Speaking at last week’s Retail Week Conference the FMCG boss said: “Over the last 16 months we have taken about 40 per cent of costs out of the business. We have made it much leaner against conditions we find ourselves in.”
He warned that the impact of a weakened sterling is felt by suppliers as well as retailers and that small changes to currency values can crash suppliers’ profitability.
Lewis said suppliers and retailers need to address consumers’ “redefinition” of value, which has been brought on by falling confidence.
He gave the example of washing powder: people are not washing their clothes less, but are trading down in the brand of washing powder they buy. Unilever’s Surf powder, launched as a value product, is now its fastest growing brand. However, over the past 18 months market share for retailers’ own-label laundry products has stayed the same. He said shoppers want a trusted brand that they can be confident will work. “Brand equity is still very important,” said Lewis.
He called for businesses to keep innovating through the recession. “It is a fantastic way of getting people to re-evaluate value,” he said.
He added: “Consumers are much more critical in crunch times than in good times. They want products that deliver and beat expectations.”
Lewis advised: “It helps if you have a portfolio of propositions and price. You have to explore what real value is to your customer.”