Food Retailing - UK - November 2004

EXECUTIVE SUMMARY – UK
Food retailers take half of all retail sales
Tesco and ASDA are making all the running in the sector
Sainsbury’s still has much to do
Morrisons facing a daunting challenge
Internet shopping still tiny
Potential in the C-store sector
Demand slowing
 EUROPE
European market size of €972 million
Food retailers…
Non-food the driver
Price
But signs of change?
Demand turning down across Europe
A tough year in prospect
Consolidation levels
Bid speculation
A mixed performance for the future
Eastern Europe will continue to outpace the pack
PREMIER INSIGHT
EUROPEAN OUTLOOK
Morrisons Safeway deal
Other corporate activity
Strategic alliances
Ahold update
Company prospects in home markets
Figure 1: Europe: Leading food retailers’ market share trends in domestic market
Mixed outcomes on the international front
Pricing issues
Product and brand development
George stand-alones
More clothing
Auchan vs Carrefour
E-commerce
Figure 2: Europe: Leading retailers e-commerce activities, 2003/04
 FORECASTS
Figure 3: Europe: Food retailers’ sales forecasts and growth rates by country, 2003-08f
Future relative performance
Future absolute performance
REPORT SCOPE
Report structure and content
Food retailing sector
Store definitions
Buying groups, voluntary groups and co-operatives
BACKGROUND DATA – UNITED KINGDOM
Population
Figure 4: UK: Population trends, 1999-2003
Figure 5: UK: Population, by age group and sex, 2003
Figure 6: UK: Households, 2003
Figure 7: UK: Regions and major cities, 2002
Economy
Figure 8: UK: Gross domestic product, 1995-2003
Figure 9: UK: Consumer prices, 1997-2003
Figure 10: UK: Consumer expenditure, 1995-2003
Figure 11: UK: Detailed breakdown of consumer expenditure, 1999-2003
THE UK FOOD RETAIL SECTOR
 THE UK FOOD, DRINK AND TOBACCO MARKET
Market value and trends
Figure 12: UK: Consumer spending on food, drink and tobacco, 1999-2003
Figure 13: UK: Consumer spending on food, drink and tobacco as % all retail sales, 1999-2003
Figure 14: UK: Spending on food and drink, 1999-2003
Figure 15: UK: Growth in consumer spending on food, drink and tobacco, 1999-2003
Figure 16: UK: Key grocery non-food markets, 1999-2003
Figure 17: UK: Grocery non-foods spending as % all retail sales, 1999-2003
Product breakdown
Figure 18: UK: Average weekly household spending on food, 2001/02
Channels of distribution
Figure 19: UK food retailers: Estimated sales breakdown, 2003
Figure 20: UK: Inflation in food, drink and tobacco, 1999-2003
 FOOD RETAILERS
Sales values and trends
Figure 21: UK: Food retailers' sales, 1999-2003
Scale advantages
Consumer advantages
Figure 22: UK: Food retailers' sales as % all retail sales, 1999-2003
Figure 23: UK: Food retailers' sales, by type of retailer, 1999-2003
Home shopping
Enterprise and outlet data
Figure 24: UK: Food retail outlets, by sector, 1998-2002
Leading players
Figure 25: UK: Leading players, 2002/03
Market shares
Figure 26: UK: Top ten food retailers' market share, 2003
PROSPECTS AND FORECASTS
Prospects
Consolidation
Market leaders nervous?
Consumers still benefiting
No consumer revolt
Sainsbury’s
Morrisons – Safeway
Internationalisation
Forecasts
Figure 27: UK: Food retailing prospects, 2003-08
Figure 28: UK: Food retailers' sales as % all retail sales, 2003-08
EUROPEAN CONSUMER TRENDS
Key consumer findings
How often do they shop?
Figure 29: Frequency of major and other grocery shopping, day for major and other grocery shopping, distance travelled and transport used, 2004
Figure 30: Europe: Frequency of major shopping trips, by country, 2004
Where do they shop?
