Author: Mintel Group Ltd.
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Food Retailing - UK - November 2007

ISSUES IN THE MARKET
Main themes
 ABBREVIATIONS
INSIGHTS AND OPPORTUNITIES
Think local, ditch global…?
Supermarkets unwrapped
Tesco-land and the single supermarket
MARKET IN BRIEF
The future
Spending on food
Consumer – Green and ethical issues
Shopping patterns – Convenience is king
Leading retailers
FAST FORWARD TRENDS
Trend 1: Trust in me
Definition
What next?
Trend 2: Green
Definition
What next?
Trend 3: Non-standard society
Definition
What next?
INTERNAL MARKET ENVIRONMENT
Discounting
Figure 1: UK: Consumer Price Index: All goods and food, 1996-2006
Figure 2: UK: Consumer Price Index: All goods, food and beverages, January 2006-September 2007
The health trend
Premiumisation
The competitive landscape
Local focus
Growth ahead
Online
The caring retailer?
Green and ethical
…or big and bad?
The Competition Commission Preliminary Report
BROADER MARKET ENVIRONMENT
Population trends
Growing, greying population
Figure 3: UK: Population trends, 2002-12
Figure 4: UK: Population trends, by age band, 2002-12
Figure 5: UK: Population, by age band, 2002, 2007 and 2012
Living alone
Figure 6: UK: Percentage change of household size, 2002-12
Population implications for the grocery market
The consumer
Increasingly affluent
Figure 7: UK population, by socio-economic group, 2002 and 2012
PDI continues to rise
Figure 8: PDI and consumer expenditure, at current and constant 2002 prices, 2002-12
Bank of England determined to curb rising inflationary pressures
Figure 9: PDI and consumer spend growth rates, at current and constant prices, 2002-07 and 2007-12
Consumer implications for the grocery market
THE MARKET IN CONTEXT
Key findings
Food is still core
Food holds up quite well
Figure 10: UK: Consumer spending on selected major goods categories, 2002-06
Food and drink market versus food retailers and all retail sales
Figure 11: UK: Index of consumer spending growth in food, drink and tobacco, all retail sales and food retailers’ sales, 2002-06
Food and drink
Food holds up surprisingly well
Non-alcoholic drinks power ahead
Price increases see value sales leap in 2007 first half
Figure 12: UK: Food and drinks spending 2002-07
Figure 13: UK: Food and drinks spending, indexed growth, 2002-07
Figure 14: UK: Food and drinks spending shares, 2006
Pets, cleaning, and health & beauty
Non-edible groceries outstrip all retail sales
Personal care steams ahead in 2007
Figure 15: UK: Spending on pet, cleaning and health & beauty products, 2002-07
Figure 16: UK: Spending on pet, cleaning and health & beauty products, indexed growth, 2002-07
Eating out
Figure 17: UK: Spending on food and eating out, 2002-07
Figure 18: UK: Spending on food and drink relative to spending on eating out, 2002-07
STRENGTHS AND WEAKNESSES IN THE MARKET
Strengths
Weaknesses
WHO’S INNOVATING?
Pairing up
Online challenge
Own-brand
Healthy developments
Green steps
SECTOR SIZE AND FORECAST
Key findings
The future
Economic outlook
Inflation and interest rates
Consumer outlook
Retail sales
Food retailers forecasts
Figure 19: UK: Food retailers sales, 2002-12
Figure 20: UK: Food retailers as % of all retail sales, 2002-12
The past
Food retailers gain retail market share
Figure 21: UK: Food retailers’ sales, 2002-07
Figure 22: UK: Relative sales performance of food generalists and specialists, 2002-07
WHERE THEY SHOP FOR GROCERIES
Key findings
The big four
The rest
 MAIN GROCERY SHOPPING
The short term
Figure 23: Store used for main grocery shop, August 2007
The longer term
Tesco losing primary shoppers?
