Tesco, one of the leading supermarket chains in the UK, recently made the decision to close its fresh fish counters at stores nationwide. This move has had a significant impact not only on Tesco's operations but also on the processing sector. Let's delve deeper into the reasons behind these closures and the implications for the industry.
The Closure of Tesco's Fresh Fish Counters
In February last year, Tesco announced its plan to close 317 fresh fish counters across the country. Earlier this year, the supermarket confirmed that the remaining 279 counters would permanently shut down on 26th February. This decision has led to the closure of several traditional smokehouses, including the Grimsby-based Hilton Food Group.
The Grimsby smokehouse, which employed nine staff members, catered to the high-end quality market. However, due to the Tesco closure, the smokehouse had to cease its operations. The company now focuses on producing larger volumes of pre-packed fish products in its two larger processing units in Grimsby.
The Shift Towards Pre-Packed Fish Products
The closure of Tesco's fresh fish counters is part of a broader trend in the supermarket industry towards pre-packed fish products. This shift has adversely affected traditional products and operators that were more suited to wet fish counters. Supermarket insiders have revealed that, apart from popular fish varieties such as salmon, prawns, cod, haddock, and tuna, very few items on the counters were profitable.
Over the past 20 years, counter sales have seen a decline, and the closure of fish counters due to COVID-19 has played a minor role in this trend. In fact, even a decade ago, only around 7% of seafood was sold through retailer counters, with the remaining 93% being sold pre-packed. By June 2022, this figure had risen to 97% and remained unchanged in January 202
One of the main reasons behind this decline is the changing shopping habits of consumers. Shoppers now prefer to spend less time in stores and seek convenience. Additionally, some customers find it intimidating to interact with a fishmonger. As a result, retailers have found it more profitable to offer pre-packed fish products that cater to these preferences.
The Impact on the Industry and Adaptation Strategies
The closure of Tesco's fresh fish counters has had a significant impact on the fishing and processing sectors, particularly in Scotland. Organizations such as Seafood Scotland are actively exploring ways to adapt and thrive in this changing landscape.
Donna Fordyce, CEO of Seafood Scotland, expressed disappointment over the closure of Tesco's fish counters. She highlighted the challenges faced by the fish category, including the perception that fish is expensive. Seafood Scotland is collaborating with The Knowledge Bank, a specialist food and drink research organization, to gain insights into consumer purchasing decisions regarding seafood.
Fordyce mentioned how French retailers, such as Grand Frais, are tackling these challenges by driving sales of chilled seafood while providing value. These retailers offer curated ranges of fish without bones and a section for pre-prepared fish with marinades or sauces. Such offerings cater to consumers' convenience and lack of knowledge and skills in preparing and cooking fish.
Despite price increases, seafood in sauce has shown more resilience compared to other sectors, thanks to the conservative nature of UK consumers. The industry's challenge lies in continuing to innovate, adding value, attracting new consumers, and communicating the sustainability credentials of Scottish seafood.
The closure of Tesco's fresh fish counters and the shift towards pre-packed fish products have had a significant impact on the industry. While this trend reflects changing consumer preferences and the need for convenience, it also presents challenges and opportunities for the fishing and processing sectors. Adapting to these changes, innovating, and communicating the value and sustainability of seafood will be crucial for the industry's success in the future.
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