Author: Mintel Group Ltd.
Last saved by: HTTP server

Food Retailing - UK - November 2010

ISSUES IN THE MARKET
Definitions
Abbreviations
FUTURE OPPORTUNITIES
Trend: Affection
Trend: Diversity Is All
MARKET IN BRIEF
The market
Figure 1: Food retailers’ sales forecast confidence range, 2011-15
“Retail is detail”
Tesco dominant
Formats
Self scanning – immediately popular
BOGOFs much more popular than EDLP
Macro economic outlook poor
Online growing, but Morrisons standing aloof
Spending on food has gained share of spending through the recession
Building on the brand
A concentrated sector
INTERNAL MARKET ENVIRONMENT
Key points
Competitive environment
What do consumers want?
Store formats
Primary shopping destinations
Car ownership
Secondary shopping destination
Hard discounters and Iceland
Online
Who shops online?
Figure 2: Internet users who buy food online, 2003-10
Figure 3: Profile of online food shoppers, Dec 2006, Sept 2010
Figure 4: UK: Internet access, 2001-10
Social needs
Major players
Market size
Figure 5: UK: Food retailers’ Online sales, 2009 and 2010
Figure 6: Online sales as % all food retailers’ sales, 2006-10 (e)
BROADER MARKET ENVIRONMENT
Key points
The ageing population is bad news.
Figure 7: UK: Over 65s as % total UK population, 1991-2020
Implications for retailers
The economy
Figure 8: UK: Quarterly GDP growth, 1989-2010 (Q2)
Can the recovery continue?
Implications for food retailers
COMPETITIVE CONTEXT
Key points
Food retailers – Key markets
Figure 9: UK: Consumer spending on selected major goods categories, 2005-10 (H1)
Food – the basis for the success of the food retailers
Figure 10: Spending on food and drink as % all consumer spending, 2004-10 (H1)
Inflation
Figure 11: Food inflation, 2004-10 (Sept)
Product mix
Figure 12: UK: Food retailers, estimated product mix, 2009
Eating out
Figure 13: Spending on food relative to spending on eating out, 2004-09
WHO’S INNOVATING
Asda – chosen by you
Home delivery – the drive through supermarket
Green issues – traceability
Tesco produces grocery shopping app for the iphone
Vending machines – an idea that won’t go away
Taking Local to the limit
Tesco and Clubcard
STRENGTHS AND WEAKNESSES
Strengths – Driving growth
Weaknesses – reducing growth
SECTOR SIZE AND FORECAST
Key points
Uncertainty
Implications for the food retailers
How will they respond?
Forecast
Figure 14: Food retailers’ sales, 2005-15
Figure 15: Food retailers’ sales forecast confidence range, 2011-15
Figure 16: Food retailers’ sales forecast, best and worst case data, 2005-15
CHANNELS OF DISTRIBUTION
Figure 17: Food, drink and tobacco – estimated channels of distribution, 2009
RETAILER COMPETITIVE ANALYSIS
Key points
Leading retailers
The Market leaders
Hard discounters and Iceland
Convenience stores
Figure 18: UK: Leading Food Retailers, 2009/10
Market shares
Figure 19: Leading UK food retailers, estimated non-retail share of sales, 2009
Figure 20: Leading UK food retailers’ market shares, 2009
RETAIL ADVERTISING AND PROMOTION
Key points
Figure 21: Food Retailers advertising spend, 2006-10
Figure 22: Advertising expenditure by retailers, Sep 2009-Aug 2010
BRAND ELEMENTS
Key points
 BRAND MAP
Figure 23: Attitudes towards and visitation of various food retail stores, August 2010
 BRAND QUALITIES OF FOOD RETAIL STORES
Tesco leads in key attributes
Figure 24: Personalities of various food retail stores, August 2010
 EXPERIENCE OF FOOD RETAIL STORES
Big four most visited
Figure 25: Consumer visitation of various food retail stores
 BRAND CONSIDERATION FOR FOOD RETAIL STORES
M&S least considered
Figure 26: Consideration of various food retail stores, August 2010
 BRAND SATISFACTION FOR FOOD RETAIL STORES
Premium brands most excellent
Figure 27: Satisfaction with various food retail stores, August 2010
 BRAND COMMITMENT TO FOOD RETAIL STORES
Tesco dominates in grocery sector
Figure 28: Commitment to various food retail stores, August 2010
 BRAND INTENTIONS FOR FOOD RETAIL STORES
Tesco takes the lead, budget brands lack loyalty
Figure 29: Future visiting intentions for various food retail stores, August 2010
 BRAND RECOMMENDATION FOR FOOD RETAIL STORES
Big names, low prices support big four
Figure 30: Recommendation of various food retail stores, August 2010
 ‘BUDGET BRANDS’ – ICELAND, ALDI, LIDL
What the consumer thinks
Figure 31: Attitudes towards the Aldi, Lidl and Iceland stores, August 2010
 MORRISONS AND ASDA
What the consumer thinks
Figure 32: Attitudes towards the Morrisons and ASDA stores, August 2010
 PREMIUM AND ADDED-VALUE – M&S, WAITROSE, THE CO-OPERATIVE
What the consumer thinks
Figure 33: Attitudes towards the Marks & Spencer, Waitrose and The Co-operative stores, August 2010
 THE TOP TWO – SAINSBURY’S AND TESCO
What the consumer thinks
Figure 34: Attitudes towards the Sainsbury’s and Tesco stores, August 2010
WHAT DO CONSUMERS LOOK FOR IN A SUPERMARKET?