Figure 24: Leading food retailers’ share of main shoppers, 1998-2007
The family shop
Figure 25: Share of main shoppers for leading supermarkets, by family lifestage, August 2007
Shopper profiles
Figure 26: Profiles of supermarkets primary shoppers, August 2007
The big four
The others
Figure 27: Leading grocers’ consumer profiles, by age group, August 2007
Figure 28: Leading grocers’ consumer profiles, by socio-economic group, August 2007
The twelve year shift
Figure 29: Supermarket customer profiles 12-year shift
 OTHER GROCERY SHOPPING
Figure 30: Other stores used for grocery shopping, August 2007
Tescoland
Figure 31: Usage of leading food retailers for other grocery shopping, 1998-2007
Main grocery vs. other grocery
Figure 32: Main grocery shopping and exclusively other grocery shopping, August 2007
WHERE THEY SHOP FOR GROCERIES – DETAILED CONSUMER DEMOGRAPHICS
Figure 33: Store used for main grocery shopping, by gender, age, socio-economic group, lifestage, presence of children, Mintel’s Special Groups, working status, region, ACORN categories, media usage, commercial TV viewing and supermarket used, August 2007
Figure 34: Other stores used for grocery shopping, by gender, age, socio-economic group, lifestage, presence of children, Mintel’s Special Groups, working status, region, ACORN categories, media usage, commercial TV viewing and supermarket used, August 2007
Figure 35: Other stores used for grocery shopping, by gender, age, socio-economic group, lifestage, presence of children, Mintel’s Special Groups, working status, region, ACORN categories, media usage, commercial TV viewing and supermarket used, August 2007
Figure 36: Other stores used for grocery shopping, by gender, age, socio-economic group, lifestage, presence of children, Mintel’s Special Groups, working status, region, ACORN categories, media usage, commercial TV viewing and supermarket used, August 2007
Figure 37: Profile of top four stores used for main grocery shopping, by gender, age and socio-economic group, August 2007
Figure 38: Stores used for any grocery shopping, by gender, age and socio-economic group, August 2007
Figure 39: Stores used for any grocery shopping, by gender, age and socio-economic group, August 2007
SHOPPING FOR GROCERIES ON THE INTERNET
Key findings
Shopping for groceries online
Figure 40: Grocery shopping and the Internet, August 2007
Any Internet grocery shopping
Would consider trying in the future
Would never consider using it
Figure 41: Grocery shopping on the Internet, by gender, age, socio-economic group and supermarkets used, August 2007
SHOPPING FOR GROCERIES ON THE INTERNET – DETAILED CONSUMER DEMOGRAPHICS
Figure 42: Grocery shopping on the Internet, by lifestage, presence of children, Mintel’s Special Groups, working status, region, ACORN categories, media usage and commercial TV viewing, August 2007
FACTORS INFLUENCING CHOICE FOR GROCERY SHOPPING
Key findings:
Figure 43: Factors influencing choice of store for grocery shopping, August 2007
Location, quality, availability
What’s changed since 2006?
Figure 44: Factors influencing choice of store for grocery shopping, change in response, August 2006 to August 2007
Price
Quality
Choice
What matters to whom?
Age
Figure 45: Top three factors influencing choice of store for grocery shopping, by age, August 2007
Supermarket used
Figure 46: Important/unimportant factors, by supermarket used, August 2006
Convenience and service
Figure 47: Factors influencing choice of store for grocery shopping, by gender, age, socio-economic group, and supermarket used, August 2007
Quality and choice
Figure 48: Factors influencing choice of store for grocery shopping, by gender, age, socio-economic group, and supermarket used, August 2007
Price or conscience?
Figure 49: Factors influencing choice of store for grocery shopping, by gender, age, socio-economic group and supermarket used, August 2007
FACTORS INFLUENCING CHOICE FOR GROCERY SHOPPING – DETAILED CONSUMER DEMOGRAPHICS
Figure 50: Factors influencing choice of store for grocery shopping, by gender, age, socio-economic group, lifestage, presence of children, Mintel’s Special Groups, working status, region, ACORN categories, media usage and commercial TV viewing, August 2007
Figure 51: Factors influencing choice of store for grocery shopping, by gender, age, socio-economic group, lifestage, presence of children, Mintel’s Special Groups, working status, region, ACORN categories, media usage and commercial TV viewing, August 2007
Figure 52: Factors influencing choice of store for grocery shopping, by gender, age, socio-economic group, lifestage, presence of children, Mintel’s Special Groups, working status, region, ACORN categories, media usage and commercial TV viewing, August 2007
ATTITUDES TOWARDS GROCERY SHOPPING
Key findings
 CONSUMER ATTITUDES
Food packaging tops the list of concerns
Just how local are we?
