Gail’s product ranges into 64 Waitrose stores a year prior.

The relationship is mutually beneficial: Waitrose shoppers can benefit from the new bakery, while Gail’s click and collect service operates from the site, bringing increased footfall for the grocer.  

Looking beyond food, Tesco’s own-brand F&F clothing range announced its in-store collaboration with fast-fashion retailer In The Style, in June.

The line was made available across more than 300 Tesco stores, both at superstores and in various Tesco Extra stores. Collaborations aren’t typically available in smaller format Tesco locations, making this partnership particularly interesting.  

In The Style founder Adam Frisby praised the collaboration for making “the brand accessible to everyone,” a long-term dream Frisby had for the retailer, which was bolstered through the cross-format rollout.  

While partnerships aren’t new to other retail sectors, there is certainly much to learn from the multitude of successful grocery collaborations, which are sparking excitement, attracting new audiences and creating a buzz both in-store and online.

Re-think store engagement  

In an era where online shopping is becoming increasingly personalised and convenient, it is crucial retailers attempt to make in-store experiences just as exciting.  

It has been a big year of store transformation for the grocers, who have been revamping the look and feel of stores, enhancing product offerings and upping loyalty perks, aiming to boost footfall, increase basket spend and drive repeat visits.

Understanding customer wants and needs at a local level is also imperative to success. Following customer feedback on Sainsbury’s Cobham store in Surrey, where shoppers told the grocer they wanted “more creativity and excitement while shopping”, the supermarket giant unveiled its ‘reimagined’ store format in June.

Homeware and fashion are “front and center” with a brand new fresh food and produce hall, revamped Argos, and new Costa Coffee and Greggs branches added at the adjoining petrol station.  

When considering investment, retailers must take into account all formats within their store portfolio, not just shoppers’ experiences in the large flagships.  

Whilst Marks & Spencer’s food division has focused on value for money, product quality and provenance, these characteristics have been most obvious in bigger stores. 

The retailer initially focused on better food halls in big stores as part of its shop renewal programme, spearheaded by chief executive Stuart Machin, but now its small format food stores in Central London are also having their moment. 

Take its store on Chancery Lane, reopened in August; key changes see the in-store bakery take pride of place at the front of the store, with new frozen and chilled drinks sections added, along with a flower shop.

As described by M&S food managing director Alex Freudmann, “There’s been such a change at M&S Chancery Lane; an old and tired store has been transformed. It now showcases the breadth and quality of M&S Food in ways it never could before.”

Sustainability as a must-have  

In 2024, grocers upped the ante in sustainability innovations.  

The re-vamped Sainsbury’s Cobham store, for example, features the grocer’s most energy-efficient refrigeration and heating systems to date. 

Just last month, Tesco struck a deal to buy enough solar power to run 144 of its large supermarkets, in a move that group chief executive Ken Murphy hailed as a “significant step” in the grocer’s plans to be carbon neutral by 2035. The £450m Cleve Hill Solar park is being built near Faversham by Quinbrook Infrastructure Partners and the site will provide Tesco with up to 10% of its total power demands over 15 years.

Retailers who innovate around sustainability are typically rewarded with positive consumer sentiment, but this hinges on effectively communicating their sustainability efforts to shoppers.  

Marks & Spencer brought its sustainability credentials to the fore as never before in its first full-line store opening of the financial year. Having opened at shopping centre Galleries Washington in Tyne & Wear in May, shoppers are taken on a sustainability journey as they navigate the 43,000 sq ft store.

Trolley bays and front-of-store vinyls carry information about the retailer’s ‘Plan A’ sustainability programme. In the food hall, the retailer flags initiatives such as its neighbourly community causes partnership. In clothing and home, signage highlighting the difference made through the reuse of hangers (a billon saved from landfill to date) features alongside donation bins for unwanted clothing and plastics. QR codes also feature throughout the store, enabling customers to find out more about the grocer’s sustainable approach.  

“It’s the first time we’ve talked to the customers in this way,” explains head of sustainability and technical specification Andy Krimat-Carr. “It’s almost a stepping stone about how does net zero affect them? And what are we doing about it?” he continues.  
 
The retailer says that the store will act as a “testbed for colleagues and customers” and may provide the blueprint for further new store openings.