Key points
 CONSUMERS AND THE RECESSION
Bargain hunting
Figure 35: Bargain hunters, 2008-10
Figure 36: Hard discounters, 2008-10
 WHAT CONSUMERS LOOK FOR IN A SUPERMARKET
Mintel survey, May 2010
Figure 37: Factors considered for choice of a particular supermarket for main weekly shopping, May 2010
Figure 38: Key factors in choosing a supermarket by age and affluence, May 2010
TGI survey, 2005-09
Figure 39: Deciding factors in shopping for food, drink and household products, GB, 2005-09
A more sophisticated approach
Figure 40: Key factors in choosing a supermarket, September 2010
Who rates what?
Best value
Figure 41: Ranking of best value, September 2010
Lowest prices
Figure 42: Ranking of lowest prices, September 2010
Product quality
Figure 43: Ranking of product quality, September 2010
Convenience and range
‘Retail is detail’
Loyalty cards
WHERE DO CONSUMERS SHOP BY TYPE OF OUTLET?
Key points
Figure 44: Shops used regularly/occasionally, GB, 2008-09
 WHO SHOPS WHERE?
Figure 45: Usage of supermarkets for main shop, September 2010
Figure 46: Primary shopping destinations, customer profile, September 2010
Secondary shopping destinations
Figure 47: Secondary shopping destinations, September 2010
Figure 48: UK food retailers: Profile of secondary shopping customers, September 2010
Customer loyalty – how many shops are used?
Figure 49: Numbers of outlets used for top-up shopping, September 2010
CONSUMER ATTITUDES TOWARDS SELF-SCANNING
Key points
Figure 50: Use of traditional staffed checkouts and self scan checkouts, September 2010
Figure 51: Profile of Self-scanning users and non-users, September 2010
Figure 52: Places used for main grocery shopping, by use of traditional staffed checkouts and self scan checkouts, September 2010
 ATTITUDES TO SELF-SCANNING
Figure 53: Attitudes towards self-scanning terminals, September 2010
Attitudes to self-scanning by retailer used
Figure 54: Attitudes towards self-scanning terminals, by places used for main grocery shopping, September 2010
PRICE PROMOTIONS
 KEY POINTS
Figure 55: Preference for price promotions, September, 2010
Demographic analysis
ALDI STORES LTD (UK)
Figure 56: Aldi (Europe): Sales as share of all food retailers' sales in Europe, 2005-09
Figure 57: Aldi: Sales as share of all food retailers' sales in various European countries, 2005-09
Strategic evaluation
Figure 58: Aldi: Stores per million capita in selected European countries, 2009
Recent history
Sales performance
Figure 59: Aldi: Group sales performance, 2005-09
Store portfolio
Figure 60: Aldi: Outlet data, 2005-09
Retail offering
e-commerce and home shopping
ASDA GROUP
Figure 61: Asda Group Ltd: Sales as share of all food retailers’ sales in UK, 2005-09
Strategic evaluation
New formats
Margins vs prices
Prospects
Recent history
Financial performance
Figure 62: Asda Group Ltd: Group financial performance, 2005-09
Store portfolio
Smaller stores
Figure 63: Asda Group Ltd: Outlet data, 2005-09
Retail offering
Promotions
Own brands
e-commerce and home shopping
CO-OPERATIVE GROUP (FOOD)
Figure 64: Co-operative Group (Food): Sales as share of all food retailers’/grocers’ sales in the UK, 2005-09
Strategic evaluation
Recent history
Financial performance
Figure 65: The Co-operative Group (Food): Like-for-like sales growth, 2005-09
Figure 66: Co-operative Group (Food): Group financial performance, 2005/06-2009/10
Somerfield
Figure 67: Somerfield: Group financial performance, 2004/05-2008/09
Co-op: Interim report 2010
Store portfolio
Figure 68: Co-operative Group (Food): Outlet data, 2005/06-2009/10