Food labels – stop or go
Fair Trade wins over organics
Figure 53: Attitudes towards grocery shopping, August 2007
Food labelling
Figure 54: Attitudes towards grocery shopping – food labelling issues, by socio-economic group, August 2007
Figure 55: Attitudes towards grocery shopping – food packaging and labelling, by gender, age, socio-economic group and supermarket used, August 2007
Recycling and packaging
Figure 56: Attitudes towards grocery shopping – i would like to see food packaging reduced, by age, August 2007
Figure 57: Attitudes towards grocery shopping – recycling and packaging, by gender, age, socio-economic group and supermarket used, August 2007
Local sourcing
Figure 58: Attitudes towards grocery shopping – local sourcing issues, by socio-economic group, August 2007
Figure 59: Attitudes towards grocery shopping – local sourcing, by gender, age, socio-economic group and supermarket used, August 2007
Price and provenance
Figure 60: Attitudes towards grocery shopping – price and provenance, by socio-economic group, August 2007
Figure 61: Attitudes towards grocery shopping – price and provenance, by gender, age, socio-economic group and supermarket used, August 2007
Consumer attitudes by main store used
Figure 62: Attitudes towards grocery shopping, by source of main grocery shopping, August 2007
 IDENTIFYING TARGETS
Figure 63: Consumer typologies for grocery shoppers, summary, August 2007
Apathetic (50% of respondents)
Fair Traders (15% of respondents)
Ethical All-Rounders (15% of respondents)
Eco-Shoppers (20% of respondents)
Figure 64: Consumer typologies, by gender, age, and socio-economic group, August 2007
Where the consumer types shop
Tesco is the destination store in the UK
Figure 65: Consumer typologies, by supermarkets used, august 2007
ATTITUDES TOWARDS GROCERY SHOPPING – DETAILED CONSUMER DEMOGRAPHICS
Figure 66: Attitudes towards grocery shopping – food packaging and labelling, by lifestage, presence of children, Mintel’s Special Groups, working status, region, ACORN categories, media usage and commercial TV viewing, August 2007
Figure 67: Attitudes towards grocery shopping – local sourcing, organic and Fair Trade products, by lifestage, presence of children, Mintel’s Special Groups, working status, region, ACORN categories, media usage and commercial TV viewing, August 2007
Figure 68: Consumer types by lifestage, presence of children, Mintel’s Special Groups, working status, region, ACORN categories, commercial TV viewing and newspaper readership, August 2007
BRAND ELEMENTS
 BRAND MAP
Figure 69: Attitudes towards and usage of food retailer brands, September 2007
 TESCO
Brand background
What the brand is trying to achieve
What the consumer thinks
Figure 70: Attitudes towards the Tesco brand, September 2007
 WAITROSE
Brand background
What the brand is trying to achieve
What the consumer thinks
Figure 71: Attitudes towards the Waitrose brand, September 2007
 ALDI
Brand background
What the brand is trying to achieve
What the consumer thinks
Figure 72: Attitudes towards the Aldi brand, September 2007
 LIDL
Brand background
What the brand is trying to achieve
What the consumer thinks
Figure 73: Attitudes towards the Lidl brand, September 2007
 SAINSBURY’S
Brand background
What the brand is trying to achieve
What the consumer thinks
Performance indicators:
Figure 74: Attitudes towards the Sainsbury’s brand, September 2007
 CO-OP
Brand background
What the brand is trying to achieve
What the consumer thinks
Figure 75: Attitudes towards the Co-op brand, September 2007
 ICELAND
Brand background
What the brand is trying to achieve
What the consumer thinks
Figure 76: Attitudes towards the Iceland brand, September 2007
 MORRISONS
Brand background
