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Europe & Middle East Outlook

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KRONAN

Putting the Green in Grocers 

Iceland’s leading discount supermarket has established itself as an exemplary industry figurehead, stocking its shelves with progressive products and grocery goodness   

Writer: Jonathan Dyble  |  Project Manager: Josh Hyland 

 

The retail sphere has been swept by the storm that is the growing commercial phenomenon of consumer consciousness in recent years.  

Be it the rise of veganism or the global war on single use plastics, consumers aided by social media have helped bring crucial health, social and environmental issues to the forefront of the minds of multinationals.  

L.E.K.’s latest Consumer Health Claims report provides the evidence. Having surveyed 1,600 people it found that buyers now want to know more than whether a product is low-calorie or high in fibre. Instead, consumers are advocating that products should convey specific attributes relative to not only health, but equally wellness, ethics and the environment.   

Resultantly, many businesses are having to adapt operationally and culturally in order to meet these changing demands. Yet others, such as Icelandic budget supermarket Krónan, are thriving in this increasingly mindful environment.  

“Much like other discount stores, we are competing on prices,” explains Gréta María Grétarsdóttir, the company’s CEO. “What truly sets us apart, however, is the emphasis we place on social responsibility and public health.  

“We have been at the forefront of decreasing food waste and at the same time have changed our store layout to focus on healthier products, replacing the candy and sweets that you’d typically find at cash registers with snacking fruit and strategically positioning water and diet drinks ahead of those with added sugars.   

“Consumers of the future will be much more demanding; we’re preparing to provide them with all the information and products they may require.”  

This uniquely progressive approach has enabled Krónan to excel in the two decades since its inception, now established as a major market challenger having played an important role in lowering grocery prices and raising social awareness in the national food retail sphere.  

Taking sustainable strides  

Being fundamentally a responsibility-driven company does come with its challenges, however, Grétarsdóttir herself citing Iceland’s relatively remote location as a consistent yet unavoidable hurdle.  

“We are very proud of the Icelandic products that we offer and know that the carbon footprint of each of our domestic goods is lower than that of those that we import,” she explains. “We have good relationships with local producers and partner with small and innovative businesses for this very reason.  

“At the same time, however, when you’re operating in a country with a population of about 360,000, it is not feasible or even possible to produce many of the products that we are used to seeing in grocery stores.”  

In order to overcome this, the company maintains similarly close relationships with a number of international vendors from both Europe and the United States, ensuring that its customers have a wide selection of products to choose from.  

Further, the company has developed a close understanding with its transport partners who take heed of Krónan’s responsible ethos, values and business model.  

“We ensure that the cargo ship containers we use arrange our imported produce in such a way that the fresh products are always unloaded first, in turn taking precedence when it comes to reaching the warehouse,” Grétarsdóttir states.  

Reduced food waste is one such outcome of this emphasis – a key area that the firm is seeking to address across the board, heavily reducing the price of damaged products or those past their best before date rather than simply discarding them.  

“Despite our best efforts, however, finding the right balance between food and packaging waste remains a challenge,” Grétarsdóttir adds.  

“There are packaging solutions that make food last longer and when it comes to importing these goods, the product’s lifetime matters. Therefore, the line between the two is not always clear, but it’s something that we’re working to address as part of our investment programme.”  

Maintaining momentum  

It is this latter point that is a major focus for the company at the moment.  

While the aforementioned efforts geared towards promoting healthy eating and reducing food waste constitute part of the firm’s spending strategy, it is also working extensively on incorporating game-changing technologies into its operations.  

Grétarsdóttir reveals: “We have started a journey to becoming a lot more data driven, implementing a product information management system and a new ERP system to support this vision.  

“We want our frontline people, who make the day-to-day decisions, to have meaningful data and the insights it can provide. It will provide them with the means of becoming more proactive, as well as ensuring that the right information is readily available to our customers.”  

Empowering its employees is a running theme across these investments at present, Krónan currently working to introduce effective mobile training and communications platforms, providing its staff with everything they might need in the palms of their hands.  

“We are grateful for our staff,” Grétarsdóttir adds. “We are fortunate that many of our store managers and key people have been with us for a long time, and we’re proud to be the first workplace of many young people, helping to kickstart careers.”  

From supporting its staff to meeting the evolving demands of its customers, Krónan’s progressive attitudes will continue to drive the business forwards for years to come.  

Having successfully bolstered its market share in recent years, the firm is now looking to expand its footprint and open new stores, the CEO considering each new outlet as a crucial milestone in achieving the wider goal of becoming a consolidated national supermarket of preference.  

“We want to be the first choice for customers that care about their health and the environment, while at the same time promoting shopping at fair prices,” Grétarsdóttir reveals.  

“Alongside expansion, we’ll continue to strive to service our customers better with the implementation of new technical solutions such as more self-service checkouts. Likewise, we’re tracking other trends such as the rise of online grocery shopping, although we’re not yet clear on how drastically this will change in store shopping in Iceland moving forward.  

“One thing that is for sure is that we have to adapt quickly to change. The only thing we know about the future is that it will not be as we think it will be.”