Retail offering
e-commerce and home shopping
ICELAND FOODS
Figure 69: Iceland Foods Ltd: Sales as share of all food retailers’ sales in the UK, 2005-09
Recent history
Financial performance
Figure 70: Iceland Foods Ltd: Group financial performance, 2005/06-2009/10
Store portfolio
Figure 71: Iceland Foods Ltd: Outlet data, 2005/06-2009/10
Retail offering
e-commerce and home shopping
J SAINSBURY
Figure 72: J Sainsbury: Sales as share of all food and fuel retailers in UK, 2005-09
Strategic evaluation
Recent history
Financial performance
Figure 73: Sainsbury’s Supermarkets, 2005/06-2009/10
Figure 74: Sainsbury’s Supermarkets: Sales trends, 2005/06-2009/10
Store portfolio
Figure 75: Sainsbury’s Supermarkets: Outlet data, 2005/06-2009/10
Figure 76: Sainsbury’s Supermarkets: Outlets by size, 2005/06-2009/10
Retail offering
Figure 77: Sainsbury’s Supermarkets: Own brand portfolio, 2010
e-commerce and home shopping
MARKS & SPENCER (FOOD)
Figure 78: M&S Food: Sales as share of all food retailers’ sales in the UK, 2005-09
Recent history
Financial performance
Figure 79: M&S Food: Financial performance, 2005/06-2009/10
First half 2010/11
Store portfolio
Figure 80: M&S Food: Outlet data, 2005/06-2009/10
Retail offering
e-commerce and home shopping
SCHWARZ GROUP (UK)
Figure 81: Schwarz Group: Sales as share of all food retailers in UK, 2005-09
Strategic evaluation
Limitations at home
But further opportunities abroad
Losing shoppers in the UK
Smaller format
Short term turbulence but longer term staying power
Recent history
Financial performance
Figure 82: Schwarz Group: Estimated Group sales performance, 2066-10
Store portfolio
Figure 83: Schwarz Group: Estimated outlet numbers, 2006-10
Retail offering
e-commerce
SPAR INTERNATIONAL
Figure 84: SPAR (Europe): Sales as share of all European food retailers’ sales, 2005-09
Figure 85: SPAR (UK): Sales as share of all UK food retailers’ sales, 2005-09
Strategic evaluation
History
Figure 86: SPAR International: Year of entry, by country
Financial performance
Figure 87: SPAR International: Retail sales, by country, 2005-09
Figure 88: SPAR International: Estimated European sales exclusive of sales tax, 2009
Store portfolio
Figure 89: SPAR International: Outlet data, 2005-09
Figure 90: SPAR International: Sales per m², by country (Europe), 2009
Figure 91: SPAR International: Store formats, 2009
Retail offering
e-commerce and home shopping
TESCO
Figure 92: Tesco (UK): Sales as share of all food retailers’/grocers’ sales in the UK, 2005/06-09/10
Strategic evaluation
The price/quality balance
A leader in online
Ongoing cultivation of the international business
Figure 93: Tesco sales densities: GB£ store sales per m2, 2005/06-2009/10
Figure 94: Tesco: Geographic origin of turnover, 2005/06 and 2009/10
Global expansion timeline
Financial performance
Group record
Figure 95: Tesco: Financial performance, 2005/06-2009/10
UK sales breakdown
Figure 96: Tesco UK: Sales by product category, 2008/09 and 2009/10
Non-UK performance
UK retailing services
2010/11 interim results
Store portfolio
Figure 97: Tesco: Outlet data, 2005/06-2009/10
Figure 98: Tesco: UK store formats, 2009/10
Retail offering
e-commerce and home shopping
WAITROSE
Figure 99: Waitrose Ltd: Sales as share of all food retailers’ sales in the UK, 2005-09
Recent history
Financial performance
Figure 100: Waitrose Ltd: Group financial performance, 2005/06-2009/10
Store portfolio
Figure 101: Waitrose Ltd: Outlet data, 2005/06-2009/10
Retail offering
e-commerce and home shopping
