Some 63% of grocery shoppers say the price of food and drink products has become more important to them in the past year, while a third (33%) have cut back on grocery budgets. This is leading to a record volume decline within the grocery sector, and the most competitive market that we have seen since the great recession of 2008-9.
Customers are already altering their behaviour to save money during the cost-of-living crisis, with 34% stocking up on products when they were discounted, 33% switching to cheaper brands and 18% shopping for groceries less frequently. These are all areas that should benefit the supermarket sector, where core trade is less frequent ‘big-basket’ shops and private label and promotions are strongest.
However, the largest threat to the major grocery multiples is of course switching behaviour to the discount retailers Aldi and Lidl. A record 26% of consumers say they now spend the most with discounters in a typical month, with both Aldi and Lidl seeing record numbers of shoppers and Aldi now the joint second most popular grocer to shop with in the UK alongside Sainsbury’s, with both behind Tesco.
This shift to discounters is natural, but equally grocery multiples are far better prepared to fight back against discounters than in the last recession. 44% of Tesco shoppers and 40% of Sainsbury’s shoppers say that these retailers’ respective Aldi Price matches have stopped them switching, while investment and renewed focus on loyalty schemes is also keeping customers from switching.
Key issues covered in this Report
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Market size for all grocery retail sales and the supermarket sector
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How consumers shop for groceries and how frequently
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Types of retail stores used and distribution of spending in the sector by channel
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Retailers used for primary and secondary shopping, along with market sizes
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Loyalty/reward scheme membership and the impact it has on purchasing
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Priority and behaviour shifts when choosing where to shop as result of the cost-of-living crisis
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Attitudes to fuel, promotions and food waste in the grocery sector
Products covered in this Report
The main focus of this Report is the supermarkets of the market leaders – those stores in which people have historically done their main shop. Combining market, company and our consumer research data, we analyse why the shift away from supermarkets has occurred, what the state of play is in 2022 and where the sector is heading next.
The term ‘supermarket’ takes in a very broad selection of store sizes. Tesco, for example, has stores ranging from 10,000 sq ft, small high-street supermarkets to over 100,000 sq ft hypermarkets, with an average supermarket size of around 39,000 sq ft. Broadly speaking, the unifier between these stores is the ability to serve, first and foremost, a shopper’s main shop, or primary grocery needs. As size increases, the range of non-foods and other services accommodated also increases, with the trade-off being that the largest stores are usually located outside of urban areas and often need a dedicated trip to visit.
Discounters are excluded from our definition of supermarkets as, while often similar in size to the supermarkets of the leading players, in reality they fall between the supermarket and convenience sectors. While touched upon in this Report, they are covered in more detail in Mintel’s Food and Non-food Discounters – UK, 2022 Report.
