Introduction: Running Harder to Stand Still?
If you're leading a mid-sized food or retail business and it feels like you're running flat out just to stay in the same spot, you're not imagining it and you’re not alone.
Margins are being squeezed. Costs are rising. Customer loyalty is dropping. Competitive intensity is increasing. And what used to work to drive growth no longer cuts it. To win you need to be at the top of your game, otherwise your competitors will beat you to the punch
We work with businesses just like yours every day. The pattern is clear: what’s driving the squeeze is a complex web of channel chaos, bloated product portfolios, shrinking shelf space in retail and a tough path to retention. But there is a path forward and it’s not just about cutting costs or adding more marketing spend.
Let’s unpack what’s really going on.
More Channels, More Complexity and Less Margin
Omnichannel is no longer optional it’s expected. Customers want to find you everywhere: in-store, online, through marketplaces, delivery platforms, and niche distributors.
But here’s the problem, every new channel adds operational complexity. More systems. More partners. More inconsistent data. More price competitiveness. And often smaller margins.
A McKinsey report found that omnichannel customers spend 4% more in-store and 10% more online than single-channel ones.
The future of retail: The customer will be king
You need to be ensuring your brand talks to them (a compelling narrative) & is visible (ranged where they shop) But for many mid-market brands, the cost of servicing all those channels and keeping pace, is outweighing the benefit.
What to watch for:
- Channel-specific promotions that erode margin
- Distributors demanding volume without committing to sell-through
- Internal teams overwhelmed by channel management tasks (& yes managing your brand & category everyday is critical!)
Product Range Bloat: When “More” Means Less
More SKUs, more sales? Not always.
We’re seeing brands with dozens, even hundreds of SKUs, where only a fraction actually contribute meaningful profit. A bloated product mix can:
- Confuse customers
- Inflate production and logistics costs
- Stall profitability
- Create unnecessary complexity
Research from the Harvard Business Review reveals that simplifying product portfolios can lift margins by 10-15% in some industries. https://www.mckinsey.com/capabilities/operations/our-insights/finding-the-sweet-spot-in-product-portfolio-management
What to look for
- SKUs with high returns or low sales velocity
- Promotions driving volume, but tanking profit
- Product lines that work in one channel, but not others
Loyalty is the New Acquisition Strategy
Customer loyalty has fallen off a cliff. Bain & Company reports that repeat customers can generate over 40% more revenue than new ones, yet retention is declining across food and retail sectors.
The old model of offering discounts to attract customers and hope they return isn’t working. It’s bringing in deal-hoppers, not loyalists.
- Instead, we need smarter, simpler ways to:
- Capture and use customer data (even without big tech investments)
- Personalise the post-purchase experience
- Measure and improve second-purchase rates
So, What’s the Fix?
Mid-sized brands don’t need to act big; they need to act smart. Here's where to focus your next 90 days:
- Rationalise range and channels - Focus on what drives margin, not just volume
- Build a scalable Go To Market Strategy - That’s sustainable across teams and systems
- Leverage lean tech - Automate what you can, but don’t over-engineer
Want to map your own 90-day plan? Book a strategy session and we’ll help you identify your fastest path to profitable growth.
Final Thought
Being mid-sized isn’t a disadvantage. It’s your superpower if you can stay agile, strategic, and focused. But the big guys will be out to protect their patch.
This squeeze? It’s survivable. Even winnable. But it requires a mindset shift: from more, faster, louder to smarter, simpler, sharper.