Figure 31: Type of shop used for major and other grocery shopping and level of spending, 2004
Consumer attitudes
Figure 32: Agreement with attitudes towards shopping and food in Germany, Spain, France and Great Britain, 2004
Consumer typologies
Figure 33: Consumer typologies, by country, 2004
UK CONSUMER TRENDS
How often do you shop?
Figure 34: Frequency of major and other grocery shopping, day for major and other grocery shopping, distance travelled and transport used, GB, 2002-04
Where do you shop?
Figure 35: Type of shop used for major and other grocery shopping and level of spending, GB, 2002-04
Consumer typologies
Figure 36: Consumer typologies in Great Britain, 2004
THE CONSUMER
Key consumer findings
Market penetration
Figure 37: Source of main grocery shopping, UK, 1996-2004
Figure 38: Stores used for main grocery shop, 1996 and 2004
Figure 39: Other stores used for grocery shopping (excluding stores used for main grocery shopping), UK, 1996-2004
The big four
Figure 40: Outlets visited for any grocery shopping in the last three months, by gender, age and socio-economic group, August 2004
ASDA, Sainsbury’s and Tesco
Figure 41: Shopping for groceries at ASDA, Sainsbury’s and Tesco, by age, August 2004
Figure 42: Shopping for groceries at ASDA, Sainsbury’s and Tesco, by socio-economic group, August 2004
Figure 43: Shopping for groceries at ASDA, Sainsbury’s and Tesco, by ACORN category, August 2004
Safeway and Morrisons
Figure 44: Shopping for groceries at Morrisons and Safeway, by age, August 2004
Figure 45: Shopping for groceries at Morrisons and Safeway, by socio-economic group, August 2004
Primary shoppers as share of all shoppers
Figure 46: Primary shoppers as % of all shoppers, 1996-2004
Secondary grocery retailers
Figure 47: Outlets visited for any grocery shopping in the last three months, by gender, age and socio-economic group, August 2004
Figure 48: Smaller grocery retailers – visitors and market share, 2003/04
CONSUMER ATTITUDES AND TYPOLOGIES
 KEY CONSUMER FINDINGS
 KEY TOPICS
Identifying targets
Figure 49: Consumer typologies for shopping at supermarkets, August 2004
Figure 50: Consumer typologies, by gender, age and socio-economic group, August 2004
Internet grocery shopping
Figure 51: Agreement with statements about grocery shopping on the Internet, August 2004
Figure 52: Agreement with statements about grocery shopping on the Internet, by gender, age and socio-economic group, August 2004
Figure 53: Agreement with statements about grocery shopping on the Internet, by regular source of grocery shopping, August 2004
Non-foods
Figure 54: Agreement with statements about non-food products in grocery stores, August 2004
Figure 55: Purchasing of non-food items from supermarkets, by gender, age and socio-economic group, August 2004
Price – perception is everything
Figure 56: Consumer perceptions of pricing compared with a year ago at supermarket where they do main grocery shopping, August 2004
Cross-shopping
Figure 57: Cross analysis of stores used for regular grocery shopping, August 2004
Figure 58: Cross analysis of stores used for regular grocery shopping, August 2004
Who buys what?