WM MORRISON GROUP
Figure 102: Wm Morrison Group: Sales as share of all food retail & fuel sales in the UK, 2005-09
Strategic evaluation
Recent history
Financial performance
Figure 103: Wm Morrison Group: Group financial performance, 2005/06-2009/10
Figure 104: Sales densities for Morrisons, Tesco UK, J. Sainsbury and Asda, 2008/09 and 2009/10
Sales trends
Figure 105: Wm Morrison Group: Sales performance, 2005/06-2009/10
First-half results 2010/11
Store portfolio
Figure 106: Wm Morrison Group: Outlet data, 2005/06-2009/10
Figure 107: Wm Morrison Supermarkets: Store portfolio, by size, 2006-10
Retail offering
e-commerce and home shopping
APPENDIX – BROADER MARKET ENVIRONMENT
Population
Figure 108: Europe Top 5: Population breakdown, by age group, 2005
Figure 109: Europe Top 5: Population breakdown, by age group, 2010
Figure 110: Europe Top 5: Population breakdown, by age group, 2015
Figure 111: Europe Top 5: Population breakdown, by age group, 2020
 GDP
Figure 112: Europe Top 5: GDP (in current prices) 2000-Q2 2010
Figure 113: Europe top 5: GDP growth rates (in constant prices), 2000-Q2 2010
Consumer spending
Figure 114: Europe top 5: Consumer spending (in current prices), 2001-09
Figure 115: Europe Top 5: Consumer spending growth rates (in constant prices), 2001-09
Consumer prices
Figure 116: Europe Top 5: Consumer prices, 2001-Q3 2010
Food consumer prices
Figure 117: Europe Top 5: Consumer prices for food, 2001-October 2010
Unemployment
Figure 118: Europe Top 5: Average rate of unemployment, 2001-Q2 2010
Interest rates
Figure 119: UK and Eurozone: Interest rates, 2004-Q1 2010
Consumer confidence
Figure 120: Europe top 5: Consumer confidence, January 2009-June 2010
APPENDIX – WHAT DO CONSUMERS LOOK FOR IN A SUPERMARKET?
Figure 121: Most popular factors considered for choice of a particular super market for main weekly shopping, by demographics, May 2010
Figure 122: Next most popular factors considered for choice of a particular super market for main weekly shopping, by demographics, May 2010
APPENDIX – WHERE CONSUMERS SHOP BY TYPE OF OUTLET?
Figure 123: Shops used regularly/occasionally, by demographics, GB, 2009
Figure 124: Shops used regularly/occasionally, by demographics, GB, 2009
APPENDIX – WHERE CONSUMERS SHOP BY RETAILER?
Figure 125: Where people do their primary shop, detailed demographics, September 2010
Figure 126: Places used for main grocery shopping, by places used for top-up grocery shopping, September 2010
Figure 127: Places used for top-up grocery shopping, by places used for main grocery shopping, Sep 2010
Places used for top up shopping – detailed demographics
Figure 128: Places used for top-up grocery shopping, by demographics, September 2010
Figure 129: Places used for top-up grocery shopping, by demographics, September 2010 (continued)
APPENDIX – ATTITUDES TOWARDS SELF-SCANNING
Figure 130: Use of traditional staffed checkouts and self scan checkouts, by demographics, September 2010
Figure 131: Attitudes to self-scanning terminals, detailed demographics, September 2010
Figure 132: Attitudes to self-scanning terminals, detailed demographics, September 2010 (continued)
Figure 133: Attitudes to self-scanning terminals, detailed demographics, September 2010 (continued)
Figure 134: Attitudes to self-scanning terminals, detailed demographics, September 2010 (continued)
Figure 135: Attitudes towards self-scanning terminals, by places used for main grocery shopping, Sep 2010

This report is supplied in accordance with Mintel's terms and conditions.  
© Mintel Group Ltd.