Strategic responses of post-pandemic FMCG outlets in Malta : navigating the service quality-price trade off

Abstract

This study has the aim of investigating the retail aspect of the FMCG industry in Malta, with a particular focus onto the evolutions that the Covid-19 pandemic brought into effect and the aftermath changes in the industry. The success of these changes was analysed through several interviews conducted by the author with established local retail owners and their customers. Examining the Service Quality-Price Trade-Off aimed to establish a connection with the factors that influenced customers during their FMCG choices. The Fast-Moving Consumer Goods (FMCG) was valued at $11,738 Billion in 2023 industry globally with a compound annual growth rate of 6.6% and is a dynamic force that has evolved significantly over the ages. FMCG, often referred to as consumer-packaged goods, encompasses products with rapid turnover and relatively low costs. These items, ranging from daily essentials to household staples, play a pivotal role in the daily lives of consumers. The historical roots of the FMCG industry trace back to the late 1800s, marked by the advent of mass production techniques (Kanger, & Sillak, 2020). This transformative period saw the swift and economical creation of goods such as soap, canned food, and household items. The 20th century witnessed continued evolution, embracing innovations like refrigeration and the ascent of supermarkets (Howard, 2015). A pivotal juncture in FMCG history emerged in the mid-1900s with the rise of supermarkets and hypermarkets (Klaņe, 2003). These expansive retail havens democratized access to a diverse array of products, rendering FMCG items more affordable and widespread. As the population became more independent financially, coupled with advances in transportation and an overall improvement in well-being, the FMCG industry experienced accelerated growth, particularly in the case of supermarkets (Diener, & Seligman, 2004). This shift intensified competition among FMCG companies, prompting a surge in product innovation, branding, and marketing (Thain, & Bradley, 2014). In our contemporary landscape, the FMCG industry stands as a global powerhouse, with its influence extending to virtually every corner of the world. Major players such as Nestle, Procter & Gamble, Unilever, PepsiCo, and Coca-Cola wield significant impact, boasting strong brand recognition and a global footprint. Exploring Malta's distinctive FMCG landscape entails acknowledging the challenges and opportunities that have sculpted it, especially following the global Covid-19 pandemic. The industry's evolution reflects not only global trends but also the resilience and adaptability required to navigate the intricate dynamics of a small yet competitive market. In the post-pandemic era, FMCG retailers face unprecedented challenges, including supply chain disruptions, shifting consumer preferences, and economic uncertainties (Grima, Dalli Gonzi, & Thalassinos, 2020). However, amidst these challenges lie opportunities for innovation, adaptation, and sustainable growth. This study aims to delve into these dynamics, shedding light on the strategic responses of FMCG outlets, the factors influencing consumer behaviour, and the implications for the future of Malta's FMCG industry.