Figure 59: Food product ranges regularly purchased, August 2004
Figure 60: Food product ranges regularly purchased, by gender, age and socio-economic group, August 2004
Figure 61: Buyers of fresh and ready prepared foods, by age, August 2004
Figure 62: Buyers of healthy Eating ranges, by region, 2004
Figure 63: Own-brand buying patterns, by supermarkets regularly shopped, August 2004
Figure 64: Buyers of Hot-takeaway food, by supermarkets regularly shopped, August 2004
Figure 65: Buyers of chilled ready meals and hot takeaway food, by ACORN category, August 2004
Loyalty
Figure 66: Number of outlets visited, August 2004
Figure 67: Regular Shopping for groceries at major stores, by number of outlets visited, August 2004
UK ADVERTISING EXPENDITURE
Figure 68: Main media advertising expenditure by leading supermarkets and grocery chains, 1999-2003
Figure 69: Main media advertising by leading supermarkets and grocery chains, by media used, 2003
APPENDIX 1
Figure 70: Source of main grocery shopping, other shops used for grocery shopping and any grocery shopping in the last three months, August 2004
Figure 71: Primary shoppers as % all shoppers, 1996-2004
Figure 72: Outlets visited for any grocery shopping in the last three months, by gender, age and socio-economic group, August 2004
Figure 73: Outlets visited for any grocery shopping in the last three months, by lifestage and Mintel’s Special Groups, August 2004
Figure 74: Outlets visited for any grocery shopping in the last three months, by region and ACORN category, August 2004
Figure 75: Outlets visited for any grocery shopping in the last three months, by media and commercial TV viewing, August 2004
Figure 76: Outlets visited for any grocery shopping in the last three months, by gender, age and socio-economic group, August 2004
Figure 77: Outlets visited for any grocery shopping in the last three months, by lifestage and Mintel’s Special Groups, August 2004
Figure 78: Outlets visited for any grocery shopping in the last three months, by region and ACORN category, August 2004
Figure 79: Outlets visited for any grocery shopping in the last three months, by media and commercial TV viewing, August 2004
APPENDIX 2
Figure 80: Interest in shopping for groceries on the Internet, by gender, age and socio-economic group, August 2004
Figure 81: Interest in shopping for groceries on the Internet, by lifestage and Mintel’s Special Groups, August 2004
Figure 82: Interest in shopping for groceries on the Internet, by region and ACORN category, August 2004
Figure 83: Interest in shopping for groceries on the Internet, by media and commercial TV viewing, August 2004
Figure 84: Interest in shopping for groceries on the Internet, by outlets visited for groceries, August 2004
Figure 85: Consumer perceptions of pricing compared with a year ago at supermarket where you do main grocery shopping, August 2004
Figure 86: Food product ranges regularly purchased, by gender, age and socio-economic group, August 2004
Figure 87: Food product ranges regularly purchased, by lifestage and Mintel’s Special Groups, August 2004
Figure 88: Food product ranges regularly purchased, by region and ACORN category, August 2004
Figure 89: Food product ranges regularly purchased, by media and commercial TV viewing, August 2004
Figure 90: Food product ranges regularly purchased, by source of regular grocery shopping, August 2004
Figure 91: Purchasing of non-food items from supermarkets, by gender, age and socio-economic group, August 2004
Figure 92: Purchasing of non-food items from supermarkets, by lifestage and Mintel’s Special Groups, August 2004
Figure 93: Purchasing of non-food items from supermarkets, by region and ACORN category, August 2004
Figure 94: Purchasing of non-food items from supermarkets, by media and commercial TV viewing, August 2004