What the brand is trying to achieve
What the consumer thinks
Figure 77: Attitudes towards the Morrisons brand, September 2007
 ASDA
Brand background
What the brand is trying to achieve
What the consumer thinks
Figure 78: Attitudes towards the Asda brand, September 2007
 MARKS & SPENCER
Brand background
What the brand is trying to achieve
What the consumer thinks
Figure 79: Attitudes towards the Marks & Spencer brand, September 2007
 BRAND QUALITIES OF FOOD RETAILER BRANDS
Tesco is most accessible and Waitrose least so
Figure 80: Consumer usage of various food retailer brands, September 2007
 EXPERIENCE OF FOOD RETAILER BRANDS
Tesco is most popular
Figure 81: Consumer usage of various food retailer brands, September 2007
 BRAND CONSIDERATION FOR FOOD RETAILING BRANDS
Iceland shows highest consideration
Figure 82: Consideration of various food retailer brands, September 2007
 BRAND SATISFACTION FOR FOOD RETAILER BRANDS
M&S shows most excellent satisfaction
Figure 83: Satisfaction of various food retailer brands, September 2007
 BRAND COMMITMENT TO FOOD RETAILER BRANDS
M&S and Waitrose generate most affection
Figure 84: Commitment to various food retailer brands, September 2007
 ROUND UP
RETAIL COMPETITOR ANALYSIS
Key findings
Share of the market
Technicalities
Marks & Spencer
Fuel and other income
Mintel adjustments
Market leaders
C-stores
High street/secondary supermarket
Figure 85: UK: Leading food and drink retailers, 2006/07
Outlets by type
Figure 86: UK: Leading food and drink retailers, outlet numbers, by location, 2006/07
Evaluation
Figure 87: Food retailers, evaluation, 2007
Market shares
Figure 88: UK food retailers top 20 market shares, 2006/07
ALDI (EUROPE)
Figure 89: Aldi (Europe): Sales as share of all food retailers' sales in Europe, 2002-06
Strategic evaluation
Background
Financial performance
Figure 90: Aldi (Europe): Estimated group financial performance, 2002-06
Store portfolio
Figure 91: Aldi (Europe): Outlet data, 2002-06
Retail offering
Market positioning
Brands
Product offer
Pricing
Operational issues
Advertising and marketing
e-commerce and home shopping
ASDA STORES LTD
Figure 92: Asda Stores Ltd: Sales as share of all food retailers in UK, 2002-06
Strategic evaluation
Background
Financial performance
Figure 93: Asda Stores Ltd: Group financial performance, 2003-07
Store portfolio
Figure 94: Asda Stores Ltd: Outlet data, 2003-07
Retail offering
Market positioning
Brands
Product offer
Pricing
Operational issues
Advertising and marketing
Figure 95: Asda Stores Ltd: Main media advertising spend, 2002-06
Figure 96: Asda Stores Ltd: Media advertising spend by usage, 2006
e-commerce and home shopping
CO-OPERATIVE GROUP
Figure 97: Co-operative Group (Food): Sales as share of all food retailers’ sales in UK, 2002-06
Strategic evaluation
Background
Financial performance
Figure 98: Co-operative Group: Group financial performance, 2002/03-2006/07
Store portfolio
Figure 99: Co-operative Group: Outlet data, 2002/03-2006 /07
Retail offering
Market positioning
Brands
Figure 100: Co-operative Group: Own brands, summer 2007
Product offer
Operational issues
Advertising and marketing
e-commerce and home shopping
ICELAND FOODS LTD
Figure 101: Iceland Foods Ltd: Sales as share of all food retailers in UK, 2002-06
Strategic evaluation
Background
Financial performance
Figure 102: Iceland Foods Ltd: Group financial performance, 2003-07
Store portfolio
Figure 103: Iceland Foods Ltd: Outlet data, 2003-07
Retail offering
Market positioning
Brands
Product offer
Pricing
Operational issues
Advertising and marketing
e-commerce and home shopping
MARKS & SPENCER (FOOD)
Figure 104: Marks & Spencer (food): Sales as share of all food retailers in UK, 2002-06
Strategic evaluation
Background
Financial performance
Figure 105: Marks & Spencer (food): Group financial performance, 2003-07
Store portfolio
Figure 106: Marks & Spencer (food): Outlet data, 2003-07
Retail offering
Market positioning
Brands
Product offer
Pricing
Operational issues
Advertising and marketing
e-commerce and home shopping
WM MORRISON SUPERMARKETS
Figure 107: Wm Morrison Supermarkets: Sales as share of all food retailers' sales in UK, 2002/03-2006/07
Strategic evaluation
Background
Financial performance
Figure 108: Wm Morrison Supermarkets: Group financial performance, 2002/03-2006/07
2007 interims show growth continuing
Store portfolio
Figure 109: Wm Morrison Supermarkets: Outlet data, 2002/03-2006/07
Figure 110: Wm Morrison Supermarkets: Store portfolio by size, 2003 and 2007
Retail offering
Market positioning
Brands
Product offer
Pricing
Operational issues
Advertising and marketing
e-commerce and home shopping
MUSGRAVE
Figure 111: Musgrave: Sales as share of all food retailers in UK, 2002-06
Strategic evaluation
Background
Financial performance
Figure 112: Musgrave: Group financial performance, 2002-06
Figure 113: Musgrave: Selected retail sales, 2002-06
Store portfolio
Figure 114: Musgrave: Retail outlet data, 2002-06
Retail offering
Market positioning
Brands and pricing
Product offer
Operational issues
Advertising and marketing
e-commerce and home shopping
J SAINSBURY
Figure 115: Sainsbury’s Supermarkets: Sales as share of all food retailers in UK, 2002-06
Strategic evaluation
Background
Financial performance
Group
Figure 116: J Sainsbury: Group financial performance, 2002/03-2006/07
Figure 117: Sainsbury’s Supermarkets, 2002/03-2006/07
Figure 118: Sainsbury’s Supermarkets: Sales growth, 2002/03-2006/07
Store portfolio
Figure 119: Sainsbury’s Supermarkets: Outlet data, 2002/03-2006/07
Figure 120: Sainsbury’s Supermarkets: Outlets by size, 2002/03-2006/07
Retail offering
Market positioning
Brands
Figure 121: Sainsbury’s Supermarkets: Own-label food portfolio
Product offer
Pricing
Operational issues
Advertising and marketing
e-commerce and home shopping
SCHWARZ GROUP
Figure 122: Schwarz Group: Estimated sales as share of all food retailers’ sales in Europe, 2002-06
Figure 123: Schwarz Group: Estimated sales as share of all food retailers’ sales in Germany, 2002-06
Figure 124: Schwarz Group: Estimated sales as share of all food retailers’ sales in France, 2002-06
Strategic evaluation
Background
Financial performance
Figure 125: Schwarz Group: Share of group sales of German operations, by fascia, 2002/03-2006/07
Figure 126: Schwarz Group: Estimated share of group international sales by market, 2006/07
Figure 127: Schwarz Group: Estimated group sales, 2002/03-2006/07
Store portfolio
Figure 128: Schwarz Group: Store portfolio, Germany vs international, 2002/03-2006/07
Figure 129: Schwarz Group: Outlet data, 2002/03-2006/07
Retail offering
Market positioning
Brands
Product offer
Pricing
Operational issues
Advertising and marketing
e-commerce and home shopping
SOMERFIELD
Figure 130: Somerfield: Sales as share of all food retailers in UK, 2002-06
Strategic evaluation
Background
Financial performance
Figure 131: Somerfield Stores Ltd, UK retail sales and operating profit, 2003-07
Store portfolio
Figure 132: Somerfield: Outlet data, 2003-07
Retail offering
Market positioning
Brands
Product offer
Pricing
Operational issues
Advertising and marketing
e-commerce and home shopping
SPAR INTERNATIONAL
Figure 133: SPAR (Europe): Sales as share of all European food retailers’ sales, 2002-06
Strategic evaluation
Background
Figure 134: SPAR International: Year of entry by country
Financial performance
Figure 135: SPAR International: Retail sales by country, 2002-06