Figure 95: Purchasing of non-food items from supermarkets, by source of regular grocery shopping, August 2004
Figure 96: Cross analysis of stores used for regular grocery shopping, August 2004
Figure 97: Cross analysis of stores used for regular grocery shopping, August 2004
Figure 98: Consumer typologies, by gender, age and socio-economic group, August 2004
Figure 99: Consumer typologies, by lifestage, working status and Mintel’s Special Groups, August 2004
Figure 100: Consumer typologies, TV region, commercial TV viewing and media usage, August 2004
Figure 101: Consumer typologies, by stores used for grocery shopping, August 2004
Figure 102: Purchasing of luxury and budget own brands, by Internet usage for groceries, August 2004
Figure 103: Purchasing of luxury and budget own brands, by gender, age and socio-economic group, August 2004
Figure 104: Purchasing of luxury and budget own brands, by lifestage, working status and Mintel’s Special Groups, August 2004
Figure 105: Purchasing of luxury and budget own brands, by TV region, commercial TV viewing and media used, August 2004
Figure 106: Consumer typologies, by shopper loyalty, August 2004
Figure 107: Purchasing of luxury and budget own brands, by shopper loyalty, August 2004
COMPANY PROFILE: ALDI GRUPPE
Market shares
Figure 108: Aldi: Share of all German food retailers’ sales, 1999-2003
Figure 109: Aldi: Share of all European food retailers’ sales, 1999-2003
Background
Foundation
Two companies formed
International expansion
Next steps
Financial data
Figure 110: Aldi Gruppe: Estimated European sales data, 1999-2003
Figure 111: Aldi gruppe: Estimated European sales breakdown, 2003
Outlets
Figure 112: Aldi Gruppe: European outlet data, 2001-03
Non-European activities
Products
Inhouse brands
Local knowledge
E-commerce
SWOT
COMPANY PROFILE: WM MORRISON
Market shares
Figure 113: Morrisons: Sales as share of all UK food retailers' sales, 1999-2003
Figure 114: Safeway: Sales as share of all UK food retailers' sales, 1999-2003
Background
History
Surprise bid for Safeway
The deal
Integration
Regulatory and other store disposals
Financial data
Morrisons
Figure 115: Wm Morrison: Financial performance, 1999/2000-2003/04
Safeway
Figure 116: Safeway: Financial performance, 1998/99-2002/03
Figure 117: Safeway-BP Joint Venture: Financial performance, 1998/99-2002/03
Group interim results 2004/05
Figure 118: Wm Morrison: Interim financial performance, 2003/04 and 2004/05
Outlets
Morrisons
Figure 119: Morrisons: Outlet data, 1999/2000-2003/04
Safeway
Figure 120: Safeway: Store portfolio by store size, 2002/03
Figure 121: Safeway-BP Joint Venture: Outlet data, 1998/99-2002/03
Group store portfolio at October 2004
Figure 122: Wm Morrison: Outlet data, October 2004
Store development plans…
…and disposals
Products
E-commerce
SWOT
COMPANY PROFILE: J SAINSBURY
Market shares
Figure 123: Sainsbury’s supermarkets: Share of all UK food retailers' sales, 1999-2003
Background
History
Diversification
Halcyon days over
Business transformation programme fails and profits due to slump
Refocus on UK
Management changes
2004 business review
Financial data
Group
Figure 124: J Sainsbury: Group financial performance, 1999/2000-2003/04
Sainsbury’s Supermarkets
Figure 125: Sainsbury’s supermarkets, 1999/2000-2003/04
Figure 126: Sainsbury’s supermarkets: Sales growth, 1999/2000-2003/04
First half results 2004/05
Outlets
Figure 127: Sainsbury’s supermarkets: Outlet data, 1999/2000-2003/04
Convenience stores
2004/05
Products
Food
Figure 128: Sainsbury’s supermarkets: Own label food portfolio, March 2004
Non-foods
E-commerce
Nectar card
Financial services
SWOT
COMPANY PROFILE: SCHWARZ
Market share
Figure 129: Schwarz: Share of all German food retailers’ sales, 1999-2003
Figure 130: Schwarz: Share of all European food retailers’ sales, 1999-2003
Background
Lidl
Kaufland
Financial data
Figure 131: Schwarz: European food sales data, 1999/2000-2003/04 (est)
Outlets
Lidl
Kaufland
Figure 132: Schwarz: European outlet data, 1999/2000-2003/04 (est)
Products
Lidl
Kaufland
E-commerce
SWOT
COMPANY PROFILE: SPAR INTERNATIONAL
Figure 133: SPAR (Europe): Sales as share of all European food retailers sales, 2000-03
Background
Financial data
Figure 134: Spar international: Sales, 2000-03
Figure 135: SPAR International: Sales, 2000-03
Outlets
Figure 136: SPAR International: Outlet data, 2001-03
Products
E-commerce
SWOT
COMPANY PROFILE: TESCO
Market shares
Figure 137: Tesco (UK): Sales as share of all UK food retailers' sales, 1999-2003
Figure 138: Tesco: Share of all European food retailers' sales, 1999-2003
Background
History
UK portfolio – range of formats
Retailing services
Loyalty card
International activity
Figure 139: Tesco: International expansion, 1994-2004
Financial data
Figure 140: Tesco: Group financial performance, 1999/2000-2003/04
UK
Figure 141: Tesco UK: Annual increases in financial measures and space, 1999/2000-2003/04
Rest of Europe
Figure 142: Tesco: Like-for-like sales growth, by European country, 2000/01-2003/04
Other
Interim results 2004/05
Outlets
Figure 143: Tesco: Outlet data, 1999/2000-2003/04
UK
Figure 144: Tesco: UK store numbers by format type, 2001-05
Figure 145: Tesco: UK store portfolio, by size, 2001/02 and 2003/04
Ireland
Eastern Europe
Figure 146: Tesco: Eastern Europe store numbers, 2002-04f
Far East
Products
Food
Non-foods
Logistics
E-commerce
SWOT
COMPANY PROFILE: WAL-MART (EUROPE)
Market share
Figure 147: ASDA: Share of UK food retailers’ sales, 1999-2003
Figure 148: Wal-Mart Germany: Share of German food retailers sales, 1999-2003e
Figure 149: Wal-Mart Europe: Share of European food retailers, 1999-2003e
Background
History
Cross-border moves
Europe
Financial data
Group performance
Figure 150: Wal-Mart Inc: Group financial performance, 1999/2000-2003/04
Figure 151: Wal-Mart Europe: Financial performance, 1999/2000-2003/04
Figure 152: ASDA: Financial performance in pound sterling, 1999-2003
Outlets
Figure 153: Wal-Mart Europe: Outlet data, 1999/2000-2003/04
Products
E-commerce
SWOT
MINI COMPANY PROFILES
Iceland
Background
Figure 154: Iceland: Share of all food retailers sales, 1998/99-2003/04
Financial data
Figure 155: Iceland: Financial performance, 1999-2003/04
Outlets
Figure 156: Iceland: Outlet data, 1998/99-2003/04
Marks & Spencer
Background
Figure 157: M&S UK: Sales by product category, 2003/04
Figure 158: M&S: Food sales as % all food retailers sales, 1996/97-2003/04
Corporate
Food
Financial data
Figure 159: Marks & Spencer (Foods): Financial performance, 1999/00-2003/04
Outlets
Figure 160: Marks & Spencer: Outlet data, 1999/2000-2002/03
Musgrave
Background
Figure 161: Musgrave Ireland: SuperValu, Centra share of all Irish food retailers sales, 1999/2000-2003/04
Figure 162: Londis: Sales as % all UK food retailers sales, 1999-2003
Financial data
Figure 163: Musgrave: Group financial performance, 1999-2002
Figure 164: Musgrave: Super Valu, Centra sales, 2000-03
Outlets
Figure 165: Musgrave: Outlet numbers, 2001-03
Figure 166: Musgrave Ireland: Outlet data, 2000-03
Somerfield
Background
Figure 167: Somerfield: Sales as % all UK food retailers sales, 1999/2000-2003/04
Somerfield
Kwik Save
Group
Financial data
Figure 168: Somerfield: Financial performance, 1999/2000-2003/04
Outlets
Figure 169: Somerfield: Outlet data, 1998/99-2002/03
Waitrose
Background
Figure 170: Waitrose: Sales as % all UK food retailers sales, 1999/2000-2003/04
Home Shopping
Food and Home
Financial data
Figure 171: Waitrose: Financial performance, 1999/2000-2003/04
Outlets
Figure 172: Waitrose: Outlet data, 1999/2000-2003/04