Figure 136: SPAR International: Estimated European sales exclusive of sales tax, 2006
Store portfolio
Figure 137: SPAR International: Outlet data, 2002-06
Figure 138: SPAR International: Sales per m² by country (Europe), 2006
European operations
Discontinued operations
Continuing European operations
Figure 139: SPAR (Austria): Sales as share of Austrian food retailers’ sales, 2002-06
Figure 140: SPAR (Belgium): Sales as share of all Belgian food retailers’ sales, 2002-06
Figure 141: SPAR (Czech Republic): Sales as share of all Czech food retailers’ sales, 2002-06
Figure 142: SPAR (Denmark): Sales as share of all Danish food retailers’ sales, 2002-06
Figure 143: SPAR (France): Sales as share of all French food retailers’ sales, 2002-06
Figure 144: SPAR (Greece): Sales as share of all Greek food retailers’ sales, 2002-06
Figure 145: SPAR (Hungary): Sales as share of all Hungarian food retailers’ sales, 2002-06
Figure 146: SPAR (Ireland): Sales as share of all Irish food retailers’ sales, 2002-06
Figure 147: SPAR (Italy): Sales as share of all Italian food retailers’ sales, 2002-06
Figure 148: SPAR (Netherlands): Sales as share of all Dutch food retailers’ sales, 2002-06
Figure 149: SPAR (Norway): Sales as share of all Norwegian food retailers’ sales, 2002-06
Figure 150: SPAR (Spain): Sales as share of all Spanish food retailers’ sales, 2002-06
Figure 151: SPAR (Switzerland): Sales as share of all Swiss food retailers’ sales, 2002-06
Figure 152: SPAR (UK): Sales as share of all UK food retailers’ sales, 2002-06
Non-European activities
Figure 153: SPAR International: Non-European sales and outlets by country, 2001 and 2006
Retail offering
Market positioning
Product offer
Own-brand goods
Pricing
Operational issues
Advertising and marketing
E-commerce and home shopping
TESCO
Figure 154: Tesco (Europe): Sales as share of all food retailers in Europe, 2002-06
Strategic evaluation
Background
Financial performance
Figure 155: Tesco Plc: Group financial performance, 2002/03-2006/07
Figure 156: Tesco (UK): Sales as share of all food retailers in UK, 2002-06
Figure 157: Tesco (Czech Rep): Sales as share of all food retailers in Czech Republic, 2002-06
Figure 158: Tesco (Hungary): Sales as share of all food retailers in Hungary, 2002-06
Figure 159: Tesco (Ireland): Sales as share of all food retailers in Ireland, 2002-06
Figure 160: Tesco (Poland): Sales as share of all food retailers in Poland, 2002-06
Figure 161: Tesco (Slovak Rep): Sales as share of all food retailers in Slovak Republic, 2002-06
e-commerce
Store portfolio
Figure 162: Tesco Plc: Outlet data, 2002/03-2006/07
Figure 163: Tesco: UK store formats, 2007
Figure 164: Tesco: European store formats, 2007
Figure 165: Tesco: Asian store formats, 2007
Development
Retail offering
Figure 166: Tesco UK: Sales by product, 2006/07
Market positioning
Brands
Pricing
Operational issues
Advertising and marketing
Figure 167: Tesco: Main media advertising expenditure, 2002-06
e-commerce and home shopping
WAITROSE LTD
Figure 168: Waitrose Ltd: Sales as share of all food retailers in UK, 2002-06
Strategic evaluation
Background
Financial performance
Figure 169: Waitrose Ltd: Group financial performance, 2003-07
Store portfolio
Figure 170: Waitrose Ltd: Outlet data, 2003-07
Retail offering
Market positioning
Brands
Product offer
Pricing
Operational issues
Advertising and marketing
e-commerce and home shopping
RETAIL ADVERTISING AND PROMOTION
Key findings
Trends in total spending on advertising
Figure 171: Main media advertising expenditure by leading supermarkets, 2002-06
Figure 172: UK: Main media advertising, by leading supermarket and grocery chains, by media usage, 